There’s an old saying, “Don’t put all your eggs in one basket.” It’s a good saying that has withstood the test of time. It relates to so many facets of our lives — eggs, nest eggs, friends, customers and selling channels.
Over the past couple years, and certainly in this column, there has been much focus on electronic commerce systems. It would be easy to start sipping the proverbial Kool-Aid, thinking that modern, leading-edge wholesalers can build a good webstore and ignore all other selling channels they have traditionally used in hawking their products. Putting all their eggs in that single shopping basket is quite tempting, just like the sirens in Homer’s Odyssey. (Management ideas and classical literature, we are your one-stop shop.)
Creating a good webstore is a complicated process. It’s not as messy as managing a top-notch salesforce, maintaining brick-and-mortar locations with fast, efficient product delivery, establishing customer relationships and building effective marketing programs that attract and retain profitable customers. As we have said before, our industry is well past the tipping point: All wholesalers need a high-quality webstore containing high-quality product content. However, we continue to stress that a webstore will only be one of your “selling” baskets for years to come.
Unless you are one of those new Internet-only wholesalers, we will bet that only a fraction of your customers are currently using your website regularly. As we work with traditional wholesalers, the slice is growing, but very few conventional wholesalers in our industry are selling more than 15 percent of their sales volume through their webstore. We know of a couple who are in the 25-percent range, but those are HVAC distributors whose dealers are buying big-ticket residential and light-commercial equipment online, which have a significant impact on the percentage.
Print Marketing Benefits
• Internet business is great but don’t forget the other 75 percent to 85 percent of your revenue. It would be a grave mistake for a wholesaler to put all their eggs into the Internet basket. While most wholesalers understand the need to field an outside sales force and convenient locations, many are surprised that catalogs are still a relevant, efficient selling tool in our industry.
Those of you who read our April column are aware that one of our foundation products is catalogs produced from the same content database as our webstore product. Catalogs and print-format selling tools are very cost-effective when they can be produced as a side effect of webstore content maintenance.
• Print-format marketing materials are not dead. Many hugely successful companies in our industry invest big money in not only validating the impact of catalogs but producing them and, in some cases, printing and mailing them. We know for a fact they are hoping you will focus an extreme amount of your energies on your webstore.
Your focus on a single basket gives them a shot at your core customers. They know trade customers are multifaceted but are hoping you will get disproportionately focused on a single channel. There will be less competition for them as they serve the non-web customers who represent the most substantial opportunity at this time.
• Customers forget you have a lot of products in stock. Jen had a gift registry at Pottery Barn years ago, yet continues to receive catalogs from them regularly. Every time she gets a new one, it comes with her to the kitchen table and she flips through it once before tossing it in the paper recycle bin. You might think this is an indicator of a wasted expense for Pottery Barn. On the contrary, it made an impression.
Without even thinking, Jen picked up on the current trends, what Pottery Barn is selling and the breadth of their product. It happened in a way that hasn’t been replicated online. No matter how many emails we receive touting the same products, only snapshots (similar to looking at the offering through a toilet paper roll) of their extensive offering are seen.
• Remind them you are in business. Rich gets a variety of catalogs ranging from Harbor Freight (tools), Crutchfield (sound systems), Lands’ End (clothing) to Williams-Sonoma (home goods) to ProVantage (computer equipment and supplies). While Rich’s catalogs end up in a different room (not the kitchen), they are consistently reviewed and recycled. They often shape upcoming shopping trips or online inquiries. These are purchasing events that might not have happened otherwise.
We understand that we are not your target customers and our buying habits may not represent those of your trade customers, so let’s focus on a successful wholesaler who is working to sell 50 percent of its products online but fully understands the need to distribute their eggs across other selling baskets. WW Grainger continues to produce its massive product encyclopedia that is traditionally on the bookshelf of most buyers and purchasing agents in all the markets they serve.
For those of you who keep track, Grainger’s traditional catalog (the 2019 version is labeled volume 410) has shrunk somewhat over the past couple years. It’s down from more than 4,000 pages to just over 3,100 pages. This count, however, does not include the 22 specialty catalogs it has produced thus far in 2019.
From the beginning of its existence, Grainger has relentlessly worked to communicate its product offering to customers so customers can conveniently locate and buy those products. Without a catalog, there would be no reasonable way a customer could understand the breadth of Grainger’s offering. The distributor’s additional focus on niche specialty catalogs gives it an edge in any of those niche markets.
We know, you don’t sell to the same customers Grainger does. We know your customers are much smarter than Grainger’s customers. We know your sales team has done a better job of communicating the breadth of your offering to those smart customers. We know your customers know, from memory, all the product lines you stock and sell.
We know your customers block out all the marketplace noise created by your competition and buy all products exclusively from you. So your customers would probably not benefit from printed materials. Remember, we’re only talking about the 75 percent to 85 percent nonwebstore part of your customer base who are buying as they have for decades.
Just in case one of the above statements is not 100-percent accurate, we encourage you to think about how you are communicating with your customers. This will come as no surprise but your customers are probably spending a portion of their day in the field where they are likely using mobile phones, tablets and catalogs. Some of them have purchasing staff who use a PC, or they use one when they get done with their jobs. Do you have solutions for all these portals into their lives?
• HVAC equipment matchup books make is easy to buy systems from you. Twenty-five years ago, techs could slap together a system from the ragtag parts and pieces on their truck, and it would produce warm air or cold air, ideally in the winter or summer, respectively. Those days are long gone. System configuration has become a complicated, frustrating task for techs as they try to comply with rules and sort out the ever-changing product offering from manufacturers.
We remember a time when product updates were made every year. Everyone geared up for the change and got them to the field as quickly as possible and then went back to business as usual until the next year. Fast-forward to today’s environment. Changes seem to be a fluid thing these days. Whether it’s the new finishes that are in style this month or the latest government energy initiative, the changes keep coming.
Especially where government standards come into play, your customers/dealers are looking to their wholesaler-distributor partners for the information they need. Some leading wholesalers are digesting the information and providing simple system selection guides with pricing that allow techs to easily offer their customers with options. Since wholesalers only configure systems that are readily deliverable from stock, contractors can confidently sell the systems from these materials.
• Net-price books help the customer to bid your products. Price changes seem to happen all the time and your customers want to be apprised of them all. Their success is fundamentally tied to profitably bidding, winning and completing jobs. Current, accurate product costs allow your customers to produce competitive and profitable job quotes to their customers. Providing net-priced books is a great way to get customers their current pricing. Since discounts very so broadly, providing list prices varies from useless to dangerous.
Some of your more sophisticated customers may want their pricing in digital form so they can efficiently import it into their accounting system. (For electronic importing, we’re talking about a comma-separated value file, or CSV, or an Excel spreadsheet, not a PDF.) The best wholesalers are making this information available to contractors 24/7 on their websites.
• Preseason catalogs and promotions kick off the contractor’s season, buying from you. When done right, a good preseason promotional book can be used to set price impressions before the demand hits so that, although the pricing may be expired, you are the low-price supplier they think of. Does your webstore support preseason promotions with special discounts for orders exceeding a specific threshold?
• Niche books make customers feel special while making it easy to buy from you. Making it easy for your customers to purchase from you is critical. When you create catalogs focused on specific niches, you make buyers in those niches feel special and you make it easier for them to buy from you. Some obvious niches are hotel/motel, hospital, apartment maintenance, waterworks, municipal, tools, etc. In each area, the catalog is the distillation of your total offering into a handy ordering reference.
• Punchouts are required by many large customers. These need to be on your radar. They are the way large institutional customers are making their purchases. Amazon is purported to be working on a punchout solution with its eye on making itself the preferred or maybe the only option. Also, offering niche catalogs for the MRO market provides the information these customers need without making them browse through the rest of your product offering.
So, as you plan your marketing activities and marketing budgets, make sure you are building out your website and webstore for that growing basket. But don’t forget to plan and fund the other baskets to support the majority of your customer business.
Whether you choose to publish your books in house or hire a company like us to do the work, we believe the future will include print or print-format marketing materials in the form of PDFs available for download from your website. Unlike traditional print catalogs, the online catalogs can be generated in real time to show the customer’s negotiated price instead of a list or trade price.