HD Supply, founded in 1974, is the third largest industrial distributor in the U.S. Roughly 60 percent of its sales come from ecommerce.
Your B2B company leadership is skeptical about changing business and sales methods. Your sales team is nervous about making a wrong step when it comes to digital, and questions if it is worth the risk. You realize change is necessary, but don’t know how to shift. Moreover, the expense is significant, and projecting return on investment can be a challenge.
How can you make a case for ecommerce?
Proof of Concept
A proof of concept is a good way to test the digital commerce waters, to learn. Ideally, the project can be completed quickly (less than three months) and has a quick return on investment (less than a year).
Here are some suggestions to get started.
Pick an area of your business where you will likely see the greatest initial returns from ecommerce. If you sell replacement parts, consider starting there. Replacement parts are typically high margin. Selling them online will increase revenue, improve customer service, and decrease your customer-service workload. To simplify, limit what you offer initially.
Research what your competitors are selling online. Search for your products online and see who sells them. What can you learn? What opportunities exist?
Are your products sold on Amazon? Should you sell through Amazon? It likely should be a part of your overall strategy. But be wary of using Amazon as your sole channel and of offering all of your products there.
Pick an ecommerce platform that can scale but has relatively low upfront costs. SaaS platforms — Miva, BigCommerce, Shopify, many others — are good for this.
Steps for Success
Share with your team stories of how businesses with traditional sales channels are re-inventing themselves with ecommerce. Here are two examples.
- Grainger was founded in 1927. It is now the largest distributor of industrial parts and supplies in the United States and the third largest in the world. Its CEO, D.G. Macpherson, expects ecommerce to account for 80 percent of sales by 2022.
- HD Supply, founded in 1974, is the third largest industrial distributor in the U.S. Roughly 60 percent of its sales come from ecommerce.
Remind your team of the risk of doing nothing. Think of the disruption to taxi cabs from Uber. If taxi companies had created a strong online experience or mobile app, it would have been more difficult for Uber to succeed.
You already have strong customer relationships. Develop technology that will keep those relationships as customers transition to digital.
Make sure your sales representatives embrace ecommerce by ensuring they are compensated for ecommerce sales from their accounts. Use the web to make their job easier.
Email is an easy and inexpensive way to invite your customers to use your new ecommerce offering. Consider offering customers an incentive to sign up for your email list — i.e., 10 percent off the first order — and then have a plan and resources around emailing them on an ongoing basis.
List the reasons why the proof of concept will succeed. Envision six months following the launch. It is a great success. What made it a success? What is your team celebrating? Use it to motivate you and your team and to create a vision.
Think, too, about why the project might fail. While this may seem counterintuitive, it can be helpful to imagine your project failing, and why. In the book “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts,” author Annie Duke call this a pre-mortem. It’s an exercise to help make better decisions and avoid failure.
The Downside
A proof of concept project is an opportunity to learn. If it doesn’t meet your expectations, it doesn’t mean that B2B ecommerce can’t work. You may need to approach it differently.
Make sure your team understands that this is an experiment to learn and hopefully make money. The idea is to take a small risk that you can use to fuel growth.
The downside of a proof of concept is that you may be experimenting in a small way while your competitors are investing in a much larger way, leaving your company behind. But if the leadership of your company is skeptical, a proof of concept can be a good first step.