Download handouts (PDF) : www.mdm.com/slides or info@mdm.com 2014 STATE OF E-COMMERCE IN DISTRIBUTION Featuring: Jonathan Bein, Ranga Bodla and Tom Gale March 20, 2014 Produced by: Event Sponsor: 1
Download handouts (PDF) : www.mdm.com/slides or info@mdm.com Speakers: Jonathan Bein Senior Partner Real Results Marketing Ranga Bodla Director of Industry Marketing Netsuite Tom Gale Publisher Modern Distribution Management Event Sponsor:
Download handouts (PDF) : www.mdm.com/slides or info@mdm.com Agenda: • Introduction – Tom Gale (10 Minutes) • Presentation – Jonathan Bein (30 Minutes) • Presentation – Ranga Bodla (10 Minutes) • Q&A – Everyone (10 Minutes) Event Sponsor:
The State of Distribution E-Commerce 2014 5
Summary • Real Results Marketing conducted an electronic survey of 465 participants to better understand trends in e-commerce. • This survey was conducted with Modern Distribution Management in February 2014. • Key trends: – E-commerce revenue as a percent of overall revenue is rising rapidly – Key objectives are acquiring new customers, growing wallet share with existing customers, and improving website usability – Grainger is overwhelmingly considered the best website by other distributors – Respondents express mixed satisfaction with much of the functionality on their own e-commerce sites – Mobile technology for e-commerce is being deployed rapidly. – Catalogs are considered to be highly effective for generating e- commerce revenue. 6
Best Competitor Website • Overwhelmingly, Grainger is named by competitors as having the best website. • McMaster-Carr was a distant second. • Nobody else was even close.
Best Competitor Website • Overwhelmingly, Grainger is named by competitors as having the best website. • McMaster-Carr was a distant second. • Nobody else was even close. .....Grainger just added several hundred people to its e-commerce initiative
Overview • Revenue and growth • Priorities • Capabilities • Marketing • Data • Operations 9
REVENUE AND GROWTH 10
E-Commerce Revenue – 2012-2014 • 2013 - Increase of nascent and growth stage companies • 2014 (projected) • More than 20% increase in growth stage companies • More than double number of mature companies Definition • Nascent – less than 5% e-commerce revenue • Growth – 5% to 10% e-commerce revenue • Mature – 10% or more e-commerce revenue 11
E-Commerce Revenue – 2013-2014 • A significant number expect to increase their e- commerce revenue • Only a small percentage expects their e- commerce revenue to decline in 2014. 12
PRIORITIES 13
Top Priority Top priorities are • New customers • Existing customers • Ease of use Priorities reflect the nascent and growth stage e-commerce in where the first priority is to get revenue flowing with a usable web site. 14
E-commerce Leadership Among respondents with nascent stage e-commerce programs, only half have dedicated leadership vs. 70% who in growth or mature stage. 15
CAPABILITIES 16
E-Commerce Capabilities Respondents are only satisfied with the table-stakes functionality (contact information and basic search.) For only slightly more complex functionality (stock levels, technical information, social media), there is mixed satisfaction. For advanced capabilities (quote, live chat, and purchase suggestions), satisfaction is low. 17
E-Commerce Capabilities Respondents have high satisfaction with login and order placement. They have mixed satisfaction will all of the other capabilities. 18
Mobile Capabilities Support for mobile technology has grown nearly 25% from last year including: • Smart phones • .mobi implementations • Mobile apps Still, more than 30% intend to implement support for mobile technologies in the next year and beyond. 19
Integration Capabilities Smaller distributors are less likely to rely on EDI or punch-out as part of their e-commerce solution. The emphasis on EDI and punch- out has diminished from last year. 20
MARKETING 21
Driving E-Commerce Demand • Email marketing, catalog and SEO are most effective and highest spend • Paid search has low effectiveness • Marketing automation is underutilized in distribution relative to other industries 22
E-commerce and Catalog Synergy • 85 percent of companies with a successful catalog believe that e- commerce and catalog are synergistic or that their catalog helps drive e-commerce sales. • 73 percent of companies who have a mature e-commerce channel believe that e-commerce and catalog are synergistic or that their catalog helps drive e-commerce sales. • The three distributors (Grainger, MSC Industrial Supply and McMaster-Carr) who were considered by their peers in a previous survey survey to have the best websites were also considered by their peers to have the best catalogs. 23
E-commerce and Catalog Synergy • Product information management • Brand • Sales 24
Simple Techniques for Driving E-commerce Demand with Catalog • Reference other product options available online - e.g. “See our website for 100s more options” 25
Simple Techniques for Driving E-commerce Demand with Catalog • Reference other product options available online - e.g. “See our website for 100s more options” • Place e-commerce URL on all catalog pages 26
Simple Techniques for Driving E-commerce Demand with Catalog • Reference other product options available online - e.g. “See our website for 100s more options” • Place e-commerce URL on all catalog pages • Mention online tools – Order tracking – Shipping charges 27
Simple Techniques for Driving E-commerce Demand with Catalog • Reference other product options available online - e.g. “See our website for 100s more options” • Place e-commerce URL on all catalog pages • Mention online tools – Order tracking – Shipping charges • Selectively reference videos, training, configuration/sizing tools 28
Simple Techniques for Driving E-commerce Demand with Catalog • Reference other product options available online - e.g. “See our website for 100s more options” • Place e-commerce URL on all catalog pages • Mention online tools – Order tracking – Shipping charges • Selectively reference videos, training, configuration/sizing tools • Promote mobile options, e.g. “On the road? – use our convenient mobile ordering” 29
Marketing Automation and Email Marketing Many distributors use email marketing to promote products, special and branch events. There is limited awareness among distributors about marketing automation and how it differs from email marketing. 30
Marketing Automation Example No response? Wait Clicks 3 Link Days Send Newsletter Newsletter Invite Email Opens Email Send Exclusive Send Whitepaper Webinar Invite Message Invite to Private Demo
Email Service Provider vs. Marketing Automation
Marketing Automation ROI • Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads. In turn, nurtured leads make 47% larger purchases than non-nurtured leads. (The Annuitas Group, Nov 2012) 33
Marketing Automation ROI • Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads. In turn, nurtured leads make 47% larger purchases than non-nurtured leads. (The Annuitas Group, Nov 2012) • 79% of top-performing companies have been using marketing automation for more than two years, with 79% of CMOs indicating “increasing revenue” as the most compelling reason for adoption, followed by “higher quality leads” at 76%. ( Gleanster, Aug 2013) 34
Marketing Automation ROI • Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads. In turn, nurtured leads make 47% larger purchases than non-nurtured leads. (The Annuitas Group, Nov 2012) • 79% of top-performing companies have been using marketing automation for more than two years, with 79% of CMOs indicating “increasing revenue” as the most compelling reason for adoption, followed by “higher quality leads” at 76%. ( Gleanster, Aug 2013) • 78% of successful marketers cite marketing automation as being most responsible for improving revenue contribution. (The Lenskold and Pedowitz Groups, Nov 2013) 35
Marketing Automation ROI • Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads. In turn, nurtured leads make 47% larger purchases than non-nurtured leads. (The Annuitas Group, Nov 2012) • 79% of top-performing companies have been using marketing automation for more than two years, with 79% of CMOs indicating “increasing revenue” as the most compelling reason for adoption, followed by “higher quality leads” at 76%. ( Gleanster, Aug 2013) • 78% of successful marketers cite marketing automation as being most responsible for improving revenue contribution. (The Lenskold and Pedowitz Groups, Nov 2013) • Companies that deploy marketing automation see (Aberdeen Group, June 2012) – 107% better lead conversion rates – 40% greater average deal sizes – 20% higher team attainment of quota – 17% better forecast accuracy 36
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