2017 state of e-commerce in distribution · marketing automation. mobile apps. social media....

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2017 State of E-Commercein Distribution

Featuring:Jonathan Bein, Real Results Marketing

Karie Daudt, Insite SoftwareJenel Stelton-Holtmeier, Modern Distribution Management

March 23, 2017

Sponsored by:

© 2017 Gale Media, Inc. All Rights Reserved. 1



About

For more than 12 years, we have focused our energy on addressing the complexities of B2B manufacturers and distributors. We understand that B2B is complex, and encompasses a many to many relationship between people, products and channels. Our goal is to help unify core business systems, and drive better user experiences. Our solutions solve challenges across the organization, and deliver results.

Companies everywhere are transforming their businesses with Insite.

www.insitesoft.com


•Results from the 2017 State of E-Commerce in Distribution survey

•Critical e-commerce issues for distributors•Q&A

Agenda



Jonathan BeinManaging Director,Real Results Marketing

Karie DaudtSenior Director of Marketing & Customer Experience,Insite Software

Speakers

Jenel Stelton-HoltmeierEditor,Modern Distribution Management



2017 E-Commerce Survey

© 2017 Gale Media, Inc. All Rights Reserved.


6

45%

53%

59%56%

52% 50%

44%

20%17%

20% 20%16%

19% 21%

13% 12%

7%11%

14% 16% 15%10%

7% 6% 4%7% 7% 7%

4% 5%2% 3% 4%

2%5%

8%6% 5% 7% 8%

6%7%

0%

10%

20%

30%

40%

50%

60%

2011 2012 2013 2014 2015 2016 2017F

E-Commerce Percent of Total Revenue

Less than 5% 5% to 10% 10% to 20% 20% to 30% 30% to 40% More than 40%



Distributor E-Commerce Performance

7

66%

11%

23%

0% 10% 20% 30% 40% 50% 60% 70%

Under performing

Moderate performing

High performing

High = Moved to 10% - 20% e-commerce revenue within 5 years or that have > 20% e-commerce revenue

Moderate = Stuck in the 10% - 20% for more than 5 years

Under = In nascent (<5%) category for more than 3 years or in the 5% - 10% category for more than 5 years



Differences with Distributors & Manufacturers• Manufacturers lead distributors in e-commerce journey

– 17% drop in <10% category from 2015 to 2016– 15% gain in the 10%-30% category in same period, plus– 3% increase in >40% category

• Distributors shift to more mature stages but at a slower pace– 7% drop in nascent stage w/ 7% corresponding gain in 5%-20%

category

• Distributors face disruptive quandary: Get on board quickly or manufacturers may go around them

8© 2017 Gale Media, Inc. All Rights Reserved.


How Manufacturers Use E-Commerce

9

38%

25%

12% 8% 6%0%5%

10%15%20%25%30%35%40%

All throughdistribution

Mostly throughdistribution,

some direct toend-user

Roughly evenlydivided betweendistribution anddirect to end-

user

Mostly direct toend-user, some

throughdistribution

All direct to end-user



10

14%

8%

9%

7%

8%

10%

24%

21%

0% 5% 10% 15% 20% 25%

Expected 2017

2016

2015

2014

2013

2012

2007-2011

Before 2007

Year First Received E-commerce Revenue

65% of companies in the 10% -20% e-commerce range started

2011 or before



11

3%

10%

18%

12%

8%

11%

17%

21%

2%

7%

9%

9%

12%

18%

21%

22%

0% 5% 10% 15% 20% 25%

Increase transaction size

Improve productivity

To promote our brand

Increase efficiency & cost savings

Increase product content available

Increase frequency of use and transactions

Improve customer experience

Increase new customers and orders

Top E-Commerce Priorities

2017 2016

Move to transactional priorities

Customer experience & product content supports

transactions



12

3%3%3%3%3%

5%8%

10%12%

14%37%

5%4%3%23%4%

15%5%

22%11%9%

14%

2%3%

3%6%

4%3%

4%6%

12%5%

14%14%

12%10%

3%3%

6%9%

8%4%

5%8%

8%2%

8%16%

8%7%

4%3%

4%9%

6%5%

3%9%

10%5%

8%12%

6%6%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Mass marketingWebinars

VideosPrint catalog

Direct mailMarketing automation

Mobile appsSocial media

Customer service repPay-per-click

Inside sales repEmail marketing

SEO/organic searchField sales rep

Most effective Second Third Fourth Fifth

SEO moved to #2 position, up from #4

in 2016Marketing Automation is underutilized

Effectiveness of Marketing Vehicles to Drive Demand to E-Commerce Channel



13

3%4%

6%6%6%

12%15%

21%22%

27%

5%5%

6%9%8%

13%14%

21%10%

4%15%

6%8%

5%5%

10%9%

12%16%

10%

5%14%

9%5%

4%4%

10%8%

8%10%

8%

4%17%

5%6%

4%7%

8%5%

7%8%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80%

WebinarsSocial media

VideosMobile apps

Marketing automationMass marketing

Direct mailPay-per-click

SEO/organic searchEmail marketing

Print catalog

Spending rank among the following marketing vehicles for driving demand

with your e-commerce channel

Biggest spend Second Third Fourth Fifth



Millennials are Coming Here

14

As of 2015: Millennials > Boomers Millennials > GenX

By 2020:Millennials >> Boomers Millennials + GenZ >> GenX



How Millennials Shop and Buy

• Very frequent shopping methods– 50% by search– A third at distributor website– 27% with distributor sales rep

• Very frequent buying methods– 52% by email– 41% by web or mobile– 22% by CSR

15© 2017 Gale Media, Inc. All Rights Reserved.


Very relational customer base• Similar emphasis on search, distributor website, CSR and distributor sales rep• Purchasing is done with people over the phone, in person, in store• Significantly decreased emphasis on email and e-commerce


Very transactional customer base• Huge emphasis on electronic shopping – search, distributor site• Huge emphasis on electronic buying – email, website• Aversion to in-person interactions with rep or in store


Shopping Preferences by Customer Base

18

0% 10% 20% 30% 40% 50% 60%

Search engine

Manufacturer's website

Distributor website

Customer service rep

Distributor's sales rep



Buying Preferences by Customer Base

19

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Email

By website with computer

Over the phone supplier rep



Distributor, 60%

Manufacturer, 28%

Other, 12%

Who Took The Survey?

20

Type of Company Customer Base

Company Annual Revenues

532 Respondents

11%

13%

22%

22%

32%

0% 5% 10% 15% 20% 25% 30% 35%

Mostly or exclusively OEM

Other

Mostly trades/contractors

Mostly or exclusively MRO

Roughly even balance betweenMRO and OEM



21

Sectors Represented Company Annual Revenues

11%

25%

15%

24%

6%

11%

0% 5% 10% 15% 20% 25% 30%

Less than $10 million

$10 million to $50 million



$500 million to $1 billion

More than $1 billion

6%8%9%

14%14%14%16%17%18%19%19%19%

22%30%

33%63%

0% 10% 20% 30% 40% 50% 60% 70%

Grocery/Foodservice

Pharmaceutical

Pulp and Paper

Chemicals and Plastics

Electronics

Other

Plumbing

JanSan

Power Transmission/Bearing

Building Materials/Construction

Hardware

Oil and Gas Products

HVACR

Electrical

Safety

Industrial



Critical Issues



Critical Issue #1:

Amazon(and other new players)



Critical Issue #2:

Changing Roleof Sales Team



Critical Issue #3:

Customer Experience in an Omnichannel World




Source: McKinsey & Company “Putting customer experience at the heart of next-generation operating models”


Questions?

March 23, 2017

Sponsored by:

2017 State of E-Commercein Distribution


2017 state of e-commerce in distribution · marketing automation. mobile apps. social media....

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