“This is particularly important since many buyers do not visit suppliers’ physical stores, but rely on catalogs and websites to research products. Unfortunately, many of supplier’s websites are outdated and lack capabilities to meet customer expectations.
from the July 23rd, 2013 My Purchasing Center article “First Amazon, Now Google. Will Other Internet Companies Follow?” by Jack Keough
I very much enjoyed reading Jack Keough’s recent article on the continuing emergence of the online B2B and B2C marketplace and in particular his reference to “the perceived weakness of industrial companies in their ecommerce applications.” This according to Keough has opened the door to third-party retail giants such as Google or Amazon, which the article suggests poses a significant threat to industrial suppliers in terms of revenue and maintaining ongoing customer loyalty.
While there were many interesting points in the article that in and of themselves raise numerous questions, including why the apparent weakness in terms of industrial supplier websites exists in the first place, it was his comments regarding Grainger about which I took particular note.
Back in 2001 I read a book by Dale Neef titled “E-procurement: From Strategy to Implementation.”
Over the years I had made several references to it in my blog as I believed that Neef had effectively offered what was at the time an unparalleled view of where the procurement and in particular the e-procurement world was headed. If you haven’t yet read his book you should, as Neef’s insights are both timeless and telling in terms of their relevance today.
One example of the timelessness to which I am referring is what Neef had to say about Grainger.
In an excerpt from his book Neef would write the following;
“In business since 1927, W.W. Grainger, Inc. has a number of Web properties, but Grainger.com is the granddaddy of them all (in terms of sales as well as time on the Net). In 1999, Grainger had $4.5 billion in sales, with more than $100 million over the Web, the majority of which was placed through Grainger.com.
More than 560,000 brand name maintenance, repair, and operating (MRO) supplies are offered at Grainger.com, with a growing number of Grainger’s 1.5 million customers actively ordering online. The Web site continues the same kind of customer service and wide range of industrial products provided in the traditional business, with the additional convenience of 24/7 ordering.
This convenience is what first hooked Isaac Pendarvis, assistant buyer for BFGoodrich Aerospace in Pueblo, Colorado. As Pendarvis says, “I’d known about Grainger since I was a kid, so one day I was on the Internet and tried out their site and was hooked. It’s one of the most convenient and easy sites to use.”
Within this context, you can understand why unlike the majority of other industrial suppliers, Grainger is not worried about the pending encroachment of Google and Amazon into their market space.
That being said, why was Grainger able to recognize and respond to the opportunities afforded industrial suppliers through the Web so long ago when so many others failed to do so?
In Part 2 I will delve into this question in greater detail, as well as provide insight into what today’s suppliers must do in response to Google and Amazon to maintain both revenues and customer loyalty.