This month the HARDI Research Foundation sponsored a research survey to our distributor and manufacturer members to help us quantify where the HARDI membership is along the broad spectrum of digital content and e-commerce capabilities. The brief survey holds the promise of being perhaps one of the most powerful and important expenditures in the Foundation’s history (and I think you all know how strongly I believe in the Demand Creation “Myths & Misperceptions” project and book completed in 2014).
The onset of Amazon Supply (now Amazon Business) and the meteoric rise in online sales by MRO giants like Grainger and HD Supply sent shockwaves throughout wholesale distribution channels and sent distributors, buying groups and cooperatives into frenzied pursuit of e-commerce strategies and solutions. Years later, however, the HVACR channel has relatively little to show for its e-commerce efforts. I will submit that most have been chasing the wrong rabbit, incorrectly identifying what holds true proprietary value, and driving a growing wedge between distributors and the manufacturers who most want to support two-step distribution. This month’s research survey is the first and most important step toward resetting our channel on a better course and saving everyone millions of dollars and thousands of customers.
Hyperbole you may say but take a second to count how many meetings you’ve been in over the last five years in which some form of e-commerce, Amazon, etc. was discussed as at least a massive threat or potential opportunity. Next, think about how much progress your company has made in those five years defending business from virtual competitors and/or creating a profitable e-commerce business. I’m willing to bet the percentage of the members who would say “yes” to both is less than 5 percent of our membership, all while dollars are flying out the door to consultants and various software solutions.
Further, consider how your suppliers have generally responded when you’ve discussed digital content and/or e-commerce. Currently these topics are primarily cost drivers for a supplier rather than a recognized value of selling through wholesale distributors. The single greatest cause for these poor returns on investment is, in my opinion, the failure to clearly distinguish between “digital strategies” and “e-commerce.” These terms are far from interchangeable and confusing the two has costly ramifications.
After more than a year researching this general topic I am convinced every HARDI distributor — except for perhaps the most specialized, niched company with extremely unique customers — must have a “digital strategy.” I am also convinced that very few of those same member companies’ “digital strategies” need to have any “e-commerce” aspect to them. The distinction between “digital strategies” and “e-commerce” will have to be a blog post all to its own in the future but with this survey out and live at this very moment, I want to stay focused on the moment. Our channel needs to do three things immediately if it is going to be ready for the way business is headed:
1. Take a breath- Do not misinterpret my words to suggest there are no valuable consultants or software solutions in this space because that’s simply not true. Most distributors, however, just don’t have true, long-term “digital strategies” and, therefore, are unable to select the best partners or solutions.
2. Figure out where we are right now- Almost all distributors have websites but that doesn’t mean they can all claim to have a “digital strategy”, “e-commerce”, or useful online product information. Until we know specifically where our distributors are on the spectrum of digital sophistication, we’re all just flying blind and talking at one another in different languages.
3. Agree on some basic definitions- This research will help us define the specific levels of sophistication and needs of our members in a digital world, and the corresponding levels of capabilities and opportunities each level of sophistication can provide to a distributor and their strategic suppliers.
Contact me directly if you do not recall receiving this survey or if you want it resent to you. It’s that important. The only thing more important is that when you complete it, you do so as honestly as possible. If your company is at ground zero in terms of digital content and commerce, say so. That’s what we need to know. If your company is highly sophisticated but failing to recognize the ROI you’re expecting, say so. We’re not looking for a one-size-fits-all solution, but rather how to help distributors of all sophistications compete better and more profitably.
Now get into your Inbox, find the survey invitation, and complete it.