As online buying has grown dramatically in the consumer sector, led by websites like Amazon, so it is becoming increasingly recognised as a powerful commercial tool in the business-to-business arena, argues Dale Gardiner.
Online purchasing has grown at a blistering pace over the last 10 years as more people recognise its convenience, speed of response and ease of use. The Centre for Retail Research (CRR) describes e-commerce as “the fastest growing retail market in Europe”. It estimates that the UK’s online share was 16.8% in 2016 and forecasts it to be 17.8% in 2017; in 2010 it was just 9.4%.
The CRR adds: “Online sales in Western Europe and Poland grew from £174.76 billion in 2015 to £201.90bn in 2016 (+15.6%). In 2017, we expect total e-commerce online sales to increase to £230.62bn, a rise of 14.2%. Further growth of 13.8% in 2018 should mean that online sales reach £262.46bn.”
More than 90% of adults in the UK are internet users, creating huge potential for e-commerce. General merchandising websites like Amazon, clothing outlets such as ASOS, and retailers including Tesco have fuelled the interest in online purchasing in the consumer sector.
And, as people have become more familiar and relaxed with this type of shopping, they have begun to feel more comfortable embracing it for business procurement too.
Until relatively recently, when people bought solely from distribution centres, purchasing was linear: site – office – supplier. However, online purchasing unshackles the supply chain by reversing this ‘bricks rather than clicks’ business model. Buying online allows more of a ‘pyramid’ model with site, office and supplier in constant communication.
The design of the virtual store is one of the most important factors in the success or failure of online businesses. Buying and selling goods and services online will become a source of frustration and anger if the website that hosts it is poorly put together. That’s why it’s important for the online store to be responsive and work seamlessly across all devices and any location, be intuitive and easy to use and include contact details.
It should also allow the user to refine a search by filtering by product category, brand and dimensions, provide automated email confirmation once an order has been and processed, and provide online order tracking.
Our own website, for example, offers a number of features aimed at making customers’ lives easier (see the box below). It includes help and advice with looking for the right product and creating component lists for tender and offering online proof of delivery.
By registering with the site, our customers gain an online account offering the latest pricing with offers tailored specifically to them based on their order history. They can save orders as a list, or tag items as favourites to revisit later. Online account management also gives customers access to reports, order history and invoices in one place.
The account area allows team structures and permissions to be set up so that a site worker can raise a requisition with product details, quantities and images for approval by a central buyer. There is also a ‘live chat’ window.
So what of the future of online trading? New technologies will inevitably influence the process. Building Information Modelling (BIM), for example, is a process involving the generation and management of digital representations of physical and functional characteristics of places.
BIM is likely to play an increasing role in the procurement process because it can help to improve project management by allowing contractors and consultants to order goods more quickly and accurately, with fewer worries about over-ordering or returns.
With its close association to BIM, augmented reality (AR) is also likely to have a big impact in how customers buy products online in future. AR is a technology that superimposes a computer-generated image on a user’s view of the real world, thus providing a composite view.
It offers access to product visualisation – the ability to see virtual products in the customer’s actual environment. This can be useful when designing a project to ensure everything fits and is sited in the optimum position.
And, as the web-based technology matures further, expect on and offline sales to start to come together to create multi-channel (or ‘omni-channel’) purchasing. This uses a central stock pool to control a number of elements including pricing, fulfilment, sales, stock management and ordering. These orders are fulfilled from different channels such as concessions, franchises, catalogue, web, stores and mobile.
As more building services contractors and consultants get to grips with omni-channel procurement (from browsing to selecting, purchasing and picking up), we believe that successful trading will increasingly rely on the ability of the supplier to bridge the offline and online worlds with original and functional solutions.
However, whether by bricks or clicks (offline or online purchasing), customers have always called the shots and will continue to do so. It is all too easy for them to take their business elsewhere if they are dissatisfied with the service they are getting. That makes the customer – and his or her mouse – always right.
Online buying facts and figures
In a bid to boost its customer service, Brymec has compiled a set of data which reveals just how far building services businesses have come in terms of online purchasing. The research shows that, in 2013, 21% of our customers were online. By 2014, this had grown to 26%. In 2015 it stood at 30%, in 2016 34% and this year (so far) 37% of our customers buy online.
Brymec sells a wide range of components for the building services sector. The most popular items both last year and so far this have been plumbing and refrigeration copper tube followed by end feed fittings and channel. However, our customers buy everything from refrigerant gases to motorised valves and duct fans to access handling equipment.
The research shows that online purchasing is here to stay. Indeed, it’s set to rocket in acceptance over the coming months and years as more businesses recognise its advantages. For example, our own website, like well-designed sites elsewhere, provides:
- Price competitiveness and openness – you can view tailored pricing and receive bespoke offers.
- Ease of use – images are included with product descriptions to help with quick identification and selection. You can also search orders, invoices and proof of delivery, pay invoices online and set up a purchasing structure, allowing you to delegate authority to team members to raise requisitions and/or place orders.
- Convenience – there are no fixed hours. You are in charge of the buying experience and can spend as much or as little time on it as you deem appropriate. There’s no need to travel to and from an outlet. Merchandise is simple to search and it’s easy to determine whether the products are available or out of stock.
- Accessibility – you can search for products 24/7 and you won’t have to brave inclement weather when ordering goods.
- Variety – an online store can showcase an infinite variety of goods.
- Expediency – you can build favourite lists to save time with repeat orders as well as generate tender quotes.
Source: H&V News (October 2017)