If I’ve learned anything in the last 12 months, it has been that what is successful in other industries can often be successful in ours. Big box stores are implementing technology changes now and taking market share from us faster than we realize. They will continue to eat away at our businesses as they integrate technology that makes our customers’ lives easier, and it’s time for us to respond. This is where e-commerce comes in.
As I’ve worked with multiple ERP suppliers, I’ve narrowed e-commerce functionality for lumber into three levels. With each level comes a heightened layer of complexity, integration, and cost.
Level 1: Customer Portal
Level 2: Pro Contractor Shopping
Level 3: Retail—Anonymous Online Transactions
Level 1: Customer portal
Level 1 is easiest and least expensive and is an option that is available with most current ERP systems. It’s an add-on that allows your customers to log into their account online or via a phone app creating transparency in statements, invoices, orders, and quotes on demand. This normally comes with the added functionality of allowing for customers to pay their statements online via ACH or credit card (if you allow). Customers love to have this information at their fingertips, and it reduces your costs by eliminating calls and emails back and forth.
Level 2: Pro-contractor shopping
Customers with an account can do business on demand without having to contact their sales rep or call into the front desk. They can:
- See pricing on items to build their own quotes (variable pricing can be setup at customer level)
- Order product and schedule delivery Accept quotes or lines on quotes and schedule for delivery
- Receive notifications on the status of their orders
Level 3: Retail-anonymous online transactions
This level is the most expensive and labor intensive; it requires you to set up multiple areas of functionality including a link to a separate website with pictures and descriptions of products, setting up processes for cash customers, and working out other payment collections through the transaction. It’s ultimately worth the investment because you’re more likely to keep business through walk-in traffic, and you’ll gain more market share from competitors that don’t offer something similar. You can even integrate your dispatch GPS systems, so customers get notifications and track delivery trucks. This is truly a difference maker.
E-commerce is probably the biggest differentiator in service and strategy hitting every industry right now. Look at grocery shopping. Before COVID-19, about 14% of consumers shopped at least partially for groceries online and only 6% fully online. Now, 37% of consumers do ALL of their grocery shopping online…including me. Why would I spend valuable time walking the aisles when five minutes online gets delivery to my doorstep? Ask yourself: if you could order lumber, a hammer, or a tape measure on your phone in five minutes, pick it up, skip the line, and be in and out in two minutes, wouldn’t you choose that? What if you could get your deck quoted by turning in a request on your phone, receiving the estimate, ordering it, and having it dropped off in your yard the next day? Even if the number of those consumers who would utilize this option is small, we have to ask ourselves if we are prepared to lose that percentage of business.
Consumers are used to e-commerce servicing and are now seeking it out for everything they buy. In the past, this would have been too hard. Now, ERP systems make it possible. A simple call to your ERP sales rep asking for a demo is all it takes to get started. Take the necessary steps to change your business strategies now, and you’ll build business in the rapidly approaching future with confidence.
Shane Soule consults with LBM and component companies to increase productivity and profits, and improve the experience for both customers and team members. Reach Shane at shane@shanesoule.com
