5 eCommerce Myths Impacting Building Materials: Podcast

In September 2019, Greg from Market Thrive was a guest on the Smarter Building Materials Marketing Podcast with Zach and Beth from Venveo to discuss “5 Myths of eCommerce” that are impacting building materials manufacturers. Below is a summary of that conversation. Listen to the full episode of the Smarter Building Materials Marketing Podcast here.

If you’re a building materials marketer, you should subscribe to Zach and Beth’s podcast. They cover all aspects of the industry and offer great practical advice every week.

Myth #1: Building Materials Aren’t Sold Online

The Department of Commerce says building materials e-commerce is growing 25% year-over-year and made up 9.2% of building product sales in 2017. Building product e-commerce covers everything from plumbing to metalwork, ceiling fans to light fixtures.

As we go out and talk to different manufacturers, we’re definitely seeing some sales and digital marketplace transformation going on.

For consumer-based products or products that target the contractor, we’re seeing some e-commerce pick up in the last few years. And for the manufacturers focused on the commercial space, that’s where you find the most opportunity. B2B e-commerce is three times as big as B2C. So if you sell commercial windows or cladding, for example, sites are starting to come online for that, increasing demand and visibility.

And while B2B e-commerce is still relatively new for building products, if you can leverage it, you may be the only one in your category doing it right now. However, the pace of change is increasing. We only need to look at those products and manufacturers that waited the longest to adopt other e-marketing and e-sales channels to see who has lost out in the past.

Momentum is key. If you can get in early, not only are you going to gain more momentum, but you’re going to learn. You get to digitally transform and evolve while taking advantage of potentially being in a digital marketplace of one or very few manufacturers.

Myth #2: Traditional Distribution Will Walk Away If We Start Selling Online

This myth is the #1 bump in the road, and we get where it's coming from. For manufacturers, their first consideration is their dealers and distributor network, who are their bread and butter. Our focus today on e-commerce isn’t about a desire to diminish that relationship.

What we’ve come to see through sales data is rising tides lifts all boats. Driving demand is good business for everybody. Many dealers are going online now, so even if you aren’t selling online, your distributors are already there or are considering it. And driving demand doesn’t mean all demand will go through e-commerce channels; it means it will also drive new demand to distributors.

For manufacturers who are looking at e-commerce but need a way to combat this perceived channel conflict with distributors and dealers, one approach is to launch a side brand. An e-commerce side brand lets you build a product designed specifically for online shoppers, without necessarily competing directly with your dealers.

If there’s enough different demand, then brand name doesn’t always hold the same weight in the online space as it does in a brick and mortar setting. Online buyers may be more accepting of a less well-known brand with good reviews and good experience in the product listing than they would if they were in a physical store.

This idea of a side brand can also help tackle a common pain point among both manufacturers and dealers: homeowner sales leads. Many times, homeowners aren’t the manufacturer or dealer’s ideal customer, so setting up a homeowner-targeted side brand allows you to sell to that market, without using up sales resources.

Myth #3: If You Put It Online, It Will Sell

We’ve seen this one so often. People put something on the online marketplace assuming it will sell. But a website with a shopping cart isn’t enough. There are strategic levers that have to be pulled to drive growth. Consider how people will find and come to your e-commerce store: Once they’re there, what will the buying, upselling and follow up processes be like?

Manufacturers turning to e-commerce need to be a customer-first organization, which not all manufacturers are used to being. The key is to start at the top with organizational buy-in to a customer-first focus. E-commerce is a commitment and a continuous improvement process. It’s simply not enough to turn on the shopping cart and walk away.

Remember that, as with any online property, visibility doesn’t happen by accident. Visibility is controlled through performance. The visible manufacturers are the ones that are driving a good buying experience. In order to have a successful e-commerce platform, start with a great digital experience and presenting content that makes sense and, once the purchase has been made, delivering on expectations around quality and speed.

Myth #4: E-Commerce Is Just Another Sales Channel

We often hear this from someone who is in a traditional sales role, and their perspective can come from fear or lack of experience or understanding. In fact, e-commerce is almost a completely separate game from in-person sales.

Where we’ve seen success in e-commerce is when it has a top-down buy-in, and the CEO is driving organizational change. These companies break down the silos around their sales structure. Not all sales staff need to be digitally focused, but the company needs to understand the numbers game and how these very different sales processes all fit together.

For any manufacturer who has unsuccessfully tried e-commerce, look back at the attempt and ask yourself the following:

  • What was your strategy?

  • How involved were you?

  • How much organizational buy-in did you have?

  • How was it prioritized?

  • How was the user experience incorporated?

  • How do we re-engage buyers after the purchase?

If you find you don’t have answers for these, then it might be worth attempting e-commerce again, but this time with a more robust strategy.

Myth #5: Selling on Amazon Is Enough

The reality is, if you’re only selling on Amazon (or on Home Depot or other online marketplace that is not your own), you’re essentially a glorified affiliate. While access to that sales volume is enticing, Amazon owns the customer, sales process and distribution. On any given day, they could potentially turn off your product category with no notice.

If you’re not selling directly to customers, you’re missing out. If you look where the industry is headed, the companies that are winning are the ones that are going direct to customers. As a manufacturer, you have to find ways to own the customer and the experience.

We’re not saying you shouldn’t be on a third party site, but we are saying it may not be enough. Being on Amazon doesn’t fully check the e-commerce success box. As an example, there are roadblocks with third-party websites: They won’t allow you to customize your page the way you might want to in order to highlight a product or provide the necessary information. These roadblocks can turn potential customers off and lose you sales.

The companies who do e-commerce best are on third-party marketplaces for volume and learning, but then take what they learn and own the buying experience through a direct sales channel. Owning your data is critical. So use Amazon for exposure and volume that would have trouble reaching your direct site. But once you gain some momentum, apply that growth to your own site.

Check out the full podcast here.