A Profitero study showed Target’s online prices were 25% more expensive than Wal-Mart’s, which were just slightly more expensive than prices on Amazon.
Success in e-commerce requires each retailer to match its strengths to customer needs.
The key to success in e-commerce lies in matching a retailer’s strengths with the needs of its customers, explained Paul Miller, vice president of e-commerce at W.W. Grainger Inc. And the first step is to understand what the customer is trying to accomplish, Miller said in a keynote address this morning at the Internet Retailer Web Design & Usability Conference 2012 in Orlando, FL.
“You’ve got to clear away the clutter and find out what it is they’re trying to do,” Miller said. “How do you make it so they can find it, buy it and move on?”
At Grainger, which sells maintenance supplies, tools and spare parts mainly to businesses, that started with understanding that the company services two primary types of customers: the person in the field who is using the equipment or supplies and the purchasing agent back at the company’s headquarters. With that understanding, Grainger redesigned its web and mobile sites and apps to serve both types of customers.
Purchasing agents want to know the status of their orders and what they ordered before so that they can replenish their stocks. Since Miller joined Grainger a year and a half ago the company has redesigned its web site so that when agents return to the site they are recognized and can go directly to their current and past orders.
To make it easier for the purchasing agent to find what she has ordered in the past or that she is authorized to buy, Grainger allows customers to refine their searches by past purchases and by “my catalog,” which features the items within Grainger’s 900,000 SKUs that each customer has selected for possible purchase.
For the other type of customer, the contractor or maintenance manager who may need a part in a hurry, the site now enables him to enter his ZIP code to see whether a part is in stock at a nearby facility and when he can pick it up, sometimes to the day or hour.
Grainger also created mobile apps with both types of customers in mind. For the end user who is generally in the field, Grainger’s mobile app lets him quickly identify the part he needs and request purchasing approval. For the procurement specialist, who may be stuck in a meeting, the app lets her see purchasing requests and give approval without going back to her desk and logging on to the Grainger site.
Innovations like these, Miller explained, helped Grainger increase its e-commerce sales 17% in 2011 to $2.1 billion. Grainger is No. 15 in the Internet Retailer Top 500 Guide.
All e-retailers, large and small, can prosper by understanding their customers’ needs and coming up with creative ways to meet them, Miller said. He concluded with a five-step process for accomplishing that:
- Listen to your customers. “Start by observing what you see on your site. Meet with customers. Figure out what they are trying to do and how your business can add value. By listening and observing you can get a good sense of what they’re trying to do and design around it,” he said.
- Determine your company’s strengths. At Grainger, Miller said, it’s a lot of inventory held in many locations and the expertise of its personnel. “Even Amazon isn’t the best at everything they try to do,” Miller said. “Find your strength and harvest it.”
- Prioritize. Since no company has unlimited resources, it’s important to know how each initiative adds value to the company and how it fits into the organization. “It frees you up to focus on the most important things,” Miller said.
- Be inspired by others, and not just direct competitors. Miller explained how he encourages his staff to look at all kinds of web sites and how they meet their customers’ needs. “Don’t be afraid to step out and do something that’s a little different, a little inspired by what others are doing.”
- Test early and often. “You can’t test enough,” Miller said. “It’s too fast-changing a world to launch something and think you’re done.”
By following this approach, Miller said, “you can drive businesses that go well beyond expectations.”