Ecommerce has been a tough challenge for electrical wholesalers, so how are they tackling it? We spoke with four Gemcell members to discover how they’re approaching digital routes to markets, the opportunities and the risks.

J.A. Russell: A nuanced approach to the in store-online mix

With 78 branches across New Zealand, J.A. Russell Ltd is a well-known name among the country’s electrical contractors.

The business’s online and ecommerce presence is targeted purely at contractors – with the company having almost 8,000 accounts registered to purchase from its trade portal, which launched in 2017.

“Online sales are between six and eight per cent of our sales per month, and 80 per cent of our online business comes from around 1,400 accounts,” says Craig Grammer, the company’s long-standing CEO.

Once logged in, customers can see product availability, prices and quantities – and by virtue of the huge store network, it will show users the nearest location to collect product from.

“You can see stock in all of our branches. It shows you where that product is, so a contractor can just call in and pick it up, wherever they are,” says Grammer.

“We have one price file across all branches, we’ve got a centralised database and centralised discounts – so a contractor can go anywhere and buy at their rate.

“For products that people need urgently, the website is very popular.”

As well as that ‘need it now’ trade, Grammer says the trade portal has made it a lot easier for contractors in terms of job scheduling.

“For example, if a contractor was working on the first four apartments in an apartment building, they would order online for the first four – get it packaged up and delivered – and then order the next box lot for the next apartment. It offers a lot of flexibility in placing orders for specific job sites and specific projects.”

Thanks to the trade portal, the team at J.A. Russell Ltd gain significant insights into product and purchase trends – with one notable insight being that online customers spend 50 per cent more on average per transaction.

A continual challenge, however, is covering all of the search terms people will type in.

“But we go through all of the search and purchase history to continually improve the search results we generate.”

Longer-term, Grammer sees the purpose of the site and the stores becoming increasingly complementary.

“First and foremost, it’s all about access to information to help you make the decision. If you want basic, simple information you can get that via the web. But if you want nuanced, technical, special information – when there’s nuance to the project you’re doing – you are going to call into the branch to talk to the rep or the account manager.”

Middy’s: Ecommerce just one piece of the digital jigsaw

Middy’s sees ecommerce and, more broadly, the digital experiences it can deliver to its contractors as essential to the business’s progression over the coming years. But they’re well aware of the threat ecommerce poses to the sector, too.

At present, contractors can order products online and have them delivered or pick them up in branch – and Ryan Scott, Middy’s Group Marketing and Digital Manager, says the wholesale chain is investing heavily in ecommerce, while remaining true to the human-to-human connection.

“We know from our platforms that contractors come to the website to research products but prefer branch retrieval or direct delivery,” says Scott.

“We’re investing heavily in a new tech stack that will enable us to create better customer journeys and deliver a better customer experience – with the initial aim of having the industry’s best product catalogue.

“We want to own the product research piece, and then build from there.”

Scott says that while an ecommerce offering serves a functional purpose, the greater opportunity – and one which Middy’s is set to take advantage of – is to offer contractors access to project management and financial software alongside the product catalogue.

“Ultimately, the digital platforms should not only save contractors time, but they should help and enable them, too,” he says. “From a sales perspective, it’ll make contractors stickier as they’re already in our environment.”

Of course, as with any technology, adoption is critically important. Middy’s sees the younger generation – 36 and under – place orders online daily.

The older age group averages around one order per fortnight. And Scott says reverse mentoring will be important.

“That younger age group has grown up with online retail – they expect it,” he says.

“Right now, the apprentices will be sent to our branches to get products. If we have the right platforms, the apprentices will be sharing the platform with the older generation as, realistically, that hour is better spent on the job than travelling back and forth.

However, Middy’s is well aware of the downside of ecommerce in the industry – consumers buying substandard products online.

“It’s important for everyone to be buying quality products,” says Scott. “If you’re installing inferior products that have been bought online, you’re eroding your margin and you’ll be the one being called back to fix it.”

Gordon Macdonald Electrical: Being there when contractors need product

Striking that happy medium between serving the contractor market as well as being open to consumer sales is one that Gordon Macdonald Electrical, which operates on the south coast of NSW, is very conscious of.

“Our mantra as a wholesaler is that we support the contractor. The contractor should be the one buying the products and installing them for the consumer,” says Scott van Eck, General Manager at Gordon Macdonald Electrical.

“If we advertised contractor prices publicly, we would undermine contractors and ignore the important role they play in the electrical industry.

“We set up a separate retail site, where the customer can be inspired and find products they want in their home, and we also have a trade portal that contractors can access with a login, where they can see all of their quotes, historic orders, invoices, and are able to place orders too.

“That side of it is more self-service, and that is very much based on the long-term relationship between the wholesaler and the contractor.” Having had the trade portal set up for the past of year, van Eck has found contractors use it for certain items, but come in store for others.

“Some contractors have that ‘oh crap, I need something for tomorrow’ situation and they’ll jump online and order it, and if it’s just a commodity – for example, they need a box of powerpoints for a house they’re working on – they might buy it online.

“For more considered purchases, however, they’ll come in store. While we’re not qualified electricians, we do know and understand our products, and contractors do come in to sense-check something, or if they’re looking for something different.

“That advice piece is still very strong in a lot of our product lines compared to the standard commodity items.”

The longer-term challenge, of course, is to establish that trusted adviser element online in a way that contractors will find both useful and will engage with.

For now, offering in-store specialist advice together with online convenience seems to be striking a pretty good balance.

POPES Electrical and Data Supplies: Prioritising service around the clock

POPES Electrical & Data Supplies in Canberra is driven by one thing – they want customers to be able to shop with them whenever they choose. And it’s this philosophy that’s guiding the efforts to build out its current ecommerce presence.

“If contractors need product advice and information, they’ll come in-store or give us a call,” says Daryl Read, Managing Director of POPES.

“What we’re missing out on at present is the work they’re doing at night, when they’re quoting and ordering products for clients. They’re shopping online with other people, and we want to fill that gap.”

POPES currently has an online catalogue listing products at retail prices, and work is underway to bring that to life – with individual pricing for contractors, too.

Of course, one thing that an increased focus online does is potentially dilute the ‘trusted adviser’ role of wholesalers – and how you bring this into an online experience is something high on Read’s agenda.

“We’re really good at engagement, so if people are placing orders online and all we’re doing is delivering the product, then what’s the plan for our delivery drivers? How are they going to engage and add value? If that’s the only face-to-face value, then we need to make sure that’s right.”

And it’s this mentality that’s driving POPES’ evolution online, because if all you do is sell products, it can become a race to the bottom.

“Our intention isn’t to compete on price online. Our intention is to service our customers,” says Read.

“An online store is another way for them to shop with us. Yes, customers can shop online for the best price, but they can also do that by visiting three different wholesalers.

“Our customers come in here for the product, yes, but also for the banter about their football team and the service they get, so while ecommerce will complement what we do in-store, it won’t replace it.”