Jul
19
2012

Same stock, different day

Our guest blogger Jessica Stark explains: How to edge out competitors that do the same thing you do

When it comes to doing your shopping online, sometimes the hardest decision isn’t the value of the product itself but, rather, where exactly to make those purchases. Oftentimes it can be a headache just trying to track down one site as having greater advantages than its competitors, either due to product offerings or shipping rates or policies designed to maximize customer satisfaction.

The fact of the matter is that, in many cases, many online retailers share similar qualities — similar product lines and prices to boot. This makes the task of one business distinguishing itself from the rest of the pack even more reliant on qualities and characteristics that may not be the most vital to consumers.

But as Amazon cuts the ribbon on its new online shopping portal, Amazon Supply, wholesale retailers and other business-to-business goods providers are taking a second look at how they appeal to customers.

Online Shopping, Amazon

Changing the rules of the B2B industry
Quickly, Amazon Supply has rolled out an armory of strategies for taking down traditional B2B vendors. Their marketing strategy is simple: emphasize the Amazon name and the low-risk incentives for test-driving the new website. Amazon Supply boasts a 365-day returns policy, lines of credit to corporate clients and free shipping on orders exceeding $50. That’s a lot to tease their prospective consumer base with, and the trappings are likely tough for retailers like Grainger and Home Depot to match.

Amazon has much deeper pockets than any other retailer in the industry, and that’s an advantage that simply can’t be matched. Amazon can afford to be more competitive with its prices, shipping rates and other incentives because it has more money to sink into prospective customers.

But while that gives the online shopping giant an early lead in the race for customers, it isn’t a decisive characteristic, nor is it the only one that consumers will collectively weigh when considering suppliers.

Establishing a customer relationship
People are creatures of habit; the same goes for businesses. The core decision-making attributes of cost, reliability and efficiency are still at play in any transaction, but businesses also understand the value of a strong working relationship. In exchange for their business, many companies look for vendors and suppliers that will be watching out for their best interests.

That in itself is a window of opportunity for smaller outfits — even large retailers like Grainger whose breadth of operations pales in comparison to the Amazon behemoth. Both retailers will sell specialty lighting equipment, but one will be tapping on an entrenched and hopefully loyal consumer base, whereas the other will count on its massive retail muscle to translate over to the B2B market. As businesses grow, the question of “How big is too big?” becomes all the more relevant, and the task of managing the same quality of service becomes tougher. By maintaining operations and focusing on customer satisfaction with each individual client, businesses like Grainger and others may find it possible to find a footing against larger retailers.

And Grainger itself boasts some inherent advantages over Amazon that will be difficult for the online retailer to overcome. For example, Grainger and other wholesale and industry-specific supplies companies have physical locations throughout the United States, offering a shopping option that doesn’t carry a two-day delay on products. While those transactions don’t occur online, they do indirectly benefit online sales because consumers are more likely to conduct most of their shopping through one supplier. If they purchase goods at physical stores, they’re more likely to use the same business when shopping for savings online.

As Amazon Supply moves ahead with its entry into the business-to-business retail industry, the waves created are expected to reshape the industry, with smaller competitors vying to separate themselves and offer a set of products, services and benefits that Amazon can’t, or won’t, match. The increased competition will create a more consumer-friendly environment. But it will also demand that retailers like Grainger take greater strides to further differentiate themselves, surviving and competition with Amazon Supply by changing how they approach their consumer base.

Post by Jessica Stark*
 

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About the Author: Nadia Majiet