Page 19 - Mar-Apr 23 Reporter

e all know that Jeff Bezos has made than the online sales of average US retailers. convenient for them. Brad also adds that
Wbillions of dollars selling items through This shows an opportunity for other building 51% of construction buyers report that
the internet. There is no retailer or supplier material companies to grow through online supplier websites do not meet their needs.
that wouldn’t like to grow their business sales. The COVID-19 pandemic accelerated Contractors research and source products
through adding additional sales through the the shift to online shopping. People at home using their phones. High levels of in-store
internet. The big questions are: where do I who could not go out to stores became more service provided by building material retailers
start, how do I do it, and is this really for my comfortable with shopping from home. is now no longer an advantage over the
business? All these questions are legitimate competition. Increasingly builders, contractors
questions. With margins being tight, no Who are you selling to? and renovators have higher expectations, and
business can afford to waste money on a There are two distinct customer groups they expect digital services which will make
technical effort that does not provide results. that online building material sales target. their lives easier.
There are many in the building material The B2B group is sales from dealer to According to The LBM Journal, (May 2022)
industry that have tried to dip their toe in the contractor and the B2C group is sales from of the top 100 LBM dealers in the US, just
online sales waters with little to no results
in increased sales or revenue. There are
countless stories of businesses spending
thousands of dollars with a tech guru only to High levels of in-store service provided by building material retailers is now no longer an
be disappointed. advantage over the competition. Increasingly builders, contractors and renovators have higher
Let’s start the discussion about sales and
the internet by understanding some of the expectations, and they expect digital services that will make their lives easier.
main technical jargon. The sales process that
we are describing is E-commerce. This is the
buying and selling of goods and services on dealer to consumer. Each group has different 31 percent say they had conducted sales
the internet, and the transfer of money and needs and marketing to each requires online in 2021. Of that group over 70 percent
data to complete these transactions. ERP is a a different approach. According to Brad had the ability to let their customers see a
common term that digital partners use. ERP Cumiskey, VP of Product at TOOLBX, the purchase history online. Thirty percent could
stands for Enterprise Resource Planning. This online B2B customers are younger. 73% of show their customers if the product was in
is the management of all the information B2B buyers are millennials and over 70% stock and just over forty percent could notify
and resources involved in a company’s of B2B buyers finding online ordering more their customers of delivery time. Most of the
operations by means of an integrated convenient. Many contractors, home builders group that could not provide these services as
computer system. It is the backbone that and renovators are working on plans and of 2021 are planning to offer these services
links your point of sale and your digital sales quotes when the stores are closed. Online in the future. These are services that the
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function. It is vital that a seamless connection ordering allows them to order when it is professional tradespeople are looking for.
be created when considering any move to add
E-commerce sales.
Where it all began
The growth of digital sales began in 1994
when Amazon was founded, initially as an
online marketplace for books. Starting in
1998 it expanded into a variety of product
categories. To the point where you can
currently find almost anything. In 2018
Amazon had about a 5 percent share of all US
retail spending (excluding cars and car parts)
and a 43.5 percent share of American online
spending. Canadian numbers are comparable.
Amazon generated $386 billion in US retail
e-commerce sales in 2020. Clearly Amazon
has a sizable lead in the digital marketplace
and anyone trying to catch them has a
challenge ahead.
Home Depot represents the largest share
of online sales for building materials. Home
Depot went live online in 2001 and added
a mobile site in 2010. In 2015 online sales
represented less than 5 percent of their total
sales. By 2022 online sales had grown to
almost 15 percent of their sales. The online
sales growth by Home Depot is growing faster

www.lbmao.on.ca LBMAO Reporter - March-April 2023 19