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Central Distributing, continued
Scott feels that the flooring industry has been slow to acknowledge the potential of the Internet.
"There are a few who are embracing the Internet, but there are many more that don’t know how it can help them, so they’re not jumping into it.
If it became an avenue that was profitable and easily justified on a balance sheet, then I’m sure everyone would jump right in.
Right now, it’s still a gray area."
"It’s not a profitable venture for us yet, but I don’t think we can wait until it becomes profitable, because by then, we’ll be too far behind."
Scott’s making a calculated decision to invest in capability instead of hoarding his cash at the expense of limited and outdated options down the road.
He’s playing to win.
Moving forward, however, Scott sees that trend as one that’s changing.
"It’s a wave that’s moving down the line of distribution.
If you had asked us two or three years ago how many of our retailers had Internet access at their stores, it would have been in the single digits.
We’re in the double digits now, but we are by no means all the way there. It’ll come."
"The manufactures are grasping it and running with it. We (the distributors) realize that we need to be online and are trying to catch up.
Our retailers are probably the next in line to grasp the benefits of the Internet and what they can gain by using it."
Knowing what’s happening up and down the length of the value chain is going to become increasingly important for leaders going forward.
This is a version of market savvy that quickly translates into competitive advantage.
"The one group that really isn’t using the Internet at all is the professional installers.
There’s so much information available to them about what products are out there and how best to use them, and yet so few of them are Internet savvy."
Scott’s #1 business goal for Central Distributors is, of course, to remain a profitable and competitive company.
How does he feel the Internet can help?
"I look at the Internet, for us, as an educational tool for our customers.
The more we can do with the Internet and with our web site, the more time we can spend running the business without interruption, and the better off we are.
We want to be known not only as a source of supply, but a source of information."
You can see here how Scott and Central Distributing are building the capability to add unique value for their customers to the product offerings that might be able to be matched by competitors.
The addition of information is expected to be a differentiator. If they know their customers/markets well, it really isn’t much of a gamble.
And beyond being a source of information, he says they are moving towards online sales and e-commerce functionality; flooring retailers will soon be able place their orders directly through the site.
He believes that this is a solution that will grant his customers more flexibility, while providing him with cost savings.
Plus, there’s the added benefit of knowing that order information will have fewer errors, and by getting information immediately into a computerized system, they can lower the possibility that an order may slip through the cracks.
"We want customers to be able to check availability and order online rather than go through our order desk.
If they place an order with us, we have to transcribe it from the phone to the computer.
There’s a potential for errors there. If we can get them to place their own orders, we know that it’s being entered correctly.
And when they place their own order, it’s immediately in our system. Not `in a few minutes, ´ or `when I’m done entering this other order. ´ It’s in there right away."
Scott really believes that understanding the business ideas and brand promises of his customers, and then positioning Central to partner with them around THOSE requirements is a key to sticky relationships with customers and long-term success.
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