Business models change with the industry. In the electronics supply chain, distributors evolve along with their customers' demands, as well as their suppliers'. As a result, some of the terms used to describe channel players -- broadline, specialty, franchised, independent, catalogue, etc. -- may be too narrow to fit a distributor's actual role in the channel.
Last week, I asked whether a catalogue distributor is still a catalogue distributor, if it doesn't have a printed version of its products. (See: What's in a Name?) The answer was generally "yes."
Today, I had the opportunity to speak with an executive associated with Newark Corp. , the electronics industry's largest catalogue. Kevin Yapp, global head of marketing for Newark parent Premier Farnell plc (London: PFL.L), discussed how the catalogue distribution model is changing with the times.
In short: What used to be a fairly simple transaction -- purchasing a component -- now is far from simple. Yapp had this to say:
Our core customers are increasingly data-hungry. Three years ago, information on the environmental impact of a product would have been nice to have; today it's a "must-have." The information customers need to make a decision is what I call "soft data" -- what people are talking about on social networks (how a product is performing, rumors that it might be replaced). People increasingly want to collaborate across country boundaries. I think what we found is the convergence of what would typically be a purchasing decision and the kind of community behavior you see on social networking sites.
In response to this, Premier Farnell several years ago launched element14, where engineers can share product reviews and opinions, ask questions, and brainstorm. Yapp said:
As we look at what is happening, we see our customers want social media tools and they are very data hungry, so we are evolving a "blended channel" to best meet their individual needs -- and that includes a paper catalogue, picking up a phone and talking to a salesperson, and online research and conversation. We are taking all those channels and creating a unique mix.
For example, the original element14 concept did not link the site with Newark or Farnell's components store. Now, users have the option to link to a purchasing site at a number of different points within element14. "What were viewed as two very separate things two years ago are now converging rapidly," Yapp said. "Now our customers can click between the two sites as they are talking with other engineers."
The Newark and Farnell organizations have always done in-depth research and analysis of customers' needs and habits, and Yapp says a typical engineer can be looking at various sites displayed on four or five monitors on a wall while he talks on the phone and flips through a paper catalogue:
While we know purchasing transactions ultimately end up at the [store] site, that is only the finishing part of the process. There are the research and planning phases -- the customer is leveraging what we call our multichannel model and coming in to the stores through different routes. We have been very careful not to confuse the transaction with the [front-end] relationships. It is complex mixtures of channels [designers] go through before the order is even placed.
It is this realization that's keeping distributors on the move. Purchasing relationships are not about transactions -- they're about front-to-back-end support. And if you have a short, pithy term to describe all that, we'd like to hear from you. Let us know on the message boards, or drop us a line at email@example.com.