An office supplies company says it will reach its goal of $150 million in business-to-business online revenue this year, a 37 per cent increase over 2000.
Grand & Toy Monday said it had generated $107 million in online business-to-business (B2B) sales through three quarters, but according Mike Duggan this tells only half the story. The director of commercial marketing and e-commerce says what’s more important is this represents 26 per cent of its total sales.
The increase is a combination of factors, Duggan explains.
“Our business absolutely lends itself to this type of transacting–commodity type product repeat purchases — and we built some intelligence into the system to allow people to build standard-order templates and that kind of stuff because it’s very much a repeat purchase in a lot of cases,” he says.
“The other part is we built this thing right from the start based on what the customers were telling us what they wanted the system to do. We’re not implementing technology just for the sake of it.”
Duggan says up until about two years ago e-procurement was the domain on the enterprise-size customers, but more and more medium-sized and even small companies are using it today. While smaller players are taking care of their office needs online, order size is increasing. He says the average online order size is close to $200, an increase of about $60.
“There’s more product on our site available to them than there is through our paper catalogue so they can find stuff easier, rather than having to phone around,” Duggan says.
According to its research, customers weren’t interested in bells and whistles. Customers want to order supplies as quickly and painlessly as possible and get on with other tasks. Duggan says ordering office supplies represents less than five per cent of an employee’s time.
Moving customers away from the traditional transaction channels — phones and faxes — is a win-win situation, says Duggan. Customers get more detailed product information, he says, and fewer ordering errors are made reducing return costs.
The Don Mills, Ont.-based company is driving current customers to order online through a few methods. Duggan says it has done direct mailing campaigns, offered some baseline incentives for customers to try it, and using its sales force to spread the e-commerce gospel.
As for the future of its e-commerce operations, Duggan says it plans to assimilate its enterprise ordering system, OrderPoint, and launch an electronic invoice and payment application early next year.
