Distribution & ecommerce
Reaping the benefits from ecommerce investment
Neil Tyler talks to RS Component’s Keith Reville about the relaunch of its ecommerce site earlier this year
R
S Components launched its first website back in 1998. Then it had 100,000 products and attracted over half a million visitors in its first year, from which it generated just 2 per cent of its revenues. Fast forward to 2011 and the company’s website is now one of the biggest in the world accounting for over 53 per cent of group revenues.
RS Components has operations in over 30 countries with distributors in a further 37 markets and currently supplies 1.6 million customers offering over half a million products from 2500 suppliers. Sales outside of the UK now account for 65 per cent of the company’s turnover which represents a massive change from the early 1990s when the company was primarily focused on the UK. While growth has been impressive it’s not a company that intends to rest on its laurels. At the end of 2008 RS committed itself to a major investment in ecommerce. On average the company spends around £2.5m a year on its website and despite the downturn in 2009 was determined to not only maintain but increase that investment. As a result the company has build an ecommerce strategy that is looking to support a £1 billion-plus ecommerce business based on a new website site that is able to offer an enhanced customer experience that combines the best in terms of design, functionality and performance. The company’s own research pointed to the fact that customers wanted to establish a deeper relationship with it - not one based solely on buying product. In order to ensure that its ecommerce site was in good shape for future growth RS decided to invest heavily in a new website which involved improving the site’s design and how customers searched for products. To that end it appointed Keith Reville to drive forward that transformation. Reville had spent four years with Orange, the mobile phone company, and before that been responsible for the global websites of the Hilton International hotel group and prior to that worked at Thomas
14 December 2011/January 2012
Cook, the travel business. Reville is dismissive of the terms B2C or B2B rather he believes in H2H - human to human. According to Reville the decision to move to RS was because, “I wanted to work at a global level and wanted to make a really big difference. The RS ecommerce business model had generated significant growth and the site had become a global force in B2B ecommerce. However, the company accepted that further big change was needed. It had grown on a rising tide of ecommerce over ten years and it was felt that it had grown to a point, reached a critical mass if you like, from which it needed to move to the next level. There wasn’t the level of expertise in the business to do that so I was appointed.“ Once he had joined the company Reville instigated research that enabled RS to understand what different sets of customers wanted and how they wished to work with the distributor. “To grow a website you have to focus on the customer experience and test what they want. Research was crucial because if you don’t know what they want how can you manage the site effectively? “We found that our customers wanted to view and select products in a way that suited them; and from a product perspective, they wanted accurate information and technical data, as well as relevant accessories.”
Reville was pleased by the response but not surprised. “I needed to hold up a mirror to the organisation to see how good we were. The empirical nature of ecommerce means you can measure almost everything and I was pleased not only by what we found out, about the customer experience at the time, but the scale of the opportunity that was available to the company.”
Accuracy and the quality of the search
tool are vital for a site like RS‘s. “With over 570,000 products the search bar is heavily used. We do our own tuning, measured by relevancy, and we’ve certainly come a long way to making it more
Components in Electronics
accurate. Our customers want that accuracy and it’s crucial that we get the right content that will inform their decision in front of them and we had real opportunities to improve the search and browse experience in terms of helping and guiding the customer.” To that end RS transformed the search
and browse experience by looking to cater for the different users who visited the website and by delivering a step change in on-site product search, so that when the name of a product or a product code was typed in, the exact product came up straight away.
“When I joined Hilton people came to the site to find a hotel, a room and a price they liked but in order to do so they had to wade through four pages to find that information. We re-designed the web site and ensured that the information they needed was on the home page and they could find it in under 30 seconds. As a result the use of the website soared.” RS has also looked to change the
product descriptions and advertising on the site, which has enabled the distributor to deliver targeted messages or offers at the relevant point in a customer’s online journey.
“The site is now acting as a trusted sales
advisor, who knows information and can offer advice. For example, if a customer buys a certain product, a related accessory will also be proposed.” With over 500,000 products in its
current offer, RS has an availability rating greater than 96 per cent and over 45,000 parcels are now shipped every day at industry-leading service levels. RS has gained immeasurably from the data generated by its ecommerce function. It provides a rich mine of information on customers’ purchases as well as when their ‘journeys’ fail and they don’t buy. Is it price, quantities or did they type words in the search box for products that weren’t available?
RS is certainly learning as much from these failed journeys as from successful
Keith Reville
ones, and is even able to know what its customers would have bought if the products were in stock.
As Reville explains “Demand-shaping is a key driver for us. If we don’t have enough stock of a particular product, how do we persuade customers to take a product that we do have in stock? If we’re running low on stock, how do we make that more profitable? Or if we have too much stock how do we promote that to our customers? We want to better manage our offer and our new website is a perfect vehicle for this, that’s why ecommerce is at the heart of our strategy.”
The site has attracted a lot of praise since
it was relaunched and the company won the 'Wholesalers and distributors' category of the Internet Business Awards 2011. The award was presented to the company for its success in developing a completely new business model centred on a redesigned presence online while still recovering from the worldwide recession.
Over the last two years, RS has invested heavily in digital marketing channels and has looked to transform its customers' online experience. It’s introduced e- procurement systems and electronics design tools, and launched one of the most advanced transactional websites in its industry sector.
As Reville concludes, “This has been a
journey for us. Ecommerce is now at the heart of our group strategy and the customer is at the centre of our ecommerce strategy. The new site has been able to measure customer experience and satisfaction which has provided us with a tremendous insight into how we can change and manage our sales growth and marketing mix. It’s vital that sales and marketing are better aligned and that we listen to our customers. We need to work closely with and keep in step with them whether they’re large or small.” With the ecommerce sales channel
growing at over 30 per cent month on month it appears to be a strategy that is paying dividends for RS. ■
www.cieonline.co.uk
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