When it comes to online equipment dealers, you either have to fight ‘em or join ‘em.

Many dealers face the threat — real and perceived — of other retailers who sell parts online. Many customers shop online and spec out the equipment they want so they can ask several dealers to quote. How does your operation built around bricks and mortar compete with so-called online retailers?

Customers who shop online want the best of both worlds. They want to experience the products (demonstrations, touch, feel) and they want to buy online (discounts, availability). Who wouldn’t want both? 

How to Compete

But the need to deliver both the customer experience and to compete with online retailing presents a business dilemma. 

The loss of volume and/or margin to online retailers from a business model centered on paying for brick and mortar (and inventory, tools, image, etc.) may threaten your business model and make it economically unsustainable. So how do you compete?

Before we get to the answers, let’s see if we can agree on some assumptions and a few facts.

First, online retailing is here to stay. It is playing a major role in merchandising and marketing no matter the industry. As farmers, contractors and rural lifestylers experience buying books, goods and even appliances from Amazon, they expect no less of a customer experience from their farm equipment dealer. 

In previous columns, we’ve stated the tremendous increase in the number of mobile devices used by farmers, as well as their use of social media to stay in touch with what is going on. (See “Social Media: Colossal Waste of Time or the Future of Markeing?,” Farm Equipment, March 2014). 

Your customers are far more sophisticated, plugged in and mobile than ever. And these trends are accelerating. (See “Are You Ready for the 2nd Machine Age?” Farm Equipment, April/May 2014)

Second, those who adapt the fastest will survive and thrive. The disruption to the traditional bricks and mortar business model creates opportunities. Those who exploit the opportunities created by online retailing will benefit.

Third, understanding customer benefits and needs can help dealers form the core of a new business model.

Online Expectations

What are the benefits and needs of your online customer and what do they want from online retailers?

  • Access to the widest variety of products, services and information no matter where the retailer, or their inventory or production facilities are located. 
  • Ease of shopping with little time and physical activity required to shop and buy. 
  • Any time, any place, 24/7/365 access from their mobile devices.
  • Best price or value available.

If online retailing is impacting your business, how do you react?

1. Use disrupting technologies to fight technologies-based disruption. Use mobile as well as web-based applications to provide the widest access to:

  • All your products (equipment, parts by brand and application)
  • Your value-added services and information (stock levels, pricing and purchasing details)
  • Your stores (locations, contacts, inside views, departments concerned, delivery practices)
  • Develop your own app so online customers can buy anything at anytime.

2. Create a WOW! customer experience whether they’re online or on foot. Ensure that every customer who visits your place of business, your website or uses 
your application:

  • Is fully informed upon entering (whether aware or not through web/mobile app) 
  • Gets immediate attention if he has made a prior appointment
  • Have no hassles. Make it quick and easy to order with fast delivery. Provide fast/immediate billing, an excellent waiting area, well-marked and clean interiors/exteriors. 

Particular emphasis should be given to reducing the time spent on any activity where there could be “pain.” This means paying the bill or getting a machine fixed. Saving the customer’s time here is a double win: You collect and the customer has a good feeling. Quick, professional and empathetic actions here can provide a great defense to any impersonal, disruptive business practice like online retailing. 

3. Remember what customers are telling you and decode what they really mean.

The best online retailers are very good at interpreting customer’s unmet needs. For example, Amazon suggests other items to buy based on your previous purchases (or what others like you have bought). They do this because they can easily record every customer inquiry or keystroke.

In our business, we call it customer relationship management or CRM, which records every customer interaction with your dealership, no matter the department or venue. This is easy to say and hard to do, but it will pay off in better understanding of what your customer wants and could potentially purchase.

The ‘Little Things’

An apt saying for what we’re talking about here is, “If you take care of the little things, the big things take care of themselves.” If you remember and interpret the customer correctly on the little things they say, do or need, they are far more likely to buy from you — and for a long time.

Finally, in addition to the three ways to compete with online retailers listed above, the following factors can also help create a positive 
perspective for traditional brick and mortar businesses.

  • Online retailing business is and will remain price sensitive with thin margins. Online retailers can only compensate with high volumes. You can and should be able to deliver profits with lower volume and higher margins through a better total customer experience. 
  • Online retailers are under pressure to deliver products as quickly as possible. They have the cost of high inventories to meet high expectations, which means they must target very high volumes of customers. 
  • Online retailing is growing rapidly with the number of players growing daily. So, there is scope for others to enter the business with a complementary business model. 
  • A great customer experience requires physical touch. We cannot get away from the fact that our customers must touch and feel the product, and like to do business with other people face to face. So the best model for the future will be a combination of bricks, mortar and people plus your own online retailing.
  • Dealers need to hit back by using the same disruptive technology as their online competitors.