The internet remains a problematic area for wholesalers, according to the results of our latest reader survey. Online sales is clearly an area that wholesalers feel they should be looking at. But they are unsure as to whether their customers are ready to embrace the technology and therefore whether it is worth the risk.
Fewer than half (43%) of the wholesalers surveyed for our poll currently have an online sales offer, while 78% said they hoped to either add this service or improve an existing one. Only 14% said they believed their independent retailer and caterer customers had fully embraced the web.
What is worrying for some smaller wholesalers is that while they are still trying to figure this equation out, the big guys are already out there doing it. Booker, which took over internet wholesaler Blueheath in May last year, said it was already reaping the benefits of its improved online offer.
Sales through its internet site were £2.5m a week for the year to March compared with just £100,000 in the previous year, it claimed.
And yet Blueheath is still cited by wholesalers as a reason for not adopting an online offer. The internet specialist had yet to turn a profit in its six-year history before Booker took it over. In fact, prior to the merger, Blueheath had gradually been turning itself into a more traditional wholesaler. One wholesaler who replied to our survey said that Blueheath's inability to make online sales work was the main reason for not pushing into that area.
So while almost every other kind of business is looking at what online can do for them, the wholesale trade is still surprisingly divided over whether or not online sales are something they will have to offer in the future. As many as a third of those responding to our poll said online sales were not a must for the wholesalers in the future.
"If we are to survive, online wholesaling has to be an avenue we explore in order to take the effort away from our retailers," said one cash & carry operator. "This will give us direct marketing and sales access to the retailer, which in turn will drive loyalty."
But several other wholesalers said they would continue to use the internet as merely a marketing tool offering information on range and promotions. "We are looking at introducing online sales but it is a major investment," said another wholesaler. "Information and support may be a more important priority."
Not a major priority Buying group
?We do have an online sales facility, and a number of our wholesaler members use this option, but at the moment it represents a relatively small proportion of our total turnover.
It is mainly our catering and foodservice customers who buy online rather than our retail customers. However, the retailers are beginning to use technology much more for information and to keep up with promotions.
We are naturally keen to improve our service but at present it is not high on our list of priorities. I believe retailers will still prefer visiting the cash & carry for the bulk of goods.
Delivered wholesalers, however, will certainly make the switch to online ordering.
No time for the net Cash & carry operator
?Our retailers do not have the time to use the net and they still prefer to visit our branches.
The majority of independent retailers have not really embraced the opportunities provided by the internet. Many of them are not what you would call techies, and are not that comfortable with computers, and therefore still prefer the traditional way of purchasing.
At the moment we only use the web to display our promotional offers and that is as far as we are planning to go for the time being.
Blueheath tried to use an internet model but was unsuccessful. We believe it will be a long time before we will see the benefit of moving on to the web.
Too busy for learning Cash & carry operator & delivered wholesaler
?At the moment many back-office systems used by retailers seem to limit the potential for internet ordering because of lack of speed and ease of ordering. As with scanning, independent retailers have been slow to adapt and so have caterers. It may partly be due to their busy lifestyles which prevents them from finding the time to teach themselves and experiment.
Other retailers, particularly older people, find it a little intimidating, while foodservice orders are often placed by chefs who may not have access to the internet.
Ultimately I don't think online ordering will be a must for independent retailers. It may become more significant for catering customers but even then this will not be for some time to come.