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The Smarter Building Materials Marketing podcast helps industry professionals find better ways to grow leads, sales and outperform the competition. It’s designed to give insight on how to create a results-driven digital marketing strategy for companies of any size.
In this episode, Zach and Beth talk to Lisa Prestifilippo, National Accounts Manager at Metal Sales Manufacturing Corporation, about the different types of people that buy on online platforms and what you can get from these sites to drive innovation and product development.
Getting Your Foot in the Online Door
Lisa and her team build relationships with major retailers like Lowe’s, Home Depot, True Value and Ace Hardware. Much of her work is around incentivizing corporate-level buyers to carry her products, which streamlines the process for local-level sales teams.
The other part of what Lisa does is strategizing distribution and stocking products through national online retailers. Metal Sales has SKUs listed with Lowes.com, HomeDepot.com and Amazon. Lisa says the strategy for listing with these retailers is very different than what they might list on their own website.
“For metal roofing, it's normally a custom roof ... cut to size and the custom color, whatever the customer wants. If you put on Lowes.com and HomeDepot.com, Amazon.com, these are more stock sizes.”
Many manufacturers struggle with how to make money online marketplaces, particularly the big box sites. For Lisa, she says the secret is using minimum orders. “There has to be a minimum. I can't be shipping onesy-twosy even if Amazon paid for my freight and all you had to do is ship one 12-foot panel. At the end of the day, I still have to crate that panel.”
But still, she sees the trade-off as worth it. Customers love the convenience, particularly for home DIY projects that need large materials. “I drive a four-door car. Even if I went to Lowe's right now and picked up an eight-foot panel, how would I get it in my car? So it makes it very convenient for these customers to just purchase online and it delivers straight to their door.”
With Online Marketplaces, One Size Does Not Fit All
Given Lisa’s experience with selling products online, Zach wants to know if she sees different customers on different sites. “Do you have different demographic profiles or different ideal customer profiles for the people that shop at those different ones? Is there a difference between Home Depot and Lowe's versus Amazon or do you feel like everything is the same?”
Lisa sees very clearly defined divisions between these marketplaces. “Home Depot is more pro. When you walk in there, you will see a lot more contractors picking up material. Lowe's I think is more design-friendly. You walk into Lowe's, they have better rugs, they have better light fixtures.”
Unsurprisingly, the demographics on their dot-com sites are different too. “On dot-com, I think you've got customers like me that are doing small projects. You also have contractors that have ordered a whole project at the pro desk and they're missing a piece. They forgot to order it or they didn't order enough.”
Whether online or in brick-and-mortar stores, the approach to sales in a big box environment is very different from a local co-op hardware or lumber store.
If it's not selling, they're not going to stock it.
“So for big box, it’s ‘turn and burn, stack it high, let it fly’ SKUs. If it's not selling, they're not going to stock it. At ACE Hardware, for example, I just fixed one of my cabinets and I was looking for a specific hinge. You would think Lowe's would carry it and they're like, ‘We don't carry it. It didn't turn very well. We unstocked it.’ But the Ace Hardware down the street, sure enough, had it. It's more customized to the market.”
With so many purchasing decisions happening at the national level, many big box retailers don’t have the agility to stock products that move slowly.
The exception to this rule is Amazon.
If You Sell It (On Amazon), They Will Buy
When it comes to deciding what to list on Amazon, Lisa says, “So Amazon, you can put anything up and someone's going to buy it. If they google metal roofing, all your SKUs will come up. And it doesn't matter if you've got an eave or apron or drip edge or anything. Someone will buy it.”
Like the big box stores, Amazon will stock the biggest sellers, making them available through programs like Prime. “They actually ship it direct to customer and that makes that SKU a Prime SKU, because now I'm not running it and shipping it. It's already stocked and they ship within one to two days.”
But even the SKUs that aren’t as in demand, Lisa and her team will still list them on Amazon for the value of the search engine optimization, and the knowledge that someone, somewhere is looking for they have to sell.
Amazon makes its brand on convenience. As Beth says, “It sounds oversimplified, but there is someone right now searching for [your product]. There's that contractor who's like, ‘Oh, I mismeasured, I'm five pieces short. How much time is it going to take me to get in a truck, drive to the location, get them to order it? Maybe they haven't had stock. Maybe they don't.’”
And while big box stores want a proven product, Lisa’s experience is that Amazon is far more proactive in working with its suppliers to find and stock the products customers want.
“When it comes to selling to big box, it's all about data. I have to have the proof; I have to say, ‘Hey, this is an awesome SKU. It's going to turn.’ Right now in building materials, they want four to five turns in 52 weeks, which is a lot.
“For Amazon, they have a whole team that will reach out to me, and say, ‘Hey, if you drop this SKU two cents in price, you'll sell 22% more.’ Sure enough, drop the two cents, it's guaranteed. They'll tell me ‘Right now, you've got in brown and black. If you added in green, it'll sell 25% more than the brown.’ Sure enough, it does.”
Using Merchant Partnerships for Product Development
While the big box practice of only stocking top SKUs and charging manufacturers to return inventory that doesn’t sell is more old-school, Beth wants to know if Lisa sees those methods turning more toward the Amazon model.
“What we've heard is really the pressure is on the manufacturer to prove: ‘I'm going to be a good partner. My products are going to make you money. If you stock this new product that we just launched or this same product in this new color, you're going to sell significantly more. Here's the data to back that up,’” says Lisa.
“Do you anticipate in your relationship that dynamic changing and them having to move into more the relationship you have with Amazon, where you have Lowe's coming to you saying, ‘Could you make this in red because we're getting a lot of demand for red roofing?’” Beth asks.
"That's the best relationship you can have is working with the merchant."
Lisa is seeing that shift slowly. At a previous company, she worked with Lowes to develop a product that was already in demand. “Honestly, that's the best relationship you can have is working with the merchant on a product and getting their advice. You know it's going to sell because they're backing you up.”
She says working with one merchant is a great way to gain leverage with others too. “I can say, ‘I've got Home Depot stocking it. So you want your customers walking across the street and buying the whole job there?’ So that's a huge leverage point.”
Zach is all about the data. “What I love is that you're using data to make decisions on product development. We make this recommendation all the time, but the fact that you're using this and not only fueling your marketing efforts but fueling the products that you develop based upon real-time data, it gives you real-time insights into what your audience really wants.”
Why You Want To Get Listed On The Never-Ending Shopping Aisle
Zach wants to know if Lisa has any insight on the strategic direction these online platforms are trying to take. “Where is Amazon trying to go with building products? Where's Home Depot and Lowe's trying to go with their online sales as well? Do you have any insight or any ideas on where you think strategically they're trying to go as organizations?”
Lisa says, “For Amazon, I call it the never-ending shopping aisle. You could pretty much find everything you've ever wanted on there.”
For Lowes, she is seeing a bigger push to adopt a wider variety of products available online. And while the necessary minimum orders Lisa needs to list mean that the average buyer is unlikely to purchase the product they want online, it gives them all the information they need to make an in-store buying decision.
“They've done all the research. So when they walk in, they know they're asking for my product. They're asking for my SKU, my company. When it comes to ‘Where are these guys going?’ dot-com is a never-ending shopping aisle. They want every SKU up there. Even if it doesn't sell online, it'll sell in-store.”
The key detail is that buyer behavior has changed. “They know what they're looking for now. They're not asking, ‘Hey, how should I build the roof?’ They're saying, ‘Hey, where's your corrugated metal roofing panel? I need this and I need a pack of screws.’”
Listing products online, even those that don’t sell well online, should be a critical component in manufacturer marketing strategy.
Make Purchasing Decisions (And Life) Easy
“If we're not making it convenient for our customers, they will go somewhere else."
Lisa says the status quo doesn’t work anymore. “If we're not making it convenient for our customers, they will go somewhere else. Unless you've got a product that no one else in America makes, you need to be way more open-minded, and you need to make your product available multiple ways: in-store, online, in distribution.”
Whether your customers are homeowners, contractors or even the vendors themselves, convenience and availability in a competitive marketplace are critical. “If it's not accessible, they're going to find another way. That's it. They're going to find another vendor and they're going to buy metal roofing either way. So make it easy and you get the sale.”
Lisa says this philosophy needs to apply to more than just sales and marketing, too. Every customer touchpoint needs to be as streamlined and convenient as possible. She cites accounting departments who need three days to set up a new account, while the competition only needs one. The goal of the entire company needs to be about making doing business with you as easy as possible.
Got a Question?
Get in touch with Lisa by email.
If you have questions about how to build your online marketplace strategy, let us know! Shoot us an email at [email protected] with all of your questions.