In a recent article, Avnet Inc. Electronics Marketing Global President Gerry Fay outlined the company’s strategic move to transition more of its offerings online. Fay cited the move as driven by customer preferences: “The idea behind our Web-engagement is that customers want real-time information and we can provide this online.” Avnet’s decision underscores a dramatic shift in buying habits for electronic components.
E-commerce certainly plays a significant role, as does the expanded use of advanced search capabilities, innovative analytical tools, and a globalized customer and supplier base. In response, distributors are capitalizing on opportunities in the supply chain to deliver more flexibility and efficiency via e-commerce targeted to engineers and buyers. Likewise, they are responding to concerns about counterfeit parts and the gray market by partnering directly with manufacturers to ensure a secure supply chain and satisfying purchasing experience.
Like many industries, the electronic components industry moved to the Internet in stages. From offering print catalogues and paper data sheets for individual components in the 1980s, the industry began to issue inventories on CD-ROM before finally moving online in the past decade. This brought the obvious benefits; the Internet enables not only a seamless, “one click” buying experience for many users but also is used as a platform to research, and to review and compare products.
Although design engineers were one of the first to move their workflow online in search of information to help them evaluate and narrow down the list of parts that will work in their designs, the full benefit of e-commerce has been slow to develop as functionalities such as bill of materials (BOM) management and contract pricing were unavailable online and buyers clung to traditional vendor relationships with live salespeople. However, a 2012 ITSMA Buyers study indicates that those attitudes seem to be changing as B2B buyers increasingly rely on web searches and the solution provider’s websites as top starting points for their purchase journey.
An Industry Moves Online
Consider these recent observations from Components Direct, an Avnet company specializing in the distribution of hard to find components, specifically manufacturer-direct obsolete and end-of-life parts:
- Google and other search engines have become a part of everyday life and the primary way we search for and find information. For engineers and buyers, it is also a key first stop to searching for components and obtaining basic product information. High-level keywords such as "capacitor" and "SRAM" receive nearly 500,000 searches a month while specific part number searches (e.g., PAS5001-NM3-LF) or long-tail keywords, such as SCSI Bus Termination ICs, while low in search volume, often originate from searchers further along in the design or buying process. The graph depicts monthly searches on Google for frequently used components keywords.
- The use of Google and other search engines as a primary vehicle for finding and “getting to” information is also driving the growth of organic search leads to e-commerce websites. Organic traffic to the Components Direct website more than doubled in a 12-month time frame with over 60 percent of this organic traffic coming from outside the United States. By applying proven SEO and marketing techniques, Components Direct has been able to expand its customer base to capture interest from diverse markets such as Germany, India, Canada and China.
- Datasheet downloads from the company’s website (www.componentsdirect.com) showed a continued month by month increase in downloads per visitor by more than 50 percent per year, illustrating the growing use of the web as a reliable source for technical information and research. To an engineer, online content is a vital first step in preparing to create a new product, or in revamping an old one. In turn, these engineers become advocates in convincing their companies’ buyers to consider e-commerce stores.
In response to these changes in the online behavior of design engineers and buyers, manufacturers and distributors have increased their reliance on the Internet to publicize new products, provide easier access to support materials, and enable online transactions. An October 2013 survey by marketing communication firm Publitek provides more detail on how semiconductor companies are using online newsrooms as portals for functions ranging from providing updated content, such as product videos and corporate blogs, to facilitating contact with sales representatives and measuring the effectiveness of channels.
Electronic component distributors are also augmenting their online stores. As Avnet’s Fay points out, this involves not just the ability to order components online, but also “other critical information such as shipping, order status and even many design and other engineering functions.” Distributors who embrace the advantages of the Internet benefit in other ways, such as the ability to reach a global audience 24 hours a day and access to crucial market intelligence. Tracking the behavior of customers as they navigate through an e-commerce site allows distributors to gather insights which otherwise would be lost.