Formed in 1923 Conrad Electronic is a German family business. With over 3.900 employees it operates in 17 countries through local-based subsidiaries and resellers. It recently acquired the British component distributor – Rapid Electronic – and made a number of significant new appointments as it looked to strengthen its purchasing and marketing functions.
CIE spoke with the new members of the team: Holger Ruban, Director Business Supplies Europe; Shawn Silberthorn, Supplier Business Development Manager and Melanie Lauer the company‘s new Head of European Marketing for Business Supplies.
Question 1: Several distributors offer ‘own brand’ products. Where does the technical capability come from to develop these products and do they offer benefits versus well-known brands?
Shawn Silberthorn: “Own brands” are not always self-developed by distributors. Sometimes they are just white labels bought in Asia and being branded afterwards. Nevertheless they usually full-fill a good standard in terms of quality and pricing since distributors would only ruin their name by offering poor quality items. But this implies also that two or more distributors might offer exactly the same item, which is only branded differently. Conrad deals with own brands, but we have established a department called the Conrad Technical Centre (CTC) which employs qualified engineers for both R&D and Quality Assurance to ensure we have the right in-house ‘technical capabilities to develop innovative high quality products by ourselves. The production is outsourced to reliable partners who have been cooperating with us for years.
Conrad brands, such as Voltcraft, Toolcraft, C-Control, Conrad Energy, Sygonix and many more, are less expensive and only available through Conrad. Besides being cheaper they are definitely competitive to well-known brands in terms of quality. To ensure this we have established a Conrad Quality Control Center (CQC) that is responsible for the assurance and continuous improvement of all products and processes on the basis of the corresponding DIN standards.
Question 2: Distributors ship hundreds of thousands of individual products ranging from simple resistive components to complex test equipment. How are decisions made as to the level of outgoing inspection /quality control, and what resource demands does quality control place on the business?
Holger Ruban: Quality control can be a cost and time intensive task but one that every distributor should follow. It means more than just checking if the delivery is complete. A complete quality control system such as Conrad’s so-called ‘360°’ approach includes storage spot controls on specific quality messages and an ongoing dialogue with suppliers to improve products and product quality. Furthermore, compliance with prevailing laws and standards must be achieved which means details of all regulatory requirements need to be gathered planned for, realised and communicated. Incoming and outgoing good inspection are standard for distributors like Conrad. They include technical quality, functionality controls, inspections for first deliveries and labelling.
Question 3: Distributors are a source for a diverse range of products all with different potential environmental impacts in use and at end-of-life, should they have a responsibility to provide environmental information regarding the products they supply?
Shawn Silberthorn: RoHS and a range of other standards and regulations are of huge importance and must be addressed by product manufacturers; therefore the responsibility of suppliers of multiple types of devices and products – i.e. distributors, should provide a good single point of contact for information and support.
Conrad gives information about Energy efficiency, Disposal of waste electronic equipment, batteries, rechargeable batteries and packaging, Electromagnetic pollution, EU Chemicals regulations, RoHS and REACH and many other standards and regulations. Furthermore, it is important that the distributor full-fills the highest requirements in terms of its own eco-management and sustainability.
Question 4: Where do the greatest opportunities exist for distributors – in MRO or new product design? Is this impacted by or does it provide an indicator of economic conditions?
Melanie Lauer: Design Engineers need the most recent products, are time to market driven and need services to improve their efficiency. To serve the design engineers community properly, it is crucial to offer the best quality and the most recent developments plus important related products such as development tools from trusted brands.
To support design engineers, services such as PCB prototyping and assembly are also important. We’re seeing strong interest in our calibration service as customers seek to consolidate the number of suppliers they work with.
MRO customers need a reliable partner for fast delivery to keep their own stock at a minimum to avoid extra costs. These extra costs can also be reduced by minimising the number of distribution partners with whom they work to enable a reduction of employees within the purchasing department. Solid eProcurement systems including approval workflows and automated reordering are highly requested capabilities. MRO customers seek a wide choice of all the products they might need, such as tools, safety, technical items, test and measurement equipment and office products. Having a sole distribution partner means having one partner instead of many.
Question 5: How can a distributor ensure that they are offering the very latest technology to its customers?
Shawn Silberthorn: At the beginning stands the knowledge of the distributor’s Supplier Account Management team. Close to the markets, they are aware of trends and requested products through competitor monitoring and conversations with the sales teams and the marketing people. But also the close cooperation with suppliers plays an important role since they are usually the ones having the best overview in terms of product requests concerning their own brands.
Once the product choices are made and items are listed the ‘marketing engine’ needs to get started to communicate new franchises, solutions and product portfolio extensions to customers. Important vehicles for a distributor such as Conrad are PR, e-newsletters, the website, advertising and mailings.
Question 6: Is eProcurement the most popular way for customers to order and track goods or is phone ordering in B2B still popular? What are the key requirements to make an eProcurement system effective and easy to use?
Holger Ruban: eProcurement is becoming the customer preference – this is Conrad’s experience. There are still some very traditional customers who prefer print catalogues, phone conversations or even fax orders and some very automation friendly customers who are quickly transitioning to more machine automated forms of ordering such as online shops, web-portal access, punch-out catalogues, and various other e-procurement solutions. In these times of fast evolving communications technology, offering customers multi-channel ordering possibilities is crucial.
Question 7: An effective, informative and easy-to-use website is critical. What are your comments regarding how a distributor’s website should look, feel and operate?
Melanie Lauer: A huge product range implies the necessity of a very good search engine which many distributors have had an issue with for several reasons. To support the usability and keep the product finding process fast, selectors play a quite important role. Especially when it comes to components, support for the identification of the product that is the most suitable for the customer’s needs is essential.
Our websites offer many products finders for nearly all segments and we are continuously improving our product filters that help to limit the number of matches and improve the speed from product search to product order. We are investing a lot of time in the optimisation of our navigation by monitoring heat maps, search behaviour, competitor websites, product relevance and of course personal customer feedback.
Question 8: Is it important to offer compatibility with mobile device formats such as iPad?
Melanie Lauer: As distributors are minimising the production of catalogues in accordance with demand for them and for environmental reasons, compatibility with mobile devices becomes ever more important. Replacing the catalogue means giving people another chance of access to the product portfolio. The best solutions are mobile device formats since almost everybody owns a mobile device enabling them to browse for certain products, bookmark preferred items and to share them afterwards for example with the purchasing department and/ or to add them to the shopping cart.
Question 9: Is rich media (video) of importance or relevance to component distributors to communicate information about products they offer to B2B customers?
Shawn Silberthorn: Videos are a very effective way to increase customer understanding of the products independent of technical data sheets and – in a second step – to increase sales and customer loyality. Of course a user can find all those videos on YouTube and other portals, but it is more effective to keep the visitor on the page rather than linking them away. Conrad has already placed product videos on various product detail pages, but as there is a total range of over 400,000 parts, adding rich media to a significant number of product pages has to be a gradual but progressive process.