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Answering your FAQs about construction e-commerce

Denise Castillo June 14, 2020

The construction industry is at a crossroads: stick to the status quo and hope today’s traditional approach maintains its staying power or adopt digital and evolve with the times.

Many construction firms remain planted in a traditional mindset, while others are making moves toward digitization and e-commerce. But investing in e-commerce isn’t worthwhile (or profitable) if you’re executing without vision or a long-term plan. You must be strategic to avoid falling among the many e-commerce projects that fail. Disruption in 2020, due to the COVID-19 pandemic, has made digitizing even more crucial.

And with the global construction market estimated to be worth over $1 trillion by 2030, there’s a massive amount of revenue up for grabs, if you can approach digitization the right way.

We’ve rounded up your most common questions about construction e-commerce; here are our answers.

1. We’re still selling traditionally, and not having major issues. Is construction e-commerce really necessary?

Right now, construction e-commerce may not be a vital means of survival for your business – but it will be. Traditional ways of doing business may still be proving to be effective, yet threats are on the horizon. Digitization is taking over; it’s making competition between construction firms tougher and resulting in more demanding customers. Your buyers, just like retail shoppers, want fast, efficient, 24/7 service without a hassle. How are you handling changes in the way you do business in 2020?

There’s also a labor shortage that can’t be ignored, and that is giving way to productivity concerns. It’s estimated that 15 million construction workers will retire or leave the industry within the next decade. This means businesses need to be both more lean and more agile; they must do the same amount of work (or more), just as well (or better), with fewer resources.

E-commerce, and particularly integrated e-commerce, is the solution. You may not be risking profits yet, but it’ll pay to get started early and invest in e-commerce now, so you’re not behind when it becomes a must-have part of business strategies across the industry.

2. We already have a web store. Why should we invest more in construction e-commerce?

Here’s the reality: a first-generation web store won’t suffice for long. It’s a good start, but the key to mastering e-commerce is to continue to invest, improve, and innovate.

  • Do your customers want the same things they wanted when your web store went live?
  • Are there features they want that you’re not offering (and perhaps, your competitors are)?
  • Are you taking full advantage of the functionality you could be offering online?
  • Could your web store be better, faster, more user-friendly, or more customer-centric?

If the questions above made you second guess the quality of your web store, you’re probably due for an upgrade. Read our follow-up blog to learn how to get your construction supply business 2021-ready.

3. Additive manufacturing is disrupting our industry. How can e-commerce help?

By combining architecture, design, and robotics, additive manufacturing is paving the way for better and more accurate prototyping. There is potential to even use additive manufacturing (3D printing) to create spare parts on-demand, eliminating the need to use inventory space and easing concerns around running out of product stock.

While there isn’t currently a direct link between using additive manufacturing and impacting your e-commerce experience, additive manufacturing can help relieve issues with product availability: information which you can then reflect in your web store to drive more purchases. With the option to pad your product inventory with additive manufacturing, you’ll be prepared to sell whenever your customers are ready to buy (even if your product is out-of-stock).

4. Our customers’ biggest concern is our speed of delivery. How can we address this with a web store?

Integrated e-commerce allows for faster transactions, easier ordering, more reliable shipping (that can be tracked), and a more efficient order fulfillment process overall. This means your B2B buyers spend less time worrying about checking in on their orders: maximizing their efficiency.

With your ERP, you can offer real-time product information, shipping calculations, and more relevant information needed to close sales faster. If a change needs to be made to an order, an integrated e-commerce approach allows you to update and modify the delivery logistics of an order. You can also pull data from your ERP to change your web store as needed (such as, by adding new functionality), which allows you to keep up as your customers’ demands change.

5. Investing in e-commerce is a major spend. If we choose to follow through, how can we contain costs?

With so many players in the supply chain, there is always a question of how to cut down on costs, and where. The first opportunity lies in the way you sell; e-commerce allows for easier direct-to-consumer sales, thus allowing for cost-savings and a shorter order fulfillment cycle.

Another opportunity lies in boosting efficiency by minimizing manual tasks; e-commerce lets your buyers pay and manage invoices online, which gets rid of the traditional paper trail altogether. According to Construction Executive, this could also result in the construction industry “netting millions of dollars in savings per year.”

6. How can we use construction e-commerce to integrate processes?

Sharing data across an organization with integrated e-commerce can make a world of difference when it comes to productivity. By making your ERP the hub for your e-commerce data, your data can be shared across your organization: streamlining project management, boosting efficiency and profitability, and minimizing budget overruns.

Some more specific possibilities with e-commerce include digitizing processes for “templates for managing subcontractor agreements, filling out work orders, change orders, timesheets, project punch lists, inventory, invoices and more – all of which can be accessed from a single platform and tailored to a firm’s specific needs.”

7. BIM is a major trend in the industry at the moment. How — if at all — can BIM and e-commerce work together?

While Building Information Modeling (BIM) and e-commerce aren’t necessarily interconnected approaches, they can work incongruence. BIM can help your internal teams be more precise about what materials building they need, which means you can order goods faster, be more cost-effective, and minimize the need to return-to-vendor (RTV) due to over-ordering.

Even more promising, 82% of BIM users see positive ROI and an additional 25% note improvement in labor productivity.

For firms selling beyond the United States, BIM should definitely be on your radar. Use of Building Information Modeling platforms is used extensively worldwide and is even recommended or required in some regions.

8. What industry-specific benefits would integrated e-commerce with Sana Commerce offer?

While we’ve touched on a few potential advantages already, here are some more potential benefits to executing your construction e-commerce strategy with Sana Commerce:

  1. Stop inventory blocking: In the construction industry, you always run the risk that customers may order all your remaining inventory, leaving you out of stock for other possibly higher-tier customers. Sana Commerce can prevent that by setting up different tiers of customers that would only allow the higher tier customers to order when stock is low (whereas more low-end tier customers would need approval from customer service before the order is finalized).
  2. Manage the complexity of different user roles: With a large and complex hierarchy of teams within your organization, it may be challenging to manage the internal approval process for orders. Within Sana, user roles can be set up to allow you to manage this process more easily.
  3. Offer tier-pricing and volume discounts; allow clients to pay invoices online: With a Sana web store, you can use the existing data in your ERP to enrich your e-commerce experience. More specifically, you can offer volume pricing to offer discounts to customers ordering in bulk, and provide tier-pricing to lower costs for your top customers. You can also enable your clients to manage and pay invoices from your web store. This is all made simple because the right data is already in your ERP and available in your web store.

Bonus: See construction e-commerce with Sana Commerce in action

Want even more insight? Read our Construction Industry Trend Report.

 

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