Sears, once America's dominant retailer, had all the makings to become what Amazon is today. With a massive customer base, a vast distribution network, and enormous clout with vendors, Sears had the opportunity to dominate e-commerce. Instead, Sears missed the mark, and the company eventually filed for bankruptcy. This cautionary tale serves as a stark warning for chemical distribution company CEOs today.
In 1997, Sears CEO Arthur Martinez was advised to rethink his business due to the advent of e-commerce and the potential to position Sears as a digital marketplace for home repairs. Martinez dismissed these ideas, confident that Sears would thrive for the foreseeable future. However, "foreseeable" turned out to be only a few years, as Sears struggled and eventually filed for bankruptcy protection, ultimately closing it’s doors in 2019.
The rise of digital marketplaces like Knowde, backed by deep-pocketed Silicon Valley investments, aims to do one thing to chemical distributors: take their market share. Yet, many chemical distribution CEOs and executives I’ve spoken with over the last two to three years exhibits the same “Albert Martinez” failure to see what’s right in front of them. These very smart execs believe a digital marketplace cannot replace them, cannot take their market share. At HEXNET, we know that they WILL take market share, and many chemical distributors will ultimately lose so much they will be forced to go out of business or sell.
The Digital Threat: A Trojan Horse
One of the main arguments from chemical distributors is that their technical expertise and relationships cannot be replaced by digital platforms. This is reminiscent of Sears' failure to capitalize on its early e-commerce initiatives. Sears.com was ahead of its time with features like in-store pickup and virtual models for trying on clothes. However, Sears' failure to invest in its digital infrastructure and maintain its customer base led to its decline.
Have you heard the buzzword PIM lately?
Product Information Management systems are at the heart of these marketplaces. Why are all these marketplaces so interested in your product data? Think about it! Why would you give these marketplace Trojan Horses your product data?
Protecting Your Market Share
Chemical distributors must recognize the strategic value of their data and relationships. By providing this data to digital marketplaces, they are arming their future competitors. The only way chemical distributors can delay the growth of these marketplaces is to build their own digital platform and make the strategic decision not to support any marketplaces whose business model is to transact chemicals digitally.
Building Your Digital Defense
HEXNET has been working with chemical distributors for 20 years, assisting in growing their sales and maintaining their market share. We have zero interest in transacting chemicals and taking market share away from our clients. Instead, we empower them with the tools and strategies they need to thrive in the digital age.
Here are steps chemical distributors should take:
- Invest in Your Digital Infrastructure:
Build a robust digital platform that showcases your technical expertise and product offerings. Ensure it is optimized for SEO to attract and convert customers.
- Protect Your Data:
Be cautious about sharing your product data with digital marketplaces. Understand the long-term implications of these relationships.
- Focus on Customer Relationships:
Leverage your existing relationships to offer personalized services that digital marketplaces cannot replicate.
- Stay Informed:
Keep abreast of digital trends and innovations in the chemical distribution industry. Adapt your strategies accordingly.
Conclusion
The future of chemical distribution is digital. CEOs and executives must avoid the Albert Martinez mistake of ignoring the transformative potential of e-commerce. By proactively building their own digital platforms and protecting their valuable data, chemical distributors can safeguard their market share and continue to thrive. At HEXNET, we are here to support you in this journey, providing the expertise and tools needed to navigate the digital landscape successfully.
Don’t let history repeat itself.
Take action now to secure your company’s future.
Schedule a strategy session with HEXNET today and discover how we can help you build a resilient, future-proof digital presence.
