October 03, 2009

Grainger.com Case Study

Company Profile

W W Grainger is a leading distributer and supplier of day to day operating, maintenance, and repair for industrial and institutional use across the Globe. According to Hoovers.com, the first office started in 1927 and now it has more than 400 offices and showrooms in North America. According to the latest financial report (2008 Annual), the company has exceeded the expected performance even in economic downtimes. This shows that they have a robust business model and provide high customer value. The history of Grainger indicates that they are early adaptors of technology and give a high value to customer satisfaction. According to Gardner 2000, grainger.com was launched in 1995; which is too early for an industry in which Grainger is into. According to Gardner 2000, they started their first online sales in 1999 when they launched two other websites orderzone.com and findmro.com . These are some of the major steps taken by Grainger to understand the importance of e-Commerce and B2B eMarketing.

Marketing Mix and Services

Offline vs Online

Grainger has successfully balanced its offline and online services using and effective strategy targeted towards customer value. Being the early adaptor of IT infrastructure and internet it has gained a competitive advantage over its competitors.  This has also helped them to reduce the operating cost and enabled them to earn higher profit margins. According to Anderson et al. 1998, Grainer identified that procurement and ordering of goods was very complex for big organizations and involved high cost. So they established a Grainger established a consulting company to help their customers to reduce cost and build a loyal and trustworthy relationship. These services are provided for free for limited number of large clients. Now using internet the same service is provided to all their customers depending on the size and complexity of the system through various online solutions on orderzone.com. They also provide online help for specific needs like cleaning dirt, air conditioning, flood control and many more.

Figure 1: Online help for specific needs
Screen shots from: http://www.grainger.com (Accessed: April 2, 2009)
Services
To extend the above mentioned services they also provide online Procurement Solutions, Inventory Management Solutions and e-Commerce integration. This helps them to earn revenue on the services and on the other hand reduce time and money of procurement and ordering for their clients. As these applications are integrated it helps in forecasting the demand of the goods that might be required.
Major online Service include online searching and buying of goods. They have a brochure model for their main website. It is easy to find any item that they have just by few clicks or by keyword search. Customers can browse items on the basis of name or manufacturing company or by category. Another easy way for regular customers is to do quick order by just entering the item code and quantity. This is just 2 step process.


Figure 2: Search of Items and Quick Order
Source: Screenshot from http://www.grainger.com (Accessed: April 2, 2009)
This makes it extremely easy for customers to find and order goods. They accept major credit cards online and also support corporate accounts which can be billed at later stage.
Another important thing is the login form for their customers. No matter where you are on the website it will always be on the left top of the page to log into the system any time. This is one of the most effective ways to encourage customers to log into the system and browse accordingly.

Figure 3 : Login form
Source: Screenshot from http://www.grainger.com (Accessed: April 2, 2009)

The services that they offer are not only for large business customers but also for small business customers. They have a separate section for small customers with solutions specifically for small business on grainger.com and supplylink.com.

Figure 4: Section for Small business on supplylink.com

Online Articles and Expert Comment
Apart from the above services and mini help, they also have a news letter which they send my email regularly. This is for their customers and for anyone who signs up for the newsletter. The newsletter provides information about new products, current trends in the industry, information regarding various webinar, solutions specific to industry.



Figure 5: Newsletter of Grainger
Source: Email sent to me after subscribing to Grainger's e-Newsletter
These services don't end here. They launched a whole new website to share the knowledge they have gained over years of experience. Here organizations can browse articles on the basis of their industry segment to find the latest trend in the industry, new technology development and many others. They also post seasonal articles like preparing for flood, hurricane or snow.

Figure 6: Screen shot of supplylink.com

This is one of the ways to show that they are expert in the domain they are and small and big organizations can rely on them.

Brochure Model Website

Traditional Catalog/Brochure


They have a massive booklet for the list of products that they offer. Usually people who don’t have access to internet use the catalog to find the goods they need. But not all products are listed in the booklet. They came up with a different model to improve it. They keep track of the orders that they receive online and offline channels. If the item is being ordered many times and is not present in the catalog they add it in the upcoming catalog. Effective integration of all their offline stores and online website enables them to effectively track such items and add them in catalog.
As mentioned in the previous section, searching on grainger.com is extremely user-friendly and easily accessible. After searching for a specific category they provide a list of items for that category and brief information about each.



Figure 7: Search results on grainger.com

It also allows comparing the features with similar articles. This helps a new or small organization to evaluate different products as per need and the budget.


Figure 8: Price and Feature comparison on grainger.com

And to mention again go to any screen and you find the login form on the left top of the screen.
On selecting a particular item it gives huge information of technical and feature set information for the product. This information include a brief description of the product, technical specification, Notes and Restriction, Material Safety Datasheet, Accessories, available repair parts and the best one is the alternate product for the item.


Figure 9: Available information for an item.
Source: Screenshot from http://www.grainger.com (Accessed: April 2, 2009)

Information like safety datasheet saves the time for searching the safety norms for the product. Information such as alternate product and related products gives the organization / customer a broader perspective of the goods available in the market and comparison. And at any point of time it can be compared with other products of the category using the Compare alternative feature.
Thus they have maintained their offline catalog with limited information and items but the online brochure website gives detailed information of any item at few mousetips.

Alignment with Business Goals

From the case it can be found that their goal is to increase the market share by targeting high-potential customers and improving the inefficient channels.
Services like supplylink.com and news articles give the prospective customers a sense of reliability and trust about W W Grainger. It also proves their domain expertise and thus attracting more customers. Other services that effectively reduce the cost and time retain the loyalty and increase the market share through new customers.
IT and internet has played a major role in doing so. Early technology adaption like use of Oracle, SAP, early online selling and e-Commerce has given them a competitive advantage in B2B eMarketing.
This has been shown by a combined ad of SAP and Grainger.
http://www.secondcitycommunications.com/grainger.html

Sources
1. Anderson J, James A. Narus 1998, Business Marketing: Understand What Customers Value Harvard Business Review Reprint 98601
URL : http://www.grafitto.com/private/Harvard%20Business%20Review/Miscellaneous/Harvard%20Business%20Review%20-%20Understanding%20What%20Customers%20Value-Article.pdf
2. http://premium.hoovers.com.ezproxy.rit.edu/subscribe/co/overview.xhtml?ID=ffffrrhsyffhrfycsc
3. Elizabeth Gardner. 2000. A supermiddleman. Internet World, January 15, 28-30. http://www.proquest.com.ezproxy.rit.edu/ (accessed April 2, 2009).
4. http://www.secondcitycommunications.com/grainger.html
5. W.W. Grainger, Inc.; Grainger Launches Its 2009 Catalog, Features Broadest Product Offering in Company's 82 Year History. 2009. Science Letter, February 24, 4258. http://www.proquest.com.ezproxy.rit.edu/ (accessed April 2, 2009).
6. http://library.corporate-ir.net/library/76/767/76754/items/328476/7BC6109A-2C4F-4B8D-8B15-8C813668BCD9_GWW_Chairman_Highlight.pdf

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