Not too long ago, catalog distributors were focused first and foremost on printing the latest and greatest version of their catalogs and delivering them to the desks of design engineers around the world. But as technology has changed and business cycles have accelerated, these distributors are focused less on the catalogs themselves and more on developing their company’s brand as a comprehensive resource for design engineers and purchasing managers around the world.
For evidence, look at some of the steps Mouser Electronics and others have taken recently to build out their resources and enhance their customers’ overall experience. Faster and more detailed online versions of their print catalogs are par for the course as they add new purchasing tools, mobile applications, technical resources, and microsites to deliver an even better user experience.
But the offerings aren’t just online, as many companies continue to add offices and even people to build that better experience and expand to new regions of the world. Such efforts reflect a growing need to help customers sift through the vast amount of information available to them today and deliver it in a way that makes it easier for them to get the job done faster. At Mouser, this means heavy online investments and a continued focus on new product introductions.
“Really, we’ve turned into a catalog company and a marketing company,” says Kevin Hess, vice president of technical marketing for Mouser, emphasizing the distributor’s role as an information provider and technical resource to customers. “We’re saying, let’s educate customers. Let’s not just be a place to buy products.”
Other catalog houses are saying the same things as they look for new ways to compete on a global scale. Some are focused on leveraging their strength as educational resources and online communities, while others are spreading their wings to reach new and different audiences. No matter what their particular approach, the main goal is to build their brand as a go-to place for products, information, and assistance—a far cry from the paper catalog and bank of customer service reps that served as their key tools to market just 10 years ago.
From Source To Resource
Mouser has long billed itself as the source for new products, and the company continues its investment into new product introductions and complementary marketing programs. As Hess explains, it’s a service that has key advantages on both ends of the supply chain—manufacturers get their newest solutions to market faster and customers uncover the most cutting-edge technology for today’s fast-moving design process. In 2011, 26% of Mouser’s product sales were in new products.
“We realize that’s a tremendous value to our suppliers,” says Hess.
To that end, Mouser is focused on two key points: getting new products to market faster and enhancing the product launch. Marketing plays a key role in both areas, so the distributor works closely with suppliers on new programs that gauge which of their products are most important to which key markets. Such programs play into the company’s technical marketing niche, which serves as a launching pad for its expanded role as information provider.
Mouser is set to launch 13 new application- or technology-specific microsites this year—sites that provide a wide range of information on specific areas such as solar energy, medical, lighting, and energy harvesting. The sites feature expert articles, white papers, tech sheets, videos, and the like—everything customers need to get a better understanding of the technology and how it relates to them and their business.
“It’s not just a place to go and see a list of parts,” explains Hess. “We’re saying, let’s educate engineers. We understand they don’t have time [to sift through all of the information] out there. The microsites we build are designed to give customers a quick overview and then they can click through to more information.”
Such efforts play into the drive to go from a source of products to an information resource—a trend Hess and others say shows no signs of slowing.
“We need to have inventory on the shelf, deliver the best experience on our Web site, make sure customers get the parts when promised, and provide top-notch customer service,” he explains. “The technical support piece is huge. We need to be a resource for customers.”
Texas-based Mouser is also taking that message to a wider global audience these days. Following major expansion in Europe last year, the distributor has enhanced its presence in China by incorporating in the country and putting about 50 people in place to provide marketing and customer support to its growing audience of local design engineers and purchasers. More than 80,000 people visited Mouser’s China Web site in April alone.
“Having experts within the countries [we operate]—that’s really been a focus for us,” says Hess, pointing to the growing need for marketing and technical support in particular. “We can’t do all of it from Texas.”
For another pointed example of the catalog distributor’s evolution from components distributor to solutions provider, look at element14. The company is still in the midst of a rebranding campaign, tying its Premier Farnell and Newark brands into the element14 label globally. Parent company Premier Farnell owns and operates element14, introducing the brand as an online community for design engineers in 2009 with the intention of going to market as element14 globally. The company already goes to market solely as element14 in Asia Pacific, and it is slowly making the change elsewhere. A large part of the effort is bringing all of its resources under one roof to provide customers with everything they need from research on through to prototyping and production.
“The solutions piece is very important to us,” says Quintin Komaromy, head of marketing for element14, pointing to recently launched software programs, computer-aided design (CAD) tools, and new printed-circuit board (PCB) tools on the element14 community. The new services help to round out traditional offerings that include technical support and the Knode, an online design service introduced last year.
“Our concept is to provide the tools and data to help customers easily select components and software for any new technology,” Komaromy adds. “This requires greater insight into what customers are looking for—and a greater depth of data that is easy to find.”
The social aspect of element14 helps provide insight into what customers want. Company leaders say the element14 community is just shy of 100,000 users globally, and it’s gaining traction as a place design engineers can go for expert advice, peer networking, and access to a wide variety of information. In addition to technical tools and social networking services, the site provides industry news and information on its legislation pages.
The distributor has become a thought leader in legislation—especially in Europe, where the Restrictions on Hazardous Substances (RoHS) and the Registration, Evaluation, Authorization and restriction of Chemicals (REACH) legislation has had a considerable impact on the electronics supply chain.
Komaromy points to RoHS as the springboard for the company’s leap into the resources and solutions realm. Premier Farnell worked hard to position itself as an expert on the subject, and today it counts U.K.-based head of legislation and compliance Gary Nevison as a key resource. Nevison provides regular legislative updates on the element14 site on everything from RoHS to the newly developing conflict minerals legislation in the United States. He also represents the company on several industry- and government-related task forces.
“This is really where it all started,” says Komaromy. “We wanted to be positioned as an expert on this subject because it’s another piece of information engineers need to do their jobs.”
From Prototype To Production
For many, the word “catalog” conjures up the image of a four-inch-thick, yellow-pages-like book. And although distributors have supplemented print catalogs with high-tech electronic versions, the term “catalog distributor” may not be as accurate a description as it was 10 years ago. This is probably most applicable to Digi-Key, the first and so far only catalog house to stop printing its mammoth catalog.
Digi-Key has long been focused on building its Internet business, and it goes to market with virtually no feet on the street, supporting customers with a network of in-house customer service representatives and delivering products from a single warehouse in Thief River Falls, Minn. The company stopped printing its catalog in the spring of 2011, to the surprise of many industry watchers but in response to customer criticism over the environmental impact of printing such a large book, says Digi-Key president Mark Larson. More than a year later, Larson says Digi-Key stands by its decision, which he says has had little negative impact on the company.
“We’re not looking back on it,” says Larson. “We think it was the right move from an environmental standpoint as well as a business standpoint.”
Despite the change, Digi-Key isn’t all “virtual.” Recently, the company has embarked on a growth strategy in Europe aimed at building its production business—an effort that requires the addition of physical locations and people. Long focused on the design engineering community, Digi-Key started to build an infrastructure to support the high-volume production side of the business in the 1990s, and the company continues to build on that model, with particular focus on Europe and Asia. Larson says it’s a challenge, but he points to the $500 million in production business Digi-Key does today (out of the company’s $1.5 billion in total global sales) as motivation to build on that model for the future.
“This is a model that is quite unique in the industry,” says Larson. “When we started building this hybrid model, we realized quickly that it would be a long process. Now, we’re seeing the culmination of a lot of hard work. We’ve got 350 people (out of 2500 total employees) focused on the production-side of the business.”
The company’s move to become less virtual is a direct response to production customers, who require more of a brick-and-mortar, personal touch type of service.
“We’re adding people, offices, and infrastructure to support production buyers,” says Larson, adding that the greatest challenge to building this business is perception. “Digi-Key is fairly universally perceived to be a great place, sometimes the best place, to get engineering quantities. But we’re not so well-known on the production side. A lot of the purchasing community in North America understands [our ability to serve production business], but customers outside of North America have not experienced this. So our single biggest challenge is overcoming this perception.”
Doing so will play into Digi-Key’s mission to become a “totally integrated distributor”—one that provides everything customers need from prototype to production.
“This is how we refer to ourselves—as a totally integrated distributor,” adds Larson. “This differentiates us from other catalog distributors.”
And it is yet another way catalog distributors are growing beyond their traditional roots.