Bishop & Associates’ 2011 Customer Survey of the
Electronic Distribution Industry



 A great website could be a key part of being a great business.
Customers tell us what they think about their online experience with top distribution companies.

By Lou Lipomi, Bishop & Associates Inc.

During a discussion at the Electronics Distribution Show (EDS) in 1996, I mentioned to a colleague that I had found a website that sold books and that I was really impressed with their customer service and proactive marketing. They had sent me an e-mail confirmation as soon as I placed an order and sent another when they shipped the book. I had even received follow-up inquiries about their service and suggestions about other books I might be interested in. And, believe it or not, they had actually sent me a T-shirt and a coffee mug for Christmas. I told him to check it out for himself. I said that it might be interesting for someone to try a similar approach to selling electronic components. And he said it would never work!

The online bookseller was, of course, Amazon.com. It may seem like they’ve been around forever, and for many of our younger readers, they have been around forever, but they were founded in 1994 and launched their site in July 1995. Their service levels have set a standard for all e-businesses; they exceeded $34 billion in sales in 2010. and have an estimated market cap of $105 billion. As for the guy who said it would never work for electronic components, his company was a very late adopter of online retailing, fell behind the competition, and was forced to sell out when, ironically, the dot-com bubble burst in 2001. As for me, I can’t find the Amazon coffee mug, but I still have the T-shirt!

The Internet, of course, quickly became the must-have tool for every business. It also became a breeding ground for startups seeking to replace traditional brick-and-mortar businesses. Amazon is the best and arguably the most successful example of this model. Just as the national bookstore chains like Barnes & Noble, Borders, and Crown were forcing the local book shops out of business, Amazon came along and started pushing them down that same road.

Unlike my colleague at EDS, most electronics distributors quickly realized the necessity of having a viable website. Not everyone knew exactly what they wanted their website to do, but everyone knew that they didn’t want to deal with an Amazon-like competitor. Distributors also recognized another potential threat posed by the web. If customers had easy access to product information and availability, they could work directly with suppliers, perhaps utilizing logistics providers like UPS or FedEx, and eliminate distributors from the supply chain. Fear of what quickly became known as “disintermediation” provided even greater motivation to develop customer-friendly sites that provided focused access to the products and services that the established distributors had historically provided.

The good news is that it worked. Distributors built robust sites and continued to improve them. Their quick adoption, combined with their inventory, sales, and logistics support allowed them to keep the interlopers out and avoid the “disintermediation” that they so feared. You could argue that the catalog houses like Digi-Key and Mouser became the Amazons of the components distribution business. The catalog distributors have indeed now become online distributors, but they all existed prior to the web. If Borders and Crown had recognized the threat and reacted as quickly as the distributors did, Amazon may have gone the way of eToys.

Today, distributors continue to improve their websites, offering interactive training tools, advanced product search functions, social networking links, and numerous other innovations. In the 2011 Bishop Customer Survey of the Electronics Distribution Industry, however, websites were ranked as only the seventh most important criteria in choosing a distributor.

The Most Important Criteria for Selecting a Distributor

Is it possible that the efforts that saved the electronics distribution industry are now considered less important than the generic “Ease of Doing Business” category? The survey concluded that robust websites are now an expected part of the overall package — a “given.” As such, a website’s performance can be compared with other “givens,” such as quality and service. Customers may not rank them very highly on surveys, but just try to do business without them.

For the second consecutive year, Digi-Key was ranked the number one website overall.

Top 10 Distributors Based on Website Evaluation

Not surprisingly, catalog distributors held the top four spots in the overall ranking. Farnell and RS Components were also in the top 10. Each of the companies in the top 10 improved their scores from last year. Arrow Electronics, which has focused on website improvement, was ranked eleventh this year, just out of the top 10, but up two places from last year. Their score improved from 4.104 to 4.258. The average website score for the 27 distributors ranked this year improved by 19.6%, going from 4.434 to 4.521. This is a further indication of the effort that distributors are putting into website improvement.

As the following chart indicates, engineers are the most difficult group to please when it comes to website performance. 

 Evaluations by Job Function

Of the two major job functions rating distributor websites, purchasers gave higher than average scores and engineers gave lower than average scores. The indication is that purchasers, who are more concerned with finding and ordering parts, are relatively more satisfied with the improvement in website functionality than engineers who are apparently in search of more improvement in the quality and availability of technical information. The two exceptions to this result are Digi-Key and Mouser, both of whom were ranked higher by engineers than by buyers.

Responses to questions regarding individual aspects of the websites did not vary dramatically from the overall rankings, but the subtle differences do indicate how precisely the responders analyze each aspect of a site’s performance.

Ease of Finding Components on the Website

Allied Electronics, which was ranked third overall, drops to sixth in the category of ease of finding components. Master Distributors, which ranks sixteenth overall, ranks eighth in this area. Farnell, which ranked ninth overall, fell out of the top 10, but by just one position to eleventh.

Quality of Technical Documentation on the Website

Power & Signal, which has the highest overall ranking of any non-catalog distributor, posted its highest score in the Quality of Technical Documentation area. Clearly, their focus on providing a limited product offering — connectors — to a focused customer base — transportation — gives them the opportunity to provide excellent in-depth technical information. They have obviously taken advantage of the opportunity and developed an excellent site.

Ease of Order Placement on the Website

The 2010 Bishop Survey indicated that the ability to place online orders was not considered to be an important criterion by many responders. The distributors most concerned with having this ability are the catalog distributors, and not surprisingly, they all scored very well in this area. Beyond Components launched their “Shopping Center” feature in 2010, and as a result, moved into the top 10 in this category.

As stated earlier, a good website is a given. A great website, however, can still be a differentiator. Customers are obviously tuned into the details of each site and it is a safe assumption that they reward their favorite sites with a majority of their orders. Based on the varying results in the individual categories, there is an opportunity for distributors to learn from the best in class, and if history is an indicator, they will do just that.

We’ll continue to review the results of the 2011 survey in upcoming issues of Connector Supplier.

For more information regarding this survey, contact Lou Lipomi or click here.

No part of this article may be used without the permission of Bishop & Associates Inc.

Lou Lipomi, Managing Director—Distribution Research, Bishop & Associates Inc. Lou Lipomi joined Bishop & Associates Inc. in 2010. As the managing director, he has established a new division for Bishop & Associates focused on the connector distribution channel. Lou has more than 25 years of sales and marketing experience in the interconnect industry. He began his career as a salesperson for a local electronics distributor in Cleveland, Ohio, and has held sales and marketing positions for Amphenol, Burndy, Berg, and FCI. Lou has had direct responsibility for distribution programs at the local, regional, national, and global levels. Lou can be reached at llipomi@bishopinc.com.