Component Distributors Show Amazon a Thing or Two about Customer Service

Online retailer Amazon may seem unstoppable, but when it comes to the distribution of electronic components, it’s the incumbents who are upping the standard for customer service. And they’re going way beyond basic pricing and delivery information.

Work in the Fort Worth, Texas, area and need your connector now? Allied Electronics will deliver your order within six hours for a flat fee of $35.

Have a technical question you need an answer to right away? Digi-Key, Mouser, Newark element14, and others offer online chat capabilities.

Want to better manage the risk in your designs? Mouser’s new Intelligent BOM tool, called FORTE, analyzes design risk indicators and makes recommendations on alternative products that can reduce design and product lifecycle risks.

Two years ago, when Amazon entered the electronic components distribution business, it put the industry on notice as a competitor to watch, given its reputation for providing outstanding customer service.

“Obviously, they set the tone for customer experience that everyone strives for,” says Jeff Mills, who recently held the position Head of Marketing, Americas at Newark element14. “It’s a company to keep watching, as they are always doing things we can learn from.”   

Whether Amazon can take that to the bank in this market remains a question. The online giant did not respond for requests for an interview. But distributors we spoke with shrugged at the idea that the online giant has made any measurable dent in their business.

That’s perhaps not surprising, given the size of the market for global electronic component distribution through franchised sources is huge—industry insiders put it at around $30 billion.

Moreover, the incumbent distributors continue to up their own game on customer service, enabled by insights generated from the virtual goldmine of data and metrics gleaned from their websites, which in some cases generate tens of millions of page views per month.

For example, realizing that users searching for a particular component frequently do not recall the entire part number, Mouser has built a special algorithm that will make intelligent part suggestions based on only a partial number.

Mouser is also exploring more and better ways to assist customers in completing the BOM (bill of materials) process faster and more accurately. Some of the capabilities of its FORTE tool include remembering a user’s preferences and the ability to order parts directly from the BOM.

Dan Stewart, VP of E-Commerce at Allied Electronics, says his company has a relentless focus on creating a fantastic experience for its customers. To that end, customers are asked to share feedback within seven days of placing an order.

“It’s that robust voice of the customer that guides our business strategy, and it’s their feedback—good and bad—that goes into our thinking about new features and capabilities we can build to make the customer experience seamless and easy,” he said.

Digi-Key, Newark element14, and others offer a “compare parts” function that allows users to generate a table that provides pricing and availability details on an entire set or subset of parts within a product category.

Channeling Amazon, Newark element14 presents parts that “customers also viewed” when a user is looking at a specific part. And TTI’s “part detail” pages have “Find Similar” functionality built into them, making it easy to find parts with similar characteristics.

There’s no shortage of new things they are thinking about. But there are some things distributors probably won’t be doing—like making recommendations to customers on what parts to add to an already existing order.

“Maybe it works well for Amazon, but our customers buy from us in such different ways, that I doubt we would ever be able to look at what one person puts in the cart and extrapolate that to anyone else,” says Kevin Hess, Senior VP Marketing at Mouser. “Not everyone is going to add a power cord to their order; we’re focusing on how we can create value through the features we add and create a better customer experience.”

Stewart agrees that Allied errs on the side of caution in what communications customers receive and that every consumer marketing tactic won’t necessarily work for a professional audience of engineers and supply chain professionals—some could even backfire.

A case in point: Stewart says Allied would never send a message telling engineering that they forgot to complete an order, because many are simply waiting for a PO to go through.