Building An E-Business: A Case Study for the Coatings Industry
Business-to-business electronic commerce is still in its infancy in the coatings marketplace, but companies are becoming acutely aware of the tremendous growth opportunities that lie ahead. According to Forrester Research, the business-to-business e-commerce market is expected to grow from $43 billion in 1998 to more than $1.3 trillion by 2003.
PPG Industries, Pittsburgh, has moved to the forefront of the Internet revolution with the launch of OneSource Coatings™ (www.onesourcecoatings.com), the first e-business to offer liquid and powder coatings, pretreatment products, and supplies to the industrial coatings marketplace.
The Mission Behind the BusinessThe business mission of OneSource Coatings was founded upon months of PPG market research, which indicated that small-lot industrial coatings customers constitute a large market. The small-lot marketplace includes medium and small manufacturers of industrial products (e.g., small compressors, weight lifting equipment, farm machinery), and coating job-shops that add the finishing touches to products manufactured by others. Given PPG’s role as one of the world’s largest producers of architectural, OEM and automotive refinish coatings, the small-lot market is one that the company had not directly targeted in the past.
Through this research, PPG also learned that many of these small-lot customers already go online for information and price comparisons, but that most weren’t buying online … they would do the research and then place their order by telephone. Yet purchasers in many other vertical industries are finding that the speed and convenience of ordering over the Internet is a real advantage for their business. In marketplaces such as chemicals, automotive and consumer goods, companies are reinventing the standard way of doing business by overcoming misconceptions and barriers to high-quality Internet sales and service. Through the Internet, customers can order products and receive answers to their questions at the most convenient time, and in the most convenient manner for them.
OneSource Coatings was launched in January 2000 as the culmination of this research and learning, all of which pointed toward a winning business strategy: the combination of cutting-edge Internet technology with premium telephone service and field technical support.
A Customer-Centric ApproachAlthough the Internet Age is still in its infancy, experience has shown that taking care of the customer means more than simply posting product catalogs and selling online. Customers and prospects expect highly responsive technical service and support. They want the right answers to their product and application questions, and they want them now … not when the customer service representative has a chance to give them a call back.
In order to provide customers with the right answers, OneSource Coatings provides an online library of product data sheets and material safety data sheets, as well as technical problem solving information to help troubleshoot paint defects and application difficulties. The website includes images of common coating defects so that users can determine and correct the cause of their product flaws.
In addition to e-commerce tools and comprehensive product and application information, the website offers other information to make the customer’s job easier like hotlinks to applicable environmental regulations and descriptions of best practices.
Certain customers may be unable or unwilling to use online service tools — that’s why a key component of the OneSource Coatings business strategy is to provide highly responsive telephone and field technical service capabilities. Customers have telephone access to OneSource sales and technical staff members 24 hours a day/seven days a week. Time and again, PPG’s experience in the coatings industry has proven the importance of round-the-clock service for today’s fast-paced production environment with its deadlines and extended hours of operation.
Fast order turnaround is another way OneSource helps its customers meet tight production deadlines. It promises two-business-day delivery within an eight-state Midwest region that includes Minnesota, Iowa, Missouri, Wisconsin, Illinois, Michigan, Indiana and Ohio. In the near future, this turnaround commitment will be broadened to service areas beyond the initial Midwest target market.
The Single-Source ConceptApart from the conveniences of online purchasing and premium customer service, the real value proposition behind OneSource Coatings is the comprehensive product and information resources provided on the website. By bringing a variety of products and services together on its website, OneSource provides customers with the advantage of one-stop shopping for all the supplies and equipment they need for their coatings process.
Given that the application of industrial coatings is a multi-step process requiring multiple products, OneSource provides value by developing and/or delivering all the products necessary for the various steps within the process, taking the hassle out of coatings procurement. In this scenario, small manufacturers and job shops no longer have to deal with different suppliers for coatings, pretreatment products and equipment; all of these products are available online at a single place, and OneSource is accountable for making sure they work well together.
The bottom line is that small-lot coaters can focus more on their business, and less on how to obtain the right coatings and equipment.
OneSource Coatings offers a range of robust coatings, which are made for the air drying or low-temperature curing methods used by smaller coating companies. The product offering includes the following.
- A new Icron™ line of solvent- and waterborne coatings in acrylic, alkyd, urethane and polyester technologies. Products are lead- and chrome-free, and available in 135 standard colors or custom matched to specification at no additional charge. Color matching is performed the same day as customer approval is received, ensuring two-day turnaround within the Midwest region.
- Envirocron® powder coatings in 185 colors in standard, textures and metallics.
- Pretreatment products including alkaline spray cleaners, immersion cleaners, iron phosphates and rinses.
- Coating supplies and sundries including safety and mixing equipment. Powder and liquid spray equipment will also be offered through partnerships with leading suppliers, such as Nordson and ITW/Binks.
Once a product is initially purchased online, the OneSource Coatings website has all the pertinent order data regarding the product and purchaser, making reordering online fast and simple.
Moving ForwardAlthough OneSource Coatings is still in the start-up stages, the business is already demonstrating success. This success has prompted the management team to expand the business by extending the two-day product turnaround on a national basis in the near future. They are also looking at ways to further broaden the existing product offering.
In addition, website functionality will continue to be enhanced. Most recently, an online diagnostic tool called the Coatings Wizard was added, which helps the user find the best coating product for their needs. By asking a series of questions, which serve to hone-in on the best product choices, this online tool not only helps potential customers find the most appropriate OneSource products, it enables current customers who are coating a new substrate to find the right OneSource product.