Independent retailers are notoriously hard for technology companies to reach. For one thing, they are a pretty disaggregated lot. Larger retailers tend to congregate at big trade shows and conferences, and those events provide tech firms with a relatively efficient way to reach a lot of potential customers (there is no better example of this than the annual NRF “Big Show ” in NYC every January). It’s not that the independent operators are prevented from participating – it’s usually just an issue of bandwidth; the independents are usually full-time occupied running their stores! And while there are organizations such as the North American Retail Hardware Association (NRHA) that provide forums for independents to meet with each other and vendors, it’s precious time taken away from the store. So even when they do attend a big trade show, independent retailers tend to focus on practical matters such as examining new products and meeting with vendor sales reps – not on technology.

Disaggregation is a constant challenge for the independents themselves, too. This is particularly true on the “buy-side ” of the business. Large chains can achieve tremendous economies of scale by aggregating demand and optimizing the supply-chain side of their businesses. By themselves, independents don’t have that luxury and as a consequence can be strategically disadvantaged by a higher cost-of-goods. But distribution companies can – and do – help the small independent operators compete on a more level playing field by aggregating demand and creating economies of scale on the buy-side. Companies like Sysco (in the restaurant & food services sector) and Orgill (independent hardware) do just exactly that.

Distributors like Sysco and Orgill also go far beyond just providing a cost-effective source for products; on request, they will provide any of a tremendous array of services that are intended to help the independents stay in business. Sysco for example will examine the independent’s operator’s P&L, or recommend ways to improve the menu and establish competitive retail prices, and even help with signage and restaurant layout ideas. Of course Sysco knows that if a restaurant fails, they’ve lost a customer – and so they will do a lot to keep the independent operators going. Orgill does the same thing for independent hardware store operators, with marketing, merchandising, and advertising support available for the asking.

Beyond the Buy-Side

Those additional services are useful, but the fundamental value that the distributors have historically delivered to independents is a competitive cost-of-goods, so that they can compete on price with the “big boys “. By providing one source for a wide array of products at low cost, Orgill makes it possible for the local hardware store to compete successfully with the Home Depot and Lowes that are battling it out on the edge of town, or even with e-marketplaces such as Amazon.

But wait a minute! RSR has been banging the drum that nowadays, supply chain mastery isn’t enough – nowadays consumers are using technology (particularly smart mobile consumer techs) to investigate and select solutions to their lifestyle problems before going to the store. How can independents hope to match the capabilities of the big retailers with their big IT and marketing budgets?

To get an answer to that question, I reached out to David Meany, the Vice President of E-Commerce at Orgill. At Orgill’s recent Fall’13 Dealer Market event in Boston, Meany and his team of technologists demonstrated three technology service offers intended to help independents remain competitive on the “sell side “, in this age of information-empowered consumers. Those products are called “Web Essentials ” (a simple-to-use service to help retailers develop a web page), “Boost ” (a website pre-populated with product info that the retailer can subscribe to, adding store-specific content and highlighting the independent store as a go-to fulfillment point), and “O Zone ” (a mobile app For iPhone And Android that lets dealers build product orders and offer assisted selling to customers).

The Orgill Technology Story

One hundred sixty-seven year old Orgill is one of America’s longest operating companies, and it is still family-owned. With $1.4B in revenue, it serves 7000 dealers (about 14,000 individual store locations) in 66 countries. At the Boston event (one of two dealer markets the company runs every year), about 3000 of those dealers attended. In Boston, owner Joe Orgill gave an example of the dedication that the company has to its customers – he was standing at the convention center bus stop to greet folks as they alighted from the bus to enter the dealer market. It’s that kind of “old fashioned ” personal touch that builds the strong loyalty that many Orgill customers have for the distributor.

Dave Meany and his team demonstrated the same level of commitment – I had the chance to observe “the whole gang ” demo-ing the new technology offerings, talking to dealers and answering their questions. Explained the technologist, “our job is to figure out ways we can put tools into dealer’s hands that they can use in the store for the end-customer’s benefit. We’ve provided the opportunity for those that are a little hesitant to go ahead and get a web presence with a fairly robust and nice looking tool (‘Web Essentials’), that gives them a presence on the web with SEO ( “search engine optimization “) so that they show up on local searches on the web. It allows them to tie in some DIY content and an electronic catalog so that people can understand what they sell. It’s self-administered, no technical help required, and we supply product graphics for the entire Orgill catalog, and other graphic content that they can use to brand their page. They can also tie in coupons, directions, and maps. “

David added, “Dealers also have the option to have a full-function and robust e-commerce site through ‘Boost’, which we partnered on with Volusion. We have a negotiated platform with them where we can provide a full e-commerce capability that is competitive with just about anything out there. It ties into our full catalog, they can go in and add their own product, and they can tie in ConstantContact and other plug-ins, to be able to do all the things a normal e-commerce site would do. “

The “Boost ” platform also helps retailers to have an “endless aisle ” capability. With the service, retailers have three fulfillment options: they can fulfill from the store, they can fulfill direct-to-consumer (from Orgill), or they can offer pickup in-store (Orgill ships to the store).

The “O Zone ” mobile offering rivals many of the apps that retailers are making available to store employees nowadays. The Orgill executive explained, “the app puts us in position to put a platform into the hands of retailers that they can use in the aisles for customer special orders or for ordering product from us as they are walking the aisles. We will extend the mobile offering so that it can exchange baskets with the e-commerce site. ” David went on to explain that Orgill also wants to integrate the e-commerce and mobile capabilities with retailers’ POS systems, “but point-of-sale systems are so diverse- many eras old, and resistance to replace it is high. We have open API’s to the e-commerce site and the app, so the retailer needs to ask the POS vendor to look into the integration. “

Attitudinal Challenges

Unlike in a big chain of company-owned stores, adoption can’t be dictated. “We have a wide range of customers, from Amish communities that won’t have any technology to cutting edge young businesses who are taking advantage of every technology tool they can. We have to find a way to enable as many of them as we can – to sell more Orgill product. ” Pressure from the big boxes adds impetus to adoption, however. According to David, “they’re all afraid of the Home Depot and Lowes down the street. But many of our customers are in isolated markets, where they ARE the big box. We get a lot of farm and ranch stores – and they want to offer the same level of service that a big box would. Amazon also plays a role; as a pure online player, they can’t provide the service side – there’s no relationship in the sale. So I see a big push from our guys to concentrate more on the professional trades and crafts. “

Orgill’s objective is to neutralize any perceived advantage the big boxes do have from technology, so that the independents can then highlight what they do better than anyone – offer local and personalized service to their customers. As big as Orgill is, the company “lives ” that model now, as was exemplified by Joe Orgill at the convention center bus station. What Meany and his team are helping to do is to enable the independent retailer to define who they are in the age of the digitally enabled consumer. Said David, “They want to be known as ‘Hometown Farm & Ranch’, and they want to be the place to go in their local market. “