Global Fastener News

Michelle St. John finds good news for distributors competing with the growth in online buying.

St. John, the outgoing president of the Specialty Tools & Fasteners Distributors Association, told the group’s 42nd annual convention that she recently read a supply chain blog which said (1) customers want to buy online; (2) big online players use technology to minimize customer interaction because its unprofitable; and (3) industry experts still assert that “people want to feel cared for.”

“This is good news!” St. John declared in her State-of-the-Industry address. “It means we are competing in the area of ‘care’, and isn’t this best accomplished through relationships? When was the last time a website anticipated your needs or made you feel cared for, the way a relationship with a trusted advocate did?”

St. John and her brother, Derek Butcher, are the second-generation co-owners of Auburn, WA-based Industrial Bolt & Supply.

“I read a staggering statistic that $.49 cents of every U.S. e-commerce dollar spent is spent with Amazon,” St. John noted. “I am sizing up this giant while counting the stones in my arsenal, concerned that my weapons are insufficient for battle … fearful that this is a contest I can’t win while deliberating how to compete with the very company who is defining our customers experience – one that demands expediency, and economy – a combination that rarely equates to profitability – and, at a minimum, requires a healthy investment in technology to not only establish an online presence but to redefine the sales process in a way that both preserves the relationship and serves our mutual interests.”

St. John worked for Proctor & Gamble during the early 90s emergence of Walmart.

“If you remember that time, or perhaps live in a neighborhood where once stood a family owned grocery store that is now a gym, you may identify with this lesson,” St. John reflected. “I recall the voice of my small independent grocers who feared they couldn’t survive the low-price-high-volume ‘attack on mom and pop grocers’.”

This once-essential long-time channel for P&G became obsolete.

“Walmart was just too big to ignore,” her boss explained to her. P&G could not survive without partnering with Walmart.

“We all recall how this warehouse model later materialized in our industry with the battle of the big box stores and surely the advent of Amazon summons similar fears of the nearly predatory nature of these low-price outlets gobbling up small distributors,” St. John noted. The fears are so real, “I’ve heard peers say, ‘I just don’t know if we can win’.”

“And then the optimist in me considers the words of baseball great Joe Torre who said, ‘competing at the highest level is not about winning’, and I wonder, what if winning is more about competing than defeating? I am as competitive as anyone and I like to win, but more than winning, I love a good game; a fierce matchup between tough competitors; the sort of battle that exposes the best in both opponents such that each is better because of the other,” St. John said.

“How can this competitor make us better?  Can we profit by building off the model someone else has already invented, tested and essentially trained our customers to expect?  If we can embrace one lesson from this now trillion-dollar channel player, it is the idea that we win when our customers win, or Mr. Bezos’s now famous mantra ‘it is all about the customer’,” St. John observed.

“The answer is to amplify your de-digitized solutions and the indispensable value of your already expert customer service model – that unique element which has long been your competitive edge – to improve the customer experience,” St. John advised.

“Your brand may be intangibles like responsiveness or customization … because rigidity is widely considered the Achilles heel of on-line giants,” she pointed out.

“If there are only two ways to gain a competitive advantage; do things better than your competition, or to do them differently,” St. John declared.

“Differentiation will continue to be the name of the game,” St. John added. “At a time when our star products are being nearly commoditized, however, how do we dispel sameness? Maybe it’s through private labeling? Perhaps your chop saw is bundled with your private branded blades – the ones with your name on them that only your company supplies. Maybe it’s a company app that literally positions you as a solution in the palm of your customers tech-savvy hand, or a loyalty program, or an obsolescence guarantee that acts as a form of relationship commerce; a program we employ to engage with our customer in a way that personalizes and quantifies our interest in their profitability.

The sooner we are meet where they are the less likely they will be to migrate away.

“We’ve all heard it said that ‘the best defense is a good offense’, and in our business, offense is synonymous with innovation. As a small distributor besides our people, new products are our greatest asset,” St. John said. “We depend on our manufacturers to innovate and educate … their role in our success cannot be under-stressed. We expect a lot from our manufacturers, and our rep agents. But we also believe that we have a responsibility to perform for them.”

The key to competing is the team and STAFDA is a key of the team supporting distributors. “It may sound cliché, but we can’t really compete without each other,” STAFDA’s first woman president said. “As an industry, particularly in this new ‘age of the customer’ we will continue to rely on each other to execute our respective positions in order to win our customers loyalty and profitably protect our share. But our dominance as a channel may be proportionate to the degree that distributors are able to collaborate with manufacturers who are equally dedicated to improving the customer experience, but also committed to investing resources to strengthen the distributors presence in the markets they serve.”

“In 1977 my dad, armed with a yellow legal pad, a dream, unmatched ambition and a blue Chevy pickup truck – started our family business, St. John noted.

Her parents, Jack and Linda Butcher, joined STAFDA 41 years ago in the association’s second year.

Her dad returned from STAFDA meetings with pages of notes. And he had a rule, which experts refer to it as ‘the law of diminishing potential’: If we have not taken the first step towards applying a new idea within the first 72 hours of learning it, the likelihood that the idea will be implemented into action and actually drive change is nearly zero,” St. John said.

“One of those ideas is now a cornerstone of our company: develop and sustain mutually profitable relationships with customers, suppliers and personnel,” St. John explained.

St. John has been with Industrial Bolt & Supply since childhood.

“We all remember our first job … for some it was a paper route, for others, babysitting or lawn mowing. For my brother and me, it was packing kegs of bulk products into smaller, resell-able units. It was a family affair that played out on the green shag carpet of our living room floor most Saturday nights over back to back episodes of The Love Boat and Fantasy Island. Imagine counting thousands of 16-14 blue butt connectors by twos into bags of 100… I laugh when I think about the rote nature of this essential work that we now perform with scales and soon, total automation … and I smile when I think of how 5th grade me, could not imagine that we would ever sell all of those bags.”

St. John funded her college education by packaging – at 10 cents a bag – 160,000 bags of small consumable MRO parts.

For the future, St. John predicted industrial distribution will look like “high level channel collaboration fueled by customer engagement, empowered personnel, and the pursuit of mutually profitable relationships with our suppliers, our customers and our people.” Web: STAFDA.org