Grand & Toy forges ahead with full-fledged Net strategy

After more than 10 years developing electronic ordering solutions, one of Canada's foremost suppliers of office products is finally ready to forge ahead with a full-blown Internet strategy....

After more than 10 years developing electronic ordering solutions, one of Canada’s foremost suppliers of office products is finally ready to forge ahead with a full-blown Internet strategy.

The cornerstone of Grand & Toy’s recently announced ‘expanded Internet strategy’ is, a Web site that integrates the company’s enterprise systems. Geared to mid-sized customers, the site carries everything from paper clips to office furniture and allows business customers the ability to do online catalogue searches, receive real-time inven

tory information, and receive customer-specific pricing – (based on the amount of business they do, a customer may qualify for certain discounts).

‘It’s very much a business-to-business application, not a consumer/retail site,’ says Mike Duggan, director of commercial marketing and e-commerce for Grand & Toy, which serves three categories of customer, including retail, small to mid-sized commercial, and large enterprises. (Currently, 80% of G&T’s total sales come from the commercial side. Only 20% come from retail.)

‘[The site] is another way for us to transact and enrich those relationships,’ Duggan says. ‘We’re building it as a transaction machine to make the ordering process more efficient for our customers.’

For roughly 10 years, Grand & Toy has been catering to large and extra-large, multi-location companies with OrderPoint, a private network-based ordering system, which became Web-based about four years ago. While the system did a stellar job of serving large-scale customers, Duggan says it did not address the needs of small to mid-sized businesses.

Christian Gerard, CEO and president of Webfeat, Grand & Toy’s Toronto-based Internet consulting company, says the beauty of the new site is that it caters to all of the company’s business-to-business customer segments.

‘In the business-to-business environment, you have to understand that you’re still communicating to an individual – the information has to be tailored to their specific needs to make it simpler for them to place orders,’ Gerard says. ‘[Grand & Toy] has three different tailored markets, but they’re trying to make it so that, through a single medium, different individuals can easily access different information that’s centrally placed.’

According to Duggan, G&T hopes to drive 50% of its business through the Internet by 2003. In fact, he adds, 25% of Grand & Toy’s sales last year were transacted electronically, representing over $100 million in revenue.

‘Some of our competition targets certain segments,’ Duggan says, ‘[but] we cover them all, and we have every intention of doing that through e-commerce as well.’ will also leverage the company’s strength as a database marketer, says Duggan. Customer segmentation, custom promotions and personalization features are currently being incorporated into the site, in an effort to help the company convert existing customers to the e-business environment, he says.

Thus far, Grand & Toy has relied on getting the word out through direct mail programs distributed to offline customers that certain characteristics – size of business, ordering behaviour and frequency – suggest are ideally suited to online ordering.

‘We’ve made it so easy for people to transact with us other ways, that it’s sometimes a challenge to get them to see the light,’ he says. ‘All of our customers know that this is the way they are going to be transacting with us one day, but many still voice typical Internet objections, like security.’

Duggan says G&T is evaluating software applications that will allow it to do opt-in, permission-based e-mail marketing. To grease that wheel, he adds, the company is launching an online newsletter later this month to provide customers information on subjects to help them in their daily office routines – everything from ergonomics to nutrition.

Future personalization features might include customer micro-sites – where a customer can personalize the front end of the system – allowing Grand & Toy to start populating that interface with customer-specific information.

‘We already have a pretty sophisticated marketing database and we’re very data-rich,’ Duggan says. ‘Through some of the database work we’ve done offline, we’ve got the facility to do very customer-specific promotions, based on buying behaviours like order frequency and products. It’s now about taking that, translating it into the e-world and using that information on a daily basis for communicating with customers.’

Office supplies do lend themselves well to online ordering, and to behaviour tracking and data collection, says Michael Szego, formerly retail consultant with Toronto-based J.C. Williams Group, who has since joined Toronto-based Ogilvy & Mather. However, he adds, G&T’s actions will speak louder than words.

‘It’s true that office supplies tend to lead to customer-specific information linked to purchases – but most of these guys don’t do anything with the information.’