Europe may be emerging from recession, but Mark Larson, president of distributor Digi-Key believes the internet is creating new potential for business growth.
“If we do not double the UK business in the next two years I will be disappointed. There is an incredible opportunity to grow the business here,” Larson tells Electronics Weekly.
In the past, design work was done through traditional distribution, using data sheets, samples and tech support.
That has changed with the development of web-based services. “All this is now accessible in a form which engineers are more comfortable with,” says Larson.
“What would be interesting is to know out of 1,000 new designs how many are accessed through the web,” says Larson.
“Traditionally manufactures have supported the FAEs in distributors. Are they starting to question this?” asks Larson.
The distributor has also introduced an iPhone app, which can be downloaded from the App Store on iTunes, to search for parts, create shopping carts, place orders, access their My Digi-Key accounts and get product specifications.
Digi-Key currently sees much as 70% of its orders coming over the web. But Larson still believes that the print catalogue plays a role in initiating much of that online business.
“How much print conditioning was there?” asks Larson.
What role does he see social media and online communities playing in this aspect of the distribution business going forward?
“We are doing a lot of trialling of community sites, but for me the jury’s still out,” says Larson.
There are many community sites on the web such as Facebook and Twitter and Larson is keen to evaluate the potential of these to drive new business.
“We are looking at the potential of teasers and video on satellite sites such as Facebook and Twitter. They may be successful in a social sense, but will it be successful in a business sense?”
“I am not sure how enduring it will be,” says Larson.
Larson also believes the internet is changing the balance between local and global in the distribution market.
“International distribution has got ahead of manufacturers in many ways,” says Larson. “Many manufacturers don’t have a global strategy.”
But Digi-Key’s plans are not just about being a global business. “Another aim we have is to appear more local,” says Larson.
This can be achieved with better local knowledge of the product requirements of specific markets. Larson says that Digi-Key is doing this “virtually”; without any real local presence in terms of sales offices in the geographic markets it operates in.
“It is challenging to do this virtually, but we are definitely making progress and this is backed up by market acceptance data we have seen,” says Larson.