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Not content to lead the MRO world in online transactions, Grainger has gathered companies form other markets to chart new territory in online integrated purchasing.
When it comes to online purchasing, the king of the maintenance, repair and operations (MRO) marketplace is W.W. Grainger, Inc., Lincoln-shire, Ill. The purveyors of the big red catalog have translated their business into the online world with a three-fold attack combining the company's e-commerce-heavy Web site (www.grainger.com), partnership agreements with procurement-system developers such as CommerceOne, Ariba and SAP, and a new, integrated purchasing Web site called OrderZone at www.orderzone.com.
Why does a company need multiple online purchasing functions? It is part of a "multi-channel strategy" based on the varying needs of customers, says Daniel Hamburger, president of Grainger Internet Commerce. Grainger.com serves straight MRO purchasers, OrderZone serves those with more diverse purchasing needs and the provider partnerships serve larger organizations with complex purchasing systems. Hamburger cited projections for business-to-business electronic commerce predicting it will grow into a 1.3-trillion-dollar market in 2003. "You will need multiple channels to capture as much of that business as possible."
OrderZone, Grainger's newest online offering, allows customers to buy from six different suppliers over a single Web site, on a single consolidated order, and to pay for the service with one payment. Customer service calls likewise are handled centrally. The operators can "warm-transfer" callers with technical questions directly to the customer support offices of any of the member suppliers so callers don't have to dial a second number. Credit clearance is done automatically by e-mail when a user registers with the site.
Joining Grainger Industrial Supply on the site are Cintas Corp., Cincinnati, Ohio; Corporate Express, Broomfield, Colo.; Lab Safety Supply, Janesville, Wis.; Marshall Industries, El Monte, Calif.; and VWR Scientific Products, West Chester, Pa. Hamburger says the company hopes to add more suppliers of other products and services in the near future.
OrderZone is set up for very simple operation. A banner across the top of the page allows a search by keyword, item number or manufacturer's model number on any one or all six OrderZone member suppliers. Search results can be added to a shopping basket, as with most e-commerce sites.
Grainger did $10 million in sales over the Internet in the first quarter this year, and is on track to finish the year in the neighborhood of $70 million, the company says. Hamburger says sales online are also driving additional sales through its tradition catalog and branch system.
"We have found that our customers who have gone on-line have grown their business with us about five times faster than the customers who have not gone on-line, AND we have found that their growth with us has been both in our traditional channels and in the on-line channel."