Ready for disruption
Zamro is an ambitious and dynamic e-commerce company that was founded in February 2016. It has great ambitions for cross-border growth and focuses on the rapidly changing behaviour of the technical B2B buyer. With an assortment of over 550,000 industrial components, Zamro wishes to become a one-stop shop primarily directed at smaller and medium-sized business clients. Ease of use, perfectly understanding the customer and complete transparency are key ingredients for Zamro to disrupt its sector. But how can a young start-up become lean enough to scale up quickly and conquer Europe? We visited the headquarters in Amsterdam. Zamro emerged from the ERIKS Group, an industrial supplier and market leader serving large clients. ERIKS is a multi-product specialist, operating a total cost of ownership model, which was hard to replicate as a business model for smaller customers. In order to tap this group of companies, the idea was born to launch a webshop for technical supplies and tools for SMEs. Zamro was founded on the 11st of February 2016, and the website went live in October.
B2B market lags behind
Digital disruption in the B2B world, says Marketing Director Paul Kerssens, is lagging 10 years behind the B2C market. Especially in the MRO (maintenance, repair and operations) sector, B2B customers often have the choice of buying from large, traditional suppliers or to go to the wholesale-store in their local town. Or turn to the original manufacturer of the machine knowing that they will have to pay a premium price for the spare part. “In both options, there are plenty of obstacles for the customer,” explains Kerssens. “Selecting a product is not easy, ordering the product costs too much effort, it is very complicated and often requires registration. Prices are not transparent, there are never two people who pay the same for one product. If you don’t have a professional buyer, this is quite complex for a small business.”
The market is relatively big. According to Kerssens, only in Europe the volume already amounts to €125bn, €50bn of which is generated by SMEs. Nevertheless, there is no digital pure player active in this market yet. Also, the market is very fragmented: the larger parties in the market have market shares less than 1%. Kerssens explains that the above-mentioned are all signs that this market is ready for digital disruption. He adds that the trends in B2C retail, where customers are increasingly purchasing online, start to reflect on the B2B world. People are getting used to a high level of convenience and are ready to also experience that when buying for their company. Zamro aims to become a ‘one-stop-shop’ for entrepreneurs and assist their buyers with technical guidance tools. They aim to break down all barriers and make buying technical supplies easier. Existing businesses react scared: “We already feel the disruption effect. Other players in the market are asking: Who are you? Why are you making the prices transparent? Which is exactly what we wanted,” affirms Kerssens. At the moment, Zamro taps into the international stock and distribution system of mother-company ERIKS, but aims to expand the assortment with more specialised supplies in the long run to focus better on their target group. In addition, in order to become a one-stop-shop, items such as toilet paper and office chairs need to be added to the offer in the future.
Scalable knowledge transfer
One of the major challenges in this sector is the target group itself. Many of the small businesses are not yet very ‘online-minded’ when it comes to their B2B purchases. A second challenge is the technical complexity. “How can we transmit the technical knowledge in a scalable way? If we want to grow as much as we plan, we cannot explain everything on the phone. We need to work on tools and content that can guide these customers in the selection of the right product for the right application. As the applications can be rather complex, B2B customers are much more critical than B2C clients.” A third challenge Kerssens names is loyalty: many B2B clients are long-term customers at a certain supplier and it may be difficult to convince them to switch to an online shop. In order to win over customers, Zamro has launched various online and offline advertising efforts. “We researched the customer expectations of our target group, amongst others, by completing over 50 in depth interviews. Price is not the main driver for our type of customer. However, at the moment, we use special promotions in order to build our customer base.”
B2B versus B2C
B2C customers are a ‘by-catch’ for Zamro. They focus on B2B clients, showing VAT-exclusive prices and offering many brands that are specifically meant for professional clients. “Although at the moment 20-25% of our sales go to consumers, they are not our primary target group”, however, much of the customer behaviour and expectations are quite similar, finds Paul Kerssens. The person who places the orders is not necessarily the one who actually works with the products in the end, which is why good selection guidance is crucial. On top of that, professional orders often need authorisation from the management, which is why they are working on integrating a purchasing authorisation flow in the order process. “A huge difference between B2B and B2C is the order quantities: businesses tend to order much more.” In terms of delivery, reliability and expectation management seem more important than speed.
“We don’t want to become a marketplace”
Zamro launched their webshop on the e-commerce engine of the German B2B commerce specialist Intershop, which enabled them to launch an online shop and a complete order management system (OMS) within 5 months. The shop is easily replicable, it enables the possibility of a fast international expansion, international sales channels can easily be added and the platform is capable of handling large volumes of transactions. To enable a high degree of flexibility, Zamro integrated the OMS within the Intershop e-commerce platform and with the ERIKS warehouse, from where the orders are fulfilled. “Right now, we serve German customers from the Netherlands and Belgium, but this is only a temporary solution,” says Kerssens. One of the key future plans for Zamro’s growth is the integration of more suppliers, growing the assortment to over 1 million items. “Adding two, three or more suppliers will make everything more complex,” explains logistics manager Thomas Bloemaerts, “The OMS is ideal to aggregate the product offer. We are now at a tipping point where the OMS will have a bigger added value.” The OMS system has two major advantages: The possibility to integrate multiple suppliers into one single e-commerce platform, and the scalability when replicating the shop in several other countries. Bloemaerts says “In several countries, there are different VAT requirements, different email formats and invoices. With the OMS we can easily provide that individually for each country.”
“We don’t want to become a traditional marketplace, because as a marketplace you lose control over content. But it’s exactly the content that is key for us in order to offer guided selling. We want to diversify our offers and sell products from more suppliers and partners via our platform. The OMS system enables us to integrate more suppliers next to ERIKS.” Zamro eyes a drop-shipping system and will, in the long run, consider opening their own fulfilment facilities.
Europe within four years
Zamro has the ambitious plan to cover the whole of Europe within the upcoming four years. Belgium was the second market after The Netherlands to be launched in autumn 2016, followed by Germany in March 2017. A fourth market hasn’t been chosen yet, but will go live in the coming year. Careful observation and market evaluation are needed to prepare for the challenges ahead: “We have not experienced it yet, but there are certainly differences between countries. Germany for instance, is much more formal in the tone of voice. On top of that, hierarchies in Germany are steeper, which makes the purchase process different. In the Netherlands, Google Shopping works very well, whereas in Belgium the usage is limited.” Other differences are expected in the customer purchase path on the site, the use of media, marketing content and payment habits. Zamro plans on also diversifying the assortment according to regional and national differences. In terms of safety, certain products cannot be sold in Germany because their safety specifications do not comply with German law. In order to better understand new markets such as Germany, Zamro hires natives for both customer service and marketing. Next to the surveys within the target group, Zamro organises user panels and establishes a constructive exchange with the customer. After Europe has been launched successfully, Zamro wants to look in to possibilities for a next continent. Kerssens says: “We are following a rapid expansion strategy: scale up quickly, gain market share in other countries, be the first to conquer the sector.”