For any market sector, it would be nearly impossible to determine who will win or lose in the long run. But if you were forced to predict which companies were likely to end up winners in five years’ time, you could do worse than pick those that invest in technology.
Take Jaeckle Distributors of Madison, WI, suppliers of floor coverings and countertops. In business for more than 50 years, it continues to win awards from the manufacturers it represents across 10 states. But, problems were brewing, and even in this low-tech market, TIBCO technology is proving essential.
Can You Innovate in a Commodity Market?
The trend Jaeckle Distributors was seeing, common across multiple industries, was consolidation, which is fueling competition. But, competition was in turn fueling commoditization. Retailers were beginning to see flooring and countertop distributors as an undifferentiated mass, one no different than the other.
Commodity businesses generally compete on price alone and are plagued by high inventories and low profit margins. In other non-commodity businesses, you would say, “innovate,” but in flooring and countertops? Yes, here too. Jaeckle Distributors looked to technology and to Spotfire as a possible competitive advantage.
Today at Jaeckle Distributors, Spotfire is helping differentiate and uncover growth, process, and cost-saving opportunities. Over time, everyone in the company who relies on data to do their job effectively (almost everyone), will use Spotfire, says President Jeff Jaeckle.
“It challenges our assumptions,” says Jaeckle. “We’ve made decisions that were very different than we would have made when we had limited, not well-organized data and had to rely on intuition.”
How customers would benefit from the company’s analyses was not the initial focus, but it turned out to be a major source of differentiation.
Housing statistics are extremely important to this business. For example, if they know that for any given geographical area housing stats went up, say, by 25 percent, and that 60 days after the bump, they will be shipping product into that area, it prepares the sales team to target the right retailers. And, those reps now bring solid market predictions, product knowledge, special price offers, and promotional ideas.
It’s changing the selling relationship and method—from asking for the order to helping customers run a smarter business. It’s a keen differentiator in a commoditizing market.