Honeywell Inc. opened the virtual doors of an online store that will sell measurement and control instruments directly to corporate buyers, a step Internet watchers say is emblematic of an ongoing explosion in business-to-business e-commerce — even among players in heavy industry.
Though it might not turn as many heads as some of its high-profile consumer-targeted counterparts, the Honeywell Industrial Store (www.industrialstore.honeywell.com) is designed to be an engineer's dream. It carries about 400 instruments built by the Minneapolis company's industrial automation and control division, which serves industries ranging from refineries and chemicals to metals, mining, oil, gas, food and pharmaceuticals. The site went live late last month.
Honeywell markets its building, industry and aviation wares primarily through a large force of sales reps, and the IAC division hopes its Web site will spread “frictionless trade” into the nooks of the market its direct sales force might miss, said Wayne Oleksak, IAC's manager of electronic commerce.
“We have a broad product line ranging from large systems that control an entire refinery, to small systems that run a packaging line, to temperature transmitters that go out in the field and send back signals,” Oleksak said. “It's very hard to get the full breadth out there in front of the customer.”
The company plans to further remedy that by expanding its online product selection to include larger systems as the year progresses. During the next couple of quarters, Honeywell will advertise the site in industry-specific journals and promote the store through links on the IAC and Honeywell homepages. The company traditionally markets through tradeshows.
Honeywell is not alone in beefing up its online channels. Forrester Research, Cambridge, MA, projects that U.S. businesses will sell more than $1.33 trillion worth of goods to other businesses in 2003, up from about $43 billion in 1998. In comparison, Forrester expects business-to-consumer revenue to reach $108 billion in 2003, up from roughly $8 billion last year. Unlike gross domestic product figures, which count only the end sale of a product, Forrester's figures include online reselling through distribution chains.
“I would definitely say [Honeywell] is part of a much larger trend,” said Bruce Temkin, Forrester's senior analyst for business trade technology. “We see in most industries more activity that … uses the Net to tie business partners closer together.”
Though Honeywell collects registration information from companies that make purchases through its store, Oleksak said the company does not immediately have further direct marketing plans for those customers.
As the number of products available on its site grows, Honeywell will further automate the site, adding an online configurator that quotes prices after customers enter specifics on products they want. Buyers currently can order equipment online with a credit card or send requests via fax to one of Honeywell's distributors. Fulfillment is being handled by the company's existing order management system.
The site also makes full product specs and documentation available to customers without any purchase obligation. And in addition to opening a 24-hour channel for Honeywell, the store will automatically let the company upsell its industry customers, Oleksak said.
“We're asking customers, 'What are you trying to do? Are you trying to measure temperature? We do that. Here's how to do it. By the way, did you know we also can record that temperature on a circular chart for you?' ” he said.
Honeywell began work on the store in September with a team that included internal staff, experts from Internet service firm USWeb/CKS and consultants from Microsoft Corp. Though he declined to give specific figures, Oleksak said Honeywell executives were very pleased with the site's January sales volume.
