Expanding a global B2B business model with eCommerce: the case of Vestas

So, is everything okay? So my name is Lars, I'm the director of e-commerce at Distas, which as I said is a new thing at Distas. My goal is to build an e-commerce channel that will make commercial value to the business, so that we can sell something. And no, we are not selling the turbines online yet, we will start selling the spare parts of the turbines first. So, I need the screen. So, what I'll talk about is the strategic context of doing e-commerce, why we all do e-commerce, why we want to sell products online at Distas. And I'll try to relate that to the whole strategy of my business and drill down to where e-commerce has its place. And then I'll use some time talking about the commercial and e-commerce, what are the learnings I've had, and why I think that will make a big impact on our business. But first, you will see a world premiere on there. We made a commercial video about e-commerce, so that hopefully in one and a half minutes, you'll know all about what is e-commerce business, so that you have a context for what we'll be talking about afterwards. Now we hope that the video is playing. At Bestis, we create best-in-class wind energy solutions. By combining state-of-the-art products with simple surface solutions, we allow you to release the full potential of your energy business. To optimize your service operation, we have created an online solution that will bring every part of your wind turbine close, even from a distance. Welcome to Shop Bestis, your direct access to the world's largest range of Bestis spare parts, all at a highly competitive pricing. Identifying and ordering the right turbine part has never been easier or more effective. You get the same great experience, whether you are on a desktop or mobile device. Detailed product data combined with high-resolution images makes verification easy and swift. You can ensure the compatibility of individual parts by exploring full assemblies and combinations, add products to your basket effortlessly, or interest in looking at item numbers to save precious time. You can even copy and paste entire product lists and simply request a quote. You have access to your order status at any time. You can track the history of each order, post any questions or comments you might have. Our experts will get right back to you. And when you're ready to accept your quote, all you have to do is tap your finger. This way, you have an experienced service partner with global perspective close to you at any time. Shop Bestis, optimizing your energy business. That's great. So, parallel ecosystem. So this is, of course, just the beginning. And it starts somewhere else. It starts with the strategy. You know, this has been achieved. Most people make wind turbines. We are pretty good at that. We are pretty big. It's the largest one in the world doing that. So, there are interesting numbers here when we talk about e-commerce is that we are in 75 countries. So, it is a global solution we, of course, need to make to sell to staff around the world. We are also installing a lot of turbines. And see from my perspective, selling spare parts, that's very good because the more turbines we sell, the older they get, the more spare parts they need. So, I mean, the business that we just grow over the coming years. And that's, of course, also why we're looking into how can we make it more efficient to sell spare parts. We also have an organization in place, obviously, because we've been here in Denmark for many years. So, we have people all around the world close to the customers. We have warehouses around the world. So, we have kind of the basic logistic in place already. So, doing e-commerce is also utilizing that potential already helped with our organizational setup here. This is our strategy. And that's not me that made that. But that's what I want to tap into with e-commerce. I'm not going to go over it. But as you can see, of course, we have high business. We want to be the undisputed leader in the wind energy sector. And we have some business there. The area we're talking about e-commerce in is kind of the after-sales market. So, the things you always hear about when the intermediate investors have done something, sold something, that's the projects. That's we sold this wind turbine pack and then we're selling it up. That's the project partnership. The after-sales part is where we are tapping into the service of business. And service and the product selling is equally. Importantly business and have the same size almost. Also today. So, what is service? Service is four areas. We have to the left, we have the maintenance, partnering. So, that's also what you hear about in the media saying that this is sold something and it came with a service contract. So, that's like leasing a car. Our customers are paying us. And then we have to make sure that the turbine pack is running to some agreed levels. And we will actually make sure it's the right path to put in place. So, the customer says that that's your problem. Handle that yourself. On the other side, we have data services. Which is what I'm getting to with this big data, truly big data services. Monitoring turbines and making sure that we have data that can optimize the utilization of the energy. We're doing upgrades for the turbines. We're putting software in there that will make them spin faster. And then we have the parts and repairs part of it. Which is the more or less transactional stage where customers are buying parts directly from us and then installing them themselves. Or they have a third party service prior to installing it. Or they're asking us to, on a one-off basis, install it. So, they buy the parts and they're also buying the service for us to install them. And that's where e-commerce starts. So, that's selling physical products. Selling the spare parts online. But it's not where it ends as it says here. Because we don't see any limitation to what it is we could sell. Also in the business. In the B2B context. That could be software. It could be documentation. It could be consumables. It could be renovated parts. It could be... There's a lot of things we could sell. And who knows? Eventually we might even sell the turbines online. But not in the foreseeable future. So, now a deep dive into that area. The parts and repair business. Just to give you some idea of the volume. It is... And that's last year. We have half a million parts that are sold globally. We have one thousand suppliers. And we are making sure that we have all these parts available. We're not manufacturing all the parts ourselves. As you can see. Some of it is from... It could be from Grundfors or Danfors. Some of the things that are in the turbines, for example. We have the warehouses, as I said earlier. All over the place. And we have 19,000 individual parts. Vestas parts. So, that's... Everything is relatively. But for our part, this is big numbers. However, that's just the start. We are starting Vestas spare parts. We have also bought some independent service providers that are servicing non-Vestas turbines. Siemens turbines, GE turbines, Gemisa turbines, etc. And we're doing that to expand the business. So, now we're not just being there for some Vestas spare parts. We are also supposed to solve non-Vestas spare parts. And that kind of explains the scope of what we do. And we have some ambitious growth targets. So, those numbers has to grow 30 to 40% a year. So, that's... Yeah. Some ambitious things. So, e-commerce. That is to support that strategy I tried to... We'll quickly go through. And to allow to the parts from the past business. So, introducing e-commerce in the B2B context. That's not a stand-alone, in our context, not a stand-alone channel that should compete with the rest of the business. It should support the business. So, sometimes you hear omnichannel as you're speaking of that. And that is what we're doing here. Because the challenge is to support that our sales people have a more efficient channel so that they can get in dialogue with the customers. And remove some of the noise that is in finding the right product and making sure it comes to the right time. And instead of having dialogue about this is the right price, this is the right product you have, what can we do else for you? And we believe we should build best in industry e-commerce. And I'll try to unfold what that is so you hopefully saw a sneak peek of what we believe it is on the user interface. But we want to offer a superior customer experience. And also drill down to why we think that's worth a lot commercially that we're doing that. And then as an overarching thing we always aim for is that whatever we do, also e-commerce but also other things we do, it is supposed to make it more convenient for the customers to do business with us. And then we can unfold what is convenience that can be more convenient for the customer. And it's a different thing in different contexts. But also when we do e-commerce we need to always look at that. Because we believe that will make a big differentiating for the customers. So seeing from the customer perspective, what's in it for me as a customer? And it's pretty easy to put down the value proposition to the customers and it's very hard to then fulfill it. The first thing is actually by far the most difficult thing. Because today you might have two turbines and you have one turbine and you have two And you have a lot of products that are for me and for most of you I would assume will look totally the same. They will be wide and they will have a height and they will be tripled and there might be a number saying V112 and they will stand next to each other and you will say that's the same. But then when you go inside it, then it will be different because they might have been manufactured at different times, they might have been serviced in different ways etc. And the wind energy sector is a new, in the broader perspective, a new sector. So in the past they were just blowing to the wind. Yeah. Like the wind was blowing on the given day so to speak. And of course that's been personalized even more and industrialized even more. But it's still a science to find out what is the right part for my specific turbine that is sitting right here. So if we can do something for our customers that will make it easy for them and make them confident that they are buying the right part, then we are a long way towards that goal of having them actually then buying the part. Then when they identify the part, then of course the owner will be able to say, well this part should be convenient, it should be easy to put it in the basket, it should be easy to get the price, it should be easy to get the part delivered, it should be easy to reorder and all of that stuff which is traditional e-commerce in my world but Brazil of course is difficult to do, we still need to do that. And then our last part is that because it is Vestas Turbines we are selling to the first, then of course it is our turbine so we should have the biggest catalog of spare parts. So you should be able to go to business and have this one stop shop where you can buy everything from one place. We of course have different target groups, I will go into the details for that, but that also means that we need to design the experience, the customer experience differently towards different customer segments. So there is some kind of personalization involved in doing e-commerce also in a B2B context. And then the next complexity is both the roles. You might have for one customer that is a service team assistant out in the field that needs to identify the part that goes into the turbine, then a site manager is the one that is consolidating from several service team assistants, then is forwarding it towards the procurement in that big organization and then they are doing the buying. So we also need to accommodate that. So we really need to put ourselves in the customer's place and find out what makes sense for you, what will support the way you do business and make it more efficient for you to do it with business. Thank you. So summing a little bit up of why we are digitalizing spare parts sales, there is the growth parameter in it and that is pretty much aiming solely at existing customers. So existing customers can buy cars from other vendors obviously, but we want them to buy their business spare parts from us. So if we have this service and are good at selling and have a fair price etc., then we hope that can drive more and more sales for the existing customers. Then we also have did some analysis saying that, or seen that a lot of people actually search online for spare parts and I don't know about you but I would assume if you search for spare part V112 turbine number something, then it is probably because you need that part and not just for the front of it you search for it. So and we know that around half a million yearly searches for spare parts online globally. So there is a potential we believe out there but we don't know yet so we need to go out and test it. And see if we need to do a search engine optimization and buy AdWords to rank highest on Google. We also need to do that when we do B2B. And the profit part of it, one thing is growing the revenue but we also, because we are growing so much as you saw the 40% is the growth tax, so we also need to be smarter at what we are doing. We need to be more efficient on the inside. We need to be able to do the back end processes, the crowing process, have our sales agent work more efficiently with that. So that we can free up the back end. And we can give them more time for them to be in dialogue with the customers and not administrating whatever they put in as a crow. So that they can instead call them and say, okay this crow, what does it take to close that deal? Do you need assistance in finding the right product? Today the management don't have time for that because they are just processing the request that is coming in from the customers. So this is very much about efficiency too. And then as everybody else, loyalty, we of course would prefer to keep our customers. We think it's much cheaper to have existing customers than to acquire new customers. So what we are building should also support that and see equal also in a greater context and the whole ecosystem of digital services and other services. I also have a consultancy site which I use a lot, but this makes a lot of sense that we use it a lot internally. Because when we are talking about spare parts, I can meet colleagues and visitors and say, yeah, but it's just about price. It's just about we need to have a more efficient service. We need to have more competitive pricing. We need to give bigger discounts. And yes, that might also be part of the answer to growing volume, but if that's the only thing we do, then we will end in a dead-end game where nobody will make money on certain spare parts. Luckily for us and others is that there are a lot of studies, and this is just an example, saying that the customers of course are smart. So they are not only looking at price. They are just as much looking at convenience and making sure they get the right product that is getting delivered. So having those two, we can kind of balance the two. Of course we need to look at price and be competitive in that regard, but we also need to be competitive in customer services, customer-facing services. And so that's back to why we think making great customer service is worth money. So why are we doing that? Then, yeah, this one I hope I'm talking to a enlightened audience, but of course our end users are not working the whole time. They're off. They're just an ordinary B2C end user and they're used to excellent digital services. And of course they expect the same when we talk about B2B professional services. So we just need to make the same quality also when we're doing B2B. So that's also a target. Then a few learnings that I would like to share with you. The vision prototype. When this started almost one and a half year ago, it was coming from top management saying, we want e-commerce. And it has to be best in class and blah, blah, blah. And we were just like, okay, but what is best in class e-commerce investors? We didn't have anything. So it was totally new for us to make e-commerce. So we decided to gather some fellow people. We used some external people to have that outside-in perspective on us and someone that was also good at drawing, prototyping, and doing excellent user experience designs. We gathered some people from our engineering department and knew what data is available, what data is available. We gathered people from our sales department that hopefully knew what customers would like to have. We didn't involve customers. We could argue that we should have done that too, but we decided not to at that point. And then in a pretty short timeframe, one month, pretty intensively, we created, and this is just a few screenshots, a very comprehensive prototype that could kind of visualize where that we might end up with e-commerce in two, three years' time. And everybody knew that it would not end like this. It would end like something else. But just to set expectations internally and do stakeholder management and go to the management and say, okay, this is something like this we propose. And then they would say, yeah, a little bit more of this, a little less of that. Interesting. And then we kind of start aligning expectations. So that was really, really helpful. And also afterwards, it was really helpful to start the project because we had to figure out where to start building e-commerce. So you could use all of that novice we gathered here to kind of deep down say, okay, this is where we need to start and there are some low-hanging fruits over here because we might have the data available. So it's just a question about making it visible in a good way. We also created some personal experience design principles. And it's not like I'm looking at this every day. But it is a guiding star for whatever we do that we look into these. And you will see variants of that. I think if you look at Schwartz, some TNCs, some of that would be the same. The key here is that we've been using it to deep down say, okay, what does efficiency mean in a business e-commerce context? Okay, in this case, it's about an end-point price for me. And then you can go on my price, my delivery date. Discibility. We want to make something that reflects our brand, that is as good as whatever else we do and triggers them. And to explore the solution and hopefully buy more. We want to keep it simple. And we want to collect it also. It's convenient for customers to buy from us. Then I have another dynamic program. We, of course, have a plan. And right now, the one you just saw is here. So we just released the second version of e-commerce. And the... So we're focused on this program, which is changing almost on a weekly basis. We're changing stuff over here, saying that, now this needs to go out and we need to put that in instead. It can be because of technical complications. It can be because of the business changes. For example, someone buys a service company that sells Siemens parts. Okay, then e-commerce needs to support that eventually. So that's the line of sight to the strategy where we need to really support those strategies that are put in place. And we assume many of you have worked with roadmaps in various variants, but this is very effective. And this is the one pager we use the whole time to set expectations to what this we're building. And then it has some themes saying that, okay, next time we want to enable multilanguages. And then there might also be other features, but the important commercial value is that it will be multilanguages enabled. Going to October, it will be public available. Right now, you cannot search for shop investors yet, but you will be able to do that in October. Before that, it's existing customers. And then we have a long list of things we would like to build. And some of these things will take a year to mature internally. That could be the supply chain of rates that need to be able to put forward the more exact delivery dates before we can expose it in e-commerce. And that's not something that just do. That's something that they need. And fair enough, they need to figure out how to do that with high quality so that we can trust it as they say. Then, this roadmap is kind of mapping just an example of external communication. So we kind of, of course, saying, saying in transparency, we solve the same to the customers with less details. We don't want to promise them something we cannot fulfill. So this is an example of what we go to the customers with. Also to get their feedback. So being out in dialogue with customers. And we have Tyler customers on the system now that are helping us forming what should we do next and saying, okay, this doesn't work as good as we would like it to. Perhaps we could do this and that. And then we take any of that feedback. Of course, we decide what to do. But we want to be in close dialogue with our customers. Not be building to them, of course, for investors, but it needs to fulfill their needs if they want to buy from us. A few other letters. Constance is king. And as an example, the 19,000 parts we have available, we have data for that. And our parts obviously have a name. But that name, that might have been done by an engineer 30 years ago, deep down in the basement, never thought about that that should end up in an end-user's screening. So some of the naming of our products is just like crazy. I don't know what it is. And some of our customers don't know what it is. So, and of course, they didn't do that by being evil engineers. They just did it because they didn't think about it being used for this purpose. So now we have a big task in cleaning up the data, making sure that the 19,000 names are making sense to a customer. That's a big task. And that's just the naming. Then we can start pulling, is the weight correct? Is the dimensions correct? What about the commercial description of what this product does? And before we have that in place, because that's what the customers are looking for, useful information about to select the right product, then it doesn't really matter if we build a nice-looking interface in terms of that, if that's not in place. Of course, we also need to do that. And then, also as Arne said, but with a little bit of variance here, build, learn, and adjust. And actually, I'm not here talking about the development cycle, so we build something, we put it out there, we test it, and we then do some adjustments. I'm just talking about that when we put out e-commerce, we also use that as a change management project internally. Because, for example, the back-end process, the crew process, so that when the customer puts in a request for something they want to buy, we need to figure out a price for that, and we need to figure out delivery times, et cetera. And we, when we start e-commerce, we kind of assume that process is in place, we know it's not perfect, and it might not be fully globally aligned. And then we pull out e-commerce, knowing that there might be a gap here, between where the back-end process is, and where the solution needs to be. And we did that on purpose, so that they can create that kind of sense of urgency, so that someone needed to kind of catch up to us, and make sure that the back-end process was good enough. We do that with a lot of stuff, all the time, kind of dragging things with us with e-commerce. And sometimes it goes the other way around, there are things, processes, where we need to catch up to e-commerce. And the tricky part... Of course, you cannot do something where there's too big a gap, so that the catch-up will just make you fail, and the customers will have a bad customer experience. You need to do it with thought, but it is very effective to drive change like this. And then finally, the old one. It's very easy to end up focusing on systems, or the user interface. That's tangible, you can look at it, it's the fun part, it's what you can talk and discuss and use time on. And it is important, of course it is. However, if we don't look at the processes, for example the code processes, we don't look at that what we come with here will change people's daily work life. They will need to work in different ways in the states of our station. Everybody wants e-commerce in the US, that's the problem. That's the bit what they're telling me, so I haven't heard otherwise. But they want it in different ways, and they have different opinions on what is most important. And if you don't manage that through the stakeholder management, and make sure that the right support functions are in place, and that our insurances can get answers to questions, etc., then it really doesn't matter. So, thank you.