eCommerce is not a threat to your business

This week Eric Sfiligoj at CropLife posted a great article titled ‘Here’s Why e-Commerce Is No Longer a ‘Major Threat’ for Ag Retailers’. Eric’s point is straightforward, the industry has embraced eCommerce and thus doesn’t fear it as much as they had before. With our now 70+ partner retailers using at least one of AgVend’s three digital commerce products, many of whom are in the CropLife 50, we would have to agree that ag retail has made a significant push into the space. Our partners are quickly learning that an integrated digital commerce strategy isn’t a threat but rather an opportunity.

Most attribute this strategic shift as a response to the rise of Farmer’s Business Network. While we acknowledge that FBN may have sparked the initial interest, their model actually relied very little on ‘eCommerce’. Until recently, as a grower purchasing on FBN Direct you needed to speak to a sales representative to complete a transaction. But FBN did show the industry that there is a transactional grower looking to purchase inputs separate from value-added services and that growers are comfortable with a more digital way to browse, engage, and transact.

AgVend’s first product, the AgVend Marketplace, is ag retail’s response to FBN Direct. It targets the transactional grower, breaks out products from services, and enables partner retailers to reduce their cost of sale by selling to growers via a low-cost online interface. But like FBN, it only targets a specific segment of customer and, while that group is increasing, it still does not represent the majority.

So is the hype around 3rd party entrants entirely upending ag retail overstated? Yes. Does that mean that all this digital commerce investment is for nothing? No.

What the majority of growers want is an experience that integrates digitally into the way they are doing business with ag retail today. This is the number one principle in the commercial teaching that we have done with our partners since 2017 — ‘Take an integrated approach to digital commerce’:

The goal is to not remove human interaction, not pin offline vs. online, but integrate digital into your overall go-to-market strategy in order to meet your customers wherever and whenever they choose to do business. This is the definition of an ‘omnichannel experience’ (ok reached the buzzword quota right there).

This principle is the foundation of AgVend’s two other white-labeled product lines, the Storefront and Grower Portal. These products (which included branded mobile apps) enable our partners to launch this type of omnichannel experiences in a matter of weeks. So for some, it might seem odd that in our sales deck we have a slide that looks like this:

but that is because we don’t define our offering as ‘eCommerce’ in the traditional sense. We don’t believe that the majority of growers want a purely online option to point, click, and buy. Instead, they want online to be a part of their purchasing process, not the whole.

In traditional consumer retail, just 7% of total dollars were transacted online in 2017 but over 60% of total dollars had at least one digital touchpoint. With our Storefront and Grower Portal products, we see a similar split where for every 5 purchases online there were 95 sales that started digitally but finished in person.

We see growers following a similar pattern as consumer shoppers, they will eventually do the bulk of the buying process online but ultimately transact in person. For example, a grower may review plans, research products, and compare financing options digitally through an AgVend Grower Portal but ultimately make a purchase in-person. This grower is neither an online or offline customer, they are both. We coach our partners to look beyond where the transaction takes place and arm them with tools to make sure they have visibility into the entire purchasing journey.

If you are interested to learn more about how AgVend’s solutions can help you launch an integrated digital commerce experience, let’s chat!

AgVend powers the omnichannel experience in agriculture. We provide ag retailers with white-labeled information, engagement, and commerce portals. Our suite of products is designed to strengthen the relationship between ag retailers and their grower customers. The AgVend team is comprised of individuals with backgrounds in agriculture, digital marketing, and omnichannel retail, and operates from dual locations in Minnesota and California.




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