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Five years ago, Conrad Electronic made a course change by transforming into a B2B procurement platform. CEO Ralf Bühler explains where the company currently stands and how it manages to secure a firm place as a technology retailer in the age of digital global players.

In the past, technology retailers simply sold products. But today, customers, especially in the B2B sector, demand much more. Platform business is the big buzzword, and Conrad is also taking this route. What distinguishes Conrad's platform economy and how do business customers benefit from it?

Ralf Bühler: Our goal is clear: We want to become Europe's leading procurement platform for technical needs. As such, we optimize the procurement of our business customers by not only offering them a wide and deep range of products but also scoring points with customer-centric solutions, tailored services, expert advice, and individual support. With all parts of our offering, we contribute as a business-thinking solution provider and long-term, reliable procurement partner significantly to the economic success of companies. Currently, I can say that the majority of our transformation from a traditional technology retailer to a procurement platform has been completed.

Five years ago, the Conrad Marketplace was launched. Is it still an integral part of the Conrad Sourcing Platform?

That's right. In addition to our core business as a retailer and service provider, we have been active in Germany since 2017 with our own marketplace that explicitly focuses on the requirements of business customers. Since product quality is crucial for this customer group along with a comprehensive range, we opted for a curated marketplace model from the start. Therefore, only verified manufacturers and distributors can sell their goods through our platform.

Is the marketplace business developing as expected?

Yes. Our goal was to double the revenue from the marketplace annually, and we have achieved that. We are now approaching a three-digit million amount. The expansion of the range underscores this success: Before the introduction of the Conrad Marketplace in 2017, we offered a range of around 800,000 articles on conrad.de. Five years later, we are already at over seven million product offerings from more than 650 manufacturers and distributors.

And what are the next steps?

The upward trend in e-commerce continues unabated and is gaining more importance, especially in the B2B sector. Accordingly, we naturally aim to continue growing in this area and have internationalization in mind: since 2021, our business customers in Austria have had access to a Conrad Marketplace for easy and fast one-stop shopping, and in July 2022, we launched our marketplace in the Netherlands. In December, it was Italy's turn, with more countries to follow. We are particularly focused on the opportunities for cross-border procurement to enable business customers to smoothly purchase goods across borders and help sellers tap into additional customer groups.

You are addressing the sellers right now. What are the advantages for manufacturers and distributors who sell through the Conrad Marketplace?

The customer groups addressed through the Conrad Marketplace are clearly defined. Every manufacturer or distributor offering goods in the technical supplies sector can essentially tap into new target groups and sales channels overnight and precisely. In Germany alone, our marketplace partners reach over two million business customers. Another advantage is that sellers retain full control over assortments and pricing at all times. They also have access to comprehensive services, for example, they receive detailed reporting with key performance metrics for their products – including traffic on product pages, competitor products, price comparisons with other providers, and the number of customers interested in specific products.

Going back to your target groups: You address small businesses, medium-sized companies, as well as large corporations. How can you succeed in taking into account the various customer requirements in the procurement area?

Whether it's a one-man business or a large corporation, what unites them all is the desire for simple, fast, and efficient procurement. Especially when purchasing C- and B-parts, process costs often exceed the actual product costs. The effort involved in needs assessment, supplier selection, approval, order placement, and order processing is significant. Payment processing and booking procedures also need to be carefully conducted and verified. E-procurement can streamline and accelerate these complex processes. More and more companies are therefore opting for optimized electronic procurement - and it is precisely this requirement that we meet with our tailor-made e-procurement solutions.

What do the different e-procurement solutions look like at Conrad exactly?

Conrad focuses on Omnichannel access and offers companies of all sizes the appropriate digital connection to the Conrad Sourcing Platform. The browser-based solution Conrad Smart Procure (CSP) is easy to use, runs on any device, making it the ideal choice for smaller businesses without their own ERP system. For companies with their own ERP system, OCI/Punchout or E-Catalog are available options. All E-Procurement customers can access the additional product and condition selection from the wide world of the Conrad Marketplace. They also acquire this extended range of products from Conrad itself - all from one source - so that, for example, no additional creditors need to be set up on the customer side.

Is the offering well received?

Yes, we see growing interest here and already a high demand. Currently, we have already implemented more than 3,000 e-procurement integrations in Germany alone. Our goal is to increase this number by 20% next year, so that even more companies can save costs and time in their procurement.

Does this mean that in the future, Conrad will focus only on digital processes and artificial intelligence?

Certainly, digitalization is increasingly important in modern corporate procurement. We also use AI to optimize processes, for example in managing emails and orders or suggesting alternative products in our online shop. Despite all the possibilities of digitalization, at Conrad, we continue to emphasize the human factor: Our business customers benefit from direct support through Key Account Management and Inside Sales. Additionally, our professional stores in Hürth, Regensburg, and Mannheim serve as contact points to engage with our expert team. The professional stores offer another advantage that the virtual world cannot: especially in the B2B sector, brick-and-mortar retail as an extension of the online model makes sense, for instance, when it comes to the immediate availability of a product or the opportunity to try out high-priced technology, such as an industrial drone, on-site.

What role can Conrad play with its solutions and services specifically for the automation industry?

In the area of automation alone, our procurement platform offers more than 900,000 product options. This includes an almost comprehensive range of automation and pneumatics components with over 190,000 items, to provide professionals in the MRO (Maintenance, Repair, and Operations) sector with optimal selection and quick availability. Additionally, we offer services such as calibration, PCB (Printed Circuit Board) board service, a 3D printing service, and a cable meter service for precise cable orders. We also present trends and innovations in guides, thematic worlds, and use cases, focusing on specific topics like field and process technology, Industrial Ethernet, decentralized automation, or robotics. For example, we currently see great potential in the use of collaborative robots (Cobots) and have compiled many relevant details in a whitepaper, which is available for free download.

You see yourself as a solution provider with 100 years of experience. How exactly can this look like in practice?

Making the procurement of technical requirements as efficient as possible and providing companies with exactly the products, solutions, and services that lead their projects or business to success – that's what we understand by being a solution provider. I can best explain this with an example: An entrepreneur in Frankfurt needed the right parts for an irrigation and monitoring system for his mango farm in Senegal. Our customer advisors then worked with him to determine the appropriate technical solution to meet the specific local requirements. On top of that, in the next step, we also had all the necessary parts in our assortment, ranging from the webcam and solar system to various electronic components.

Thank you, Mr. Bühler.