“I could imagine opening up for third-party sellers”

Interview with Jules van der Werf, MS Schipper: About a global, digital transition in the livestock farming industry

This article previously appeared in Cross-Border Magazine nr. 2/ December 2016

The only production facility still located at the company’s headquarters in the Dutch village of Bladel, close to Eindhoven, is the one which produces ear tags- around 300 million per year. That is no coincidence: ear tags were the first of many successful business ideas of founder Martien Schippers, who started his entrepreneurial adventure selling cigars in a village shop. Many in the village were farmers who worked hard during the week and seldomly found their way to the shops. Martien used to get tired of waiting around behind the counter, so he frequently closed the shop and visited the farmers to sell his cigars and to have a chat. Out on the land, he witnessed the growth of the farming industry and the challenges that came along with it. One gentlemen had difficulties keeping track of his growing cattle stock, so Schippers came up with a solution to label the animals. This later evolved into the famous plastic ear tags used for animals all around the globe, and was the beginning of a flourishing family business that celebrated its 50th birthday in 2016. Jules van der Werff was hired to guide the company through its transition towards becoming a global e-commerce player. We spoke to him at the company’s headquarters in Bladel.

How would you characterise Schippers as a company?
“It is not only the ear tags that have become a symbol of the company’s legacy. Being close to the farmers and frequently visiting them on-site is still one of the main principles of the company with the slogan ‘Passion for Farming’. Today, Schippers boasts 12 sales offices, 10 000 SKUs, is active in 40 countries and employs a staff of 350 worldwide. We continue to develop new procedures and products to enable the farmer to do his work the best he can. Today, Schippers strives to become a world leader in its sector of livestock farming.”

Why is there such a strong focus on international sales within Schippers?
“When the business was passed on to the next generation, the company was internationalised. Martien Schippers’ sons took over the lead in the mid ‘90s. The twins Harrie and Guus moved to Belgium and Germany respectively to build up Schippers’ presence there, whereas their younger sibling Mark focused on the Netherlands. Retired Martien and his wife spent their time roaming international trade shows and used their growing network to build an international office structure. Today, Schippers runs sales offices in the Netherlands, Belgium, Germany, Spain, France, Italy, Russia, Great Britain, Canada, Brazil and Denmark. In most markets, Schippers work ‘direct-to-farmer’ and without middleman, which enables us to keep track of the individual challenges of our farmers. Only in countries with weaker potential are distributors in place.”

Which sales channels does Schippers use?
“Schippers focuses on three sales channels: inbound sales, field sales and e-commerce. In 2003, the inbound sales channel came to life, and today counts 55 employees. As well as our website, we also have a print catalogue. In 2011, the first steps towards an e-commerce channel were made. In the past, our entire sales were principally based on outbound sales, but at present, the inbound service does a lot more work through phone calls. The inbound sales team, covering the Netherlands, Belgium, Spain, Italy, Denmark and the UK from Bladel, heavily rely on information from the e-commerce systems.”

Which challenges presented themselves when you started your job?
One of the challenges many traditional companies face is a lack of belief within the organisation when it comes to digital transformation. Of course, at certain times, a management decision is taken and an investment is made, but then the project is handed to an internal employee with not much digital experience. That is dangerous, because you risk lagging. When I was hired, we started convincing people within the company that digitalisation was the way to go. The outbound sales agents were especially afraid at first and had to get used to the fact that we were not taking away their jobs, it was just another sales channel.”

What was the motivation to move towards a more digital business model?
“On the one hand, we wanted to sell online because the customers are increasingly getting used to doing everything online. In their private life, they are accustomed to services as offered by Amazon or Zalando, and therefore begin to wonder why in the B2B environment they should still do everything in an old-fashioned way. In addition to that, we wanted to improve our service. We had a strategic analysis performed by a company called Fenego, who made an overview of how to better translate our goals into a digital strategy. We want to sell the farmers what they need, but also offer technological support to help them improve. One example is to help livestock farmers monitor the growth of their animals online. Technological applications like this not only serve the farmer, but also help us to offer the farmer new options to optimise his business, such as advanced nutrition fitting his situation. The classic cross-selling has got a new component: the salesman used to speak to the farmer out on his land to talk about his needs, but it is now also driven by data gathered online. Online data has given us an alternative, additional source of information.”

So, the e-commerce system is also used within the organisation?
“The digitalisation of Schippers’ processes supports both the continuous improvement of the system, and the optimisation of support the company can offer to its customers. Customers can see their invoice history independent of the sales channel of their previous orders. They can easily place repeat orders or make a list of favourite products. They can also start a return procedure wherever they are. Also, the inbound personnel of Schippers can always access this in real time.
The 10 localised websites not only serve the customers buying online, but also support the inbound sales agents when assisting buyers over the phone or to make orders. As the inbound agents make such heavy use of the e-commerce systems, their feedback is of great value when improving the processes.”

Do you offer localised content?
“Yes, we have all our foreign websites in the appropriate languages, and I can tell you that translation is an undervalued challenge. We use translation agencies, and then have all content double checked by our local people. We are lucky to maintain good relationships with the team and clients in all countries, so we get enough feedback to find problems in the texts and to improve. Besides translations, the content is localised as well as the payment methods.”

How did you manage the transition to a functional, international e-commerce system?
“We have a PIM system (Product Information Management), where we manage our collections, which we share with the webshops. In the Netherlands, Germany and Belgium we have the same collection, which can be compared with a category structure. Products may differ, but the structure remains the same. In Canada, for instance, we have a smaller assortment, so we had to adapt the category structure. Our PIM shares product data and collections with touchpoints through websites, apps and catalogues. From the PIM, we have a special application to share information with the website and we also use it to make our catalogues.”

Catalogues? Do they still exist?
“Sure! They are an important marketing and information feature because people can easily start exploring with catalogues. In addition, with a web shop, you can’t make it clear that your company has a wide range of choices, whereas the thick catalogue always creates that idea. Another positive is that clients start looking online when they are already in an order process, whereas the catalogue is looked at during lunch or coffee, just to have a little browse. This has an inspirational value.”

With which platform do you realise international online sales?
“We use Intershop. It is an internationally powerful B2B platform that makes it easy to manage different situations in different countries, e.g. when it comes to pricing, VAT or shipping costs. We thought the risk of taking an open source platform was too big for us. Intershop makes each international step faster and easier, and we can open in new countries without any problems. We integrate our catalogue, Syncforce and all client data and prices (SAP) with the Intershop platform.”

How do you manage international differences?
“In each country, there is a marketing expert who also advises on the local assortment. The assortment differs per country, and the registration for products might also be different. On top of that, we see that the acceptance of internet as a B2B purchase channel varies from country to country. In Germany, internet usage is sometimes very low, so we suggest to our farmers to try ordering online, but we never push them to change their habits. For us, there is no difference in which channel they use.”

In which way do you use online marketing as a tool?
“We carefully weigh with which kind of customer we are interacting with. Smaller clients are often sensitive to promotions, special offers, that we can put online. They constantly weigh us against the competition. Larger companies have a different relationship with us: we talk about solving problems and we build a different kind of trust and long-term collaboration. The website becomes an ordering tool. We know that the farmers need time for their work, so we don’t want to steal it. We make appointments for real discussions about optimising operations, and shopping can easily be done via our online services, even after working hours if the client wishes. One of the most important questions was how can we better facilitate our customers by offering a 24/7 self-service portal. In order to accomplish the goal of showing the customer as much of the information possible relevant for the customer individually, we needed to make information from the SAP ERP system available in a ‘My Account’ section on the webshop. This was realised through a synaptic integration between Intershop and the SAP-system used by Schippers. We also make increasing use of social media; Facebook is regularly used by farmers and we have already accumulated 10 000 likes in about 10 months. We also get questions there from all over the world, which has already clearly increased.

Is it difficult to make customers trust online markets after years of ordering from a catalogue?
“The most important factor here is reassurance. If you send a good order confirmation, you already win a lot of trust.”

How do you deal with marketplaces like Amazon or Alibaba, which may compete with you on certain levels?
“They are active in certain overlapping sectors, yes. We don’t use marketplaces like Amazon and Alibaba for our sales. For the future, I could imagine it would be interesting to grant other, third-party suppliers access to our marketplace and client base. But we would then keep everything under our name and brand identity. However, we would not like to engage in drop-shipping models, because it distracts our clients from their work if they have to leave the stable for multiple deliveries. In our checkout process, you can always bundle your products to a single delivery. But if we can arrange it in a way that suits us, developing towards a marketplace model is surely an option.”

And other continents, such as China for instance?
“There are cultures where our products simply meet a much lesser demand. In China, livestock farming is not at a level that structural hygiene and an anti-antibiotics policy as advocated by us, are something people are looking out for. But who knows what the future brings. Martien Schippers always said the Netherlands is- as far as the farming industry is concerned- a good indicator of what will happen elsewhere in the future.”