Klöckner opens up online shop to third parties

Klöckner & Co keeps widening its efforts to promote digitalisation and online retail with a new strategy. It will allow third party vendors to sell steel on its online platform, it confirms. A trial period to that effect with candidate vendors is being carried out in the first half of 2017.

“We want to open up to competitors which could complement us, either regionally or in terms of products,” ceo Gisbert Rühl said at Klöckner’s annual press conference. The steel distributor also intends to widen its portfolio by adding products and services related to construction, he added.

Rühl has been pushing digitalisation systematically for the last couple of years, with 12% of Klöckner’s revenues now generated online, and a share of 50% targeted for 2019. The ceo emphasises that steel is not an easy product group to sell online. He tellsKallanish that a first attempt some years ago cost the company some €1.5 million ($1.6m), but that this was much lower than sums sunk by others in the industry in similar efforts.

One error in principle on that occasion was to offer too many products from the outset, which then became too confusing for customers to handle. “We then re-started with a narrow base of customers’ immediate requirements, and then kept building up,” says Rühl, outlining the concept. He notes that with the steel industry’s traditionally conservative nature, mills are especially “… slow players in this game.”

Regarding potential competition from outside the steel world, Rühl anticipates that Amazon or Alibaba will become players in selling steel. However, Klöckner is banking on a vertical set-up offering services tailored to the industry. “Amazon will be fine for the repair shop that needs the occasional [… steel] sheet, but if you need steel and process continuously, you will need a vertical platform like ours,” he adds.