Legacy distributor Wolf uses a techie concept, also does business the old-fashioned way
Its goal is to enable independent dealers to beat Lowe's and The Home Depot on product quality and price and capture a greater share of the American building materials market.
But York-based building materials distributor The Wolf Organization Inc. doesn't spend a lot of time talking about the specific features of cabinets or decking it will be supplying in five years, Chairman and CEO Tom Wolf said.
The focus instead is on refining processes and infrastructure to immediately respond to what the market wants, and to know in real-time exactly what customers demand in terms of price, quality and even colors.
This includes Wolf itself leading the development and deployment of a product as quickly as possible whenever the right offering isn't already available through its channels.
"Relevance is our goal," Wolf said.
Already, the exact specs of newly developed Wolf-branded cabinets and made-in-America marketing have evolved during the development process through dealer, manufacturer and customer feedback.
As applied to the Internet, the crowd sourcing and sharing process is known as Web 2.0, said Amy Kenly, director of social media and analyst relations for Ohio-based management consulting firm Kalypso.
But there is a parallel model called Enterprise 2.0 in which companies seek out more secure infrastructure, such as intranets, with its partners to get the job done, she said.
Many firms increasingly are looking to more collaborative methods for new product or service development, said Kenly, whose firm focuses solely on advising clients on product development and innovation.
The process, called social product innovation, shouldn't be confused with simply using social media in place of an aspect or two of the old development model, she said.
One person in the company gathering comments from Facebook instead of organizing an in-person focus group isn't enough to be successful, Kenly said.
It's about bringing as much collaboration, sharing and feedback as possible to all parts of the process — regardless of what technology employees use, she said.
Wolf historically has operated in a traditional two-step format. It would buy in bulk from manufacturers who designed and marketed their own products.
Then it would break down shipments into smaller loads and sell them to retailers, including independent lumber yards and kitchen design centers.
Status quo is no longer an option, so it is expanding on the model, Wolf said. At the same time, the bottom line is improving.
Wolf's pre-construction season commitments recently were up 60 percent compared with the same period in 2010 and gross profits were 25 percent higher in the fourth quarter compared with the year-ago period, the company said.
The firm also recorded its first profitable January in 10 years, it said.
Wolf has a Web and social media platform, but it also is doing it the old-fashioned way with in-person meetings, focus groups and other avenues, said Jim Groff, the company's executive vice president and chief marketing officer.
The company values data and insights from dealers. People often say they want one thing, but purchasing behavior says they want something else, Groff said.
There are limitations in available technology or there are applications Wolf isn't proficient in yet, and the company is trying to work through all of the potential issues, he said.
"We don't live in a frictionless world," Wolf said.
There is value in relying on a "retained, consistent group of experts" instead of just crowd sourcing the Internet, Kenly said.
Kalypso operates a social product innovation contest, and a recent winner was Ohio-based electric contractor supplier Madison Electric Products, she said.
It has an online community of contractors who submit ideas that Madison uses to decide on what new products or services it will offer, Kenly said.
Social product innovation concepts aren't necessarily new — everyone just used to call it partnering — but technology generally is enabling more of it to happen, she said.
"Now we have these tools that help make it easier and better," Kenly said.
Responding to market needs in real-time is one part of Wolf's effort. It also is completely committed to serving independent dealers with its strategy; consumers won't find its products in big-box stores, he said.
Another prong is working with streamlined manufacturers who concentrate on quality and keep prices in check, Wolf said.
For example, the Wolf Classic Cabinets line developed because imports had taken off in popularity, and Wolf and its dealers weren't getting in on the business, Groff said.
So the company went to dealers and asked exactly what customers who gravitated toward those products were looking for, and it sought out focus groups and other forms of end-user feedback, he said.
Wolf then put out a request for proposals to manufacturers around the world asking for specific quality, prices, colors and designs, Groff said.
The manufacturer with the winning bid became the contract producer for the new Wolf cabinet brand, which Wolf now sells to dealers and helps to market to buyers, he said.
"The line was designed entirely by our customers," Groff said.
The cycle of dialogue continues, and Groff said to expect enhancements to the cabinet line as early as later this year.
Also, Indiana-based Kountry Wood Products came back with the best proposal, so Wolf now is using made-in-America marketing, Wolf said. That wasn't something they committed to in the beginning, he said.
"It wasn't us who created the buzz about 'Made in America,'" Wolf said. "It was manufacturers who showed us that they can compete."
Wolf also is honing in on a specific group of buyers from which it can help its dealers take market share, Groff said.
Contractors building new houses already tend to favor independent dealers — and Wolf continues to serve their needs — and homeowners buying tools or taking on small projects are strongly in the big-box camp, he said.
Remodeling contractors or serious do-it-yourselfers are prone to choosing one of the independent dealers with which Wolf works, but they also could pick a big-box retailer, Groff said.
"The battle is in the middle," he said.