Ag retailers might want to reexamine how to better attract and retain customers via Web-based tools. According to experts from Purdue University, more farmers are logging onto the Internet each year to find information about products and services that could ultimately result in sales.

Tom Henry, a North Dakota small grains and oilseeds producer, is just one potential buyer. Henry says that he regularly purchases farm clothes, boots and various tools over the Internet and would consider buying more expensive products online, depending on what retailers are offering and where they're located.

“I've shopped for a tractor on the Internet, and I ended up buying it from the dealer where I found it online,” says Henry, who farms near Westhope, in the north-central part of the state. “I also [comparison] shop chemicals and fertilizer online, but I still buy through my local dealers. I like to support my local businesses as much as possible, even though I might have to pay a little extra to do that.”

This producer's Internet experiences and attitudes are fairly representative of many others, says Christine Wilson, agricultural economist, Purdue University. “Most consumers still want to see and touch the product or talk to someone in person before buying,” she says. “They may look online for prices and to comparison shop, but they'll typically go to their local dealer to make a purchase, especially for an expensive product.”

Although it's rare for a farmer to buy something as expensive as a new tractor over the Internet, what farmers learn as they search online will still influence their purchasing decisions, Wilson says. It's best to make a good first impression online in order to attract face-to-face business later.

A bad first impression online will likely sour potential sales, Henry says. “When I first hear about a new product, service or company, the first thing I do is to go to their Web site,” he says. “If they don't have one, if it doesn't impress me, or most of all, if it is severely out of date, it really raises my guard about the company or the product.”

Ag retailers that want to initiate online purchases from farmer-customers should start by offering low-priced products first, Wilson advises. “It's best to get farmers in the habit of buying online by starting with smaller, less expensive items,” she says. “Once farmers become accustomed to the Internet and have used it successfully to make a small purchase, they are then more willing to purchase expensive items over the Internet.”

Whether it's a big purchase or a small one, a buyer's first online purchasing experience should be a good one, Wilson emphasizes. “A poor experience will negatively impact that person's willingness to try it again,” she says.

E-businesses initially failed to attract many farmers and rural customers, partly because of spotty Internet services, Wilson says. “Many rural areas lacked high-speed Internet access when most agricultural-related e-businesses were first launched, or they lacked Internet access completely,” she says. “However, as more high-speed Internet services have become available in rural areas, more and more farmers have been using the Internet to find information and to make purchases.”

Currently, many rural consumers feel comfortable buying expendable items online, especially if they've purchased those items before and know what they're getting, Wilson says. Office supplies or small parts that routinely need to be reordered for machinery maintenance are some examples of expendable items that farmers might already be buying online.

Heating oil, diesel fuel, fertilizer or crop protection products might be other items that ag retailers could offer customers online, Wilson says. “Most people are willing to do their reordering over the Internet, but [retailers] aren't going to be as successful selling new products online compared to products that are performance tested,” she says.

Seed reorders might be another possible service that ag retailers could successfully offer online, Wilson suggests. “For example, if a specific hybrid performed well for a farmer last year, they would typically be willing to reorder that product online this year,” she says.

However, most seed will continue being sold through a storefront or through farmer-dealers, says Jay Akridge, agricultural economics professor, Purdue University. “Where an electronic portal creates value, it creates a nice niche. In general, though, it won't replace retail distribution,” he says.

The majority of input products will still move through conventional channels, Akridge emphasizes. Yet he also affirms that “e-business can help create convenience for some purchases, and e-business approaches can certainly complement conventional channels.”

One reason that the Internet won't replace conventional channels for ag input sales is that seed and crop protection products typically require a sales force with a high degree of technical expertise, says Larry Schermerhorn, vice president of farm supply for the Country Operations division of Minnesota-based CHS Inc. “There are a lot of growers who are using the Internet as a price discovery source or an information source right now,” he says. “However, those who buy online don't typically receive the service package that they'd get if they purchased from dealers.”

As a result, CHS is focused on connecting with customers as much as possible through technically trained employees, whether over the phone, in person or online, Schermerhorn says. “For example, our growers may go to their local co-op Web site to discover the price of fertilizer,” he says. “While they're online, they can stop to read what their local agronomist is saying about disease outbreaks on that particular day.”

Still, not every location has the resources to offer good, timely sales and information services online. “We're trying to do more with fewer employees, and the Internet helps keep our experts connected with their customers,” Schermerhorn says, “but the key is having an employee on site that lives and breathes those things and is able to provide the updates and fulfill farmers' needs.”

Electronic newsletters are helping farmers to stay current on new agricultural products, marketing and production issues, says Henry, who adds that he appreciates his local co-ops for regularly offering those services. “The SunPrairie Grain e-newsletters come out at least monthly, and they have sections from each of their managers on agronomy, fuel and seed issues,” he says. “I find those to be a really good read. In addition, our local co-op e-mails me grain prices daily, and I always take a look at them. I try to subscribe to as many of those online informational services as possible.”

Although online information services may not directly affect sales in a measurable way, they can help significantly to maintain relationships with customers, Akridge says. “In agriculture, e-business hasn't worked as originally envisioned,” he says. “However, the Internet is really coming into its own to facilitate a relationship with the customer who wants to communicate via e-mail or finds it a convenient way to source information.”

A few firms have found a niche by selling seed and crop protection products online, and some firms now use the Internet on a regular basis to place fuel orders, Akridge adds. “However, in most cases the Internet is still only used as a communications tool, a way to maintain contact with customers,” he says.

Some businesses establish Web sites but don't attract much traffic because they don't offer much value, Akridge notes. He adds, however, that those Web sites and e-newsletter that do offer value have the greatest potential to maintain current customers and to drive others to their storefront.

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