Distributors show promising mid-year digital sales
2022 won’t be a breakout year in digital sales for the six public bellwether distribution companies that break out actual or at least some ecommerce metrics — Fastenal, Global Industrial, MSC Industrial Supply Co., MRC Global Inc., W.W. Grainger Inc. and Watsco Inc. But it will accelerate a shift that makes it an even bigger priority to serve an increasingly digital-first customer.
Digital sales, or sales that occur through ecommerce, electronic data interchange, e-procurement, and marketplaces, for many of these bellwether public distributors is now the (or close to becoming) dominate sales channel.
MRC, distributing pipe, valve and fitting products and services to the energy and industrial markets, says ecommerce accounted for 48% of total $848-million sales in the second quarter ended June 30, compared with 40% in the second quarter of 2021. That’s a 23.6% increase from $686 million in the second quarter of 2021.
At Grainger, sales for the first half of 2022 grew to $7.48 billion. That’s up 19% from $6.29 billion between January 2021 and June 2021. In recent years, Grainger has said B2B ecommerce represents about 60% or more of total sales.
A big ecommerce growth driver for Grainger so far this year is Zoro.com, a web-only MRO products distributor. Zoro.com posted a 23% year-over-year gain in second-quarter sales as it expanded its numbers of registered customers and SKUs.
MSC Industrial, the metalworking and industrial products distributor, reported record fiscal third-quarter revenue for the period ended May 28. A 13.8% year-over-year increase in ecommerce sales helped drive 10.7% growth in total net sales. That brings sales up to $959 million. MSC is focusing growth strategies on digital operations.
Watsco Inc., one of the biggest distribution companies in the heating, ventilation and air conditioning market, believes its digital technology base is the best way to keep in step with the times. For the quarter ended June 30, Miami-based Watsco reported sales of $2.13 billion. That’s a 15.1% increase from sales of $1.85 billion for the second quarter of 2021. B2B ecommerce now represents about 33% of Watsco’s total sales, and its online channel grew 25% in the second quarter, the company says.
Digital commerce is vital to distributor Global Industrial’s sales and getting more so, says CEO Barry Litwin. Global Industrial sales for the second quarter ended June 30 increased 16.8% year over year to a record $318.5 million. Global Industrial does more than half of its customer transactions through digital commerce. For the first six months of 2022, total sales grew to $607.1 million. The company sells more than 1 million SKUs of maintenance, repair and operations (MRO) products.