Fastenal relies on digital for long-term growth

Customers of Fastenal Co. want more flexibility to order via multiple digital channels including a self-service web shop, vending machines and vendor-managed inventory systems. The industrial and construction supplies distributor says it will continue on its course of expanding its digital sales capabilities.

Fastenal announced its fourth quarter and full-year financial performance,  stating that the data created through their digital capabilities enhances product visibility, traceability, and control that reduces risk in operations and creates ordering and fulfillment efficiencies for both themselves and their customers.

In a Q4 and year-end earnings call, Fastenal executives elaborated on the value of each of its digital channels including its FASTVend vending devices and FASTBin product bins, each of which Fastenal embeds with digital technology to track product sales; and what Fastenal defines as ecommerce, including self-service online purchasing via Fastenal.com and electronic transactions conducted through EDI.

They also clarified during a Q&A period with investment analysts that the FASTVend and FASTBin services do not cannibalize Fastenal’s self-service ecommerce sales.

Dan Florness, president and CEO, noted that ecommerce sales have steadily climbed as a percentage of total sales, rising to about 25% in 2023 from about 5% several years ago.

For the fourth quarter, Fastenal said that all digital sales, including ecommerce and the FASTVend and FASTBin transactions which in aggregate make up what Fastenal calls its “digital footprint” accounted for 58.1%, or $1.02 billion, of $1.76 billion in total net sales. That’ s up  from 52% a year earlier. Fastenal didn’t break out total digital sales for all of 2023.

Fastenal also said that its digital purchasing options play a vital role at its Onsite vendor-managed inventory locations, which it manages at or near customers’ facilities. The company said it increased its number of Onsite locations by 12.3% last year to end 2023 with 1,822 active sites.