D.G. Macpherson, chairman and CEO, W.W. Grainger Inc.

D.G. Macpherson, chairman and CEO, said on an earnings call today that the Endless Assortment business — which offers online sales without the full-service approach Grainger provides through its High-Touch Solutions via sales teams and Grainger.com — nonetheless expanded its presence last year with large as well as small and midsized customers. He added that Zoro was also updating its product assortment to improve what Grainger says had been an “unfavorable product mix” that led to a drop in Q4 gross profit margins.

W.W. Grainger Inc. is No. 11 in the Top 1000. The database is Digital Commerce 360’s rankings of the largest online retailers in North America based on annual web sales.

Grainger online sales

“The Zoro team has progressed on their strategy, expanding their assortment, attracting new customers and improving B2B customer retention,” he said.

Zoro’s Q4 sales rose 2.3% year over year to $264 million. MonotaRo’s Q4 sales increased 7.8% to $438 million. Combined Endless Assortment Q4 sales increased 6.0% to over $700 million.

Grainger’s total sales increased in Q4 by 5.1% to $3.997 billion and for the full year by 8.2% to $16.5 billion.

Macpherson added that Zoro continued to focus on a strategy of presenting a personalized product assortment, assessing price competitiveness, and “proactively communicating delivery times to highlight where we are advantaged.”

Regarding Monotaro.com, Macpherson said “they seem stronger with enterprise customers [and] continue to expand with small and midsize customers and are gaining operating leverage as they ramp into their distribution center in Davos.”

He added, “In January, I had the opportunity to visit MonotaRo and I was able to see that MonotaRo was supported by a tight partnership between the U.S. supply chain organization and the Japanese counterparts.”

In Q4, Endless Assortment “growth was driven by B2B customers across the segment as well as enterprise customer growth at MonotaRo, which was partially offset by declining sales to non-core, consumer-like customers at Zoro,” Grainger said.

Zoro added about 2 million SKUs in 2023, ending the year with 13.1 million, an 18% increase. It also counted at year’s end 5.17 billion registered users; MonotaRo counted 9.02 million.

Expanding DC space 35%

Grainger also announced today plans to open a 1.2-million-square-foot distribution center this spring in the Houston suburb of Hockley, Texas. Grainger says the new facility will house more than 250,000 industrial supply items, ranging from power tools to power transmission equipment, and employ about 400 people following its 2026 opening.

The Texas facility will follow the launch of two other distribution centers in Pineville, North Carolina, which is scheduled to open later this year, and in Gresham, Oregon, scheduled for 2025. Overall, Grainger says it is adding 3.5 million square feet of warehouse space, a companywide increase of 35%.

“These latest investments will strengthen our promise to customers who count on us to provide next-day complete orders to keep their operations running,” Macpherson said on the earnings call.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s W.W. Grainger report.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan. Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

The post Grainger sees stronger sales ahead for its online-only businesses appeared first on Digital Commerce 360.

Holden Lewis, senior executive vice president and chief financial officer, Fastenal Co.

At the same time, Fastenal will use the data it compiles through digital channels to improve its ability to serve customers and operate more efficiently, Fastenal said yesterday in announcing its fourth quarter and full-year financial performance.

“The data that is created through our digital capabilities enhances product visibility, traceability, and control that reduces risk in operations and creates ordering and fulfillment efficiencies for both ourselves and our customers,” the company said yesterday in announcing its fourth-quarter and full-year 2023 financial performance.

It added: “As a result, we believe our opportunity to grow our business will be enhanced through the continued development and expansion of our digital capabilities.”

Fastenal digital channels

In a Q4 and year-end earnings call yesterday, 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.

“The customers are looking for a range of solutions to solve different [purchasing] issues,” said senior executive vice president and chief financial officer Holden Lewis.

Fastenal Q4 and year-end results

Daniel Florness, president and CEO, Fastenal Co.

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.

“We arm that Onsite with all the tools we have in place, whether it be vending machines or technology-embedded bins … it’s just a much more efficient way to operate,” Florness said on the earnings call.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Fastenal Co. report.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan.

The post Why Fastenal sees digital as key to long-term growth appeared first on Digital Commerce 360.

MSC Industrial is a prominent metalworking and maintenance, repair and operations (MRO) products distributor. It said yesterday that ecommerce sales grew 1.8% year over year to $603.7 million for the fiscal first quarter ended Dec. 2. That increase compares to slack total Q1 sales, which slipped 0.4% to $957.7 million.

MSC Industrial said its ecommerce sales helped to partially offset offline sales declines tied to soft demand caused by striking auto industry workers and other factors.

Two principle ways to unlock growth

On an earnings call with stock analysts this week, Gershwind noted that MSC has prodded ecommerce sales with “two foundational priorities for unlocking growth — realigning our public-facing pricing and implementing a new product discovery functionality on our website.”

“With respect to pricing, our goal is to provide market competitive prices to smaller customers, while remaining roughly gross-margin neutral to better discounting,” he said. “We are currently 30% of the way through the realignment, and we’re on track to achieve that goal.”

“We’re seeing encouraging early indicators, such as improved web conversion rates and more favorable levels of growth,” Gershwind said. He added, “The goal is to create a market competitive price for any customer that wants to come to us.”

Gershwind also said MSC expects to complete the deployment of its new product discovery platform before the end of the current fiscal quarter in March.

“We will more aggressively market the pricing and the web improvements in the back half of our fiscal year,” he said, adding, “These efforts will allow us to significantly expand our share of wallet across our customers.”

In other developments, Gershwind said MSC was moving ahead with multiple environmental, social and governance improvements, including:

• Recycling over 20,000 pounds of carbide since 2021 through its regrinding services.
• In fiscal 2023, recycling 1,500 tons of corrugated packaging and enabling MSC’s customers to reduce electricity consumption by 32 million kilowatt hours.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s MSC Industrial report.

Sign up:

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan.

The post MSC Industrial ecommerce sales surpass $600 million in Q1 appeared first on Digital Commerce 360.

But even though the company’s core ecommerce business units did well, there was some softening around the sales channel because of a slower business economy.

“Within the Endless Assortment business, while we continue to see a softer demand environment, we remain focused on acquiring new customers and improving repeat purchase rates across the segment,” CEO D.G. Macpherson told analysts on the Q3 earnings call, according to a transcript from Seeking Alpha.

Grainger operates various digital sales channels. Web-only sales in its Endless Assortment segment grew in the third quarter. Endless Assortment’s segment includes Zoro.com in the United States and Japan-based MonotaRo.com.

W. W. Grainger Inc. is No. 11 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest online retailers in North America by web sales.

W.W. Grainger sales Q3

Overall sales for the fiscal third quarter ended Sept. 30 grew to $4.288 billion. That’s up 6.7% from $3.94 billion in the third quarter of 2022. Net income was $493 million compared with $442 million in the prior year.

Endless Assortment segment grew 4.3 % in the third quarter to $732 million. That’s up from $701 million in Q3 of 2022.

The company’s High Touch business grew to $3.403 billion. That’s up 7% year over year from $3.180 billion. The business segment includes full-service sales through the company’s U.S. flagship Grainger.com, Canada-based Grainger.ca, and its sales agents.

“The High-Touch Solutions segment continues to perform well, with sales up 8.5% in daily constant currency underpinned by growth across all geographies,” says chief financial officer Dee Merriwether.

Zoro and MonotaRo

Despite the growth in sales, softer business spending is impacting growth in some digital sales channels, Grainger says.

“At the business level, while we’re seeing some signs of macro-related softness at MonotaRo, the business still drove strong growth with new and enterprise customers and remain focused on growing repeat business with its core B2B customer,” Merriwether told analysts. “At Zoro, results reflect a continuation of headwinds discussed last quarter, with tough prior-year comp decline, a noncore B2C volume and a slowing macro environment all contributing to more muted top line growth. Noncore B2C customer performance was down nearly 20% year-over-year as we continue to focus our growth efforts on stickier B2B customers.”

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s W.W. Grainger report.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan. Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

The post Grainger grows Q3 web sales slowly but surely appeared first on Digital Commerce 360.

The metalworking and industrial supplies distributor said sales increased 8.6% year over year to $4.009 billion. And that happened even though MSC Industrial ecommerce sales, which account for more than 60% of total sales, slid by 3% year over year in the fiscal fourth quarter. Gershwind attributed the drop in digital sales mainly to public sector sales occurring in non-ecommerce channels.

Kirsten Actis-Grande, executive vice president and chief financial officer, MSC Industrial Supply Co.

MSC Industrial ecommerce sales

Full-year MSC Industrial ecommerce sales, however, rose 9.1% to $2.45 billion. Gershwind and Kirsten Actis-Grande, executive vice president and chief financial officer, said they expect to see improved ecommerce sales, especially as MSC rolls out upgrades to the company’s flagship ecommerce site, MSCDirect.com.

“Looking forward, we expect improvement in our ecommerce sales, particularly through MSCDirect.com, as we start rolling out enhanced capabilities, including improved search and navigation functions,” Actis-Grande said on a Q4 earnings call with investment analysts today.

Gershwind added that the “heavy-lifting” on ecommerce improvements have already been completed and that the ecommerce upgrades will occur “over the next quarter or so. … That’s when customers will begin seeing an impact.”

Still, he cautioned that the impact of better ecommerce technology will not be like turning on a light switch.

“This will build over time,” said, adding: “It is one of the things, though, that gives us confidence beyond this year.”

MSC Industrial defines ecommerce sales as those through digital channels including its ecommerce platforms, internet-connected vending machines, EDI, XML-based ordering systems and other electronic portals. MSC’s formal corporate name is MSC Industrial Direct Co. Inc., but it generally goes by the name of its main business unit, MSC Industrial Supply Co.

MSC Industrial earnings

For the fourth quarter ended Sept. 2, MSC Industrial reported:

• Total net sales rose 1.3% year over year to of $1.035 billion.
• MSC Industrial ecommerce sales fell about 3% to $627.1 million, accounting for 60.5% of total sales.
• Gross profit margin of 40.5%, down from 41.9%.
• Net income fell 15.9% to $87.623 million.

For the fiscal year, MSC Industrial reported:

• Gross profit margin of 41.0%, down from 42.2%
• Net income inched up 1% to $343.23 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s MSC Industrial report.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at mark@digitalcommerce360.com and follow him on Twitter @markbrohan.

Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.   

The post MSC Industrial surpasses $4 billion in sales appeared first on Digital Commerce 360.

Dan Florness, president and CEO, Fastenal Co.

He added that the industrial and construction products distributor is eyeing a larger digital share of total sales by the end of this year. Florness said he expects the growth trend to continue over the long term.

“Our challenge … is targeting 60% sometime before we exit this year,” Florness said. “And our long-term expectation is at that 85% we talked about in the past that we believe will be part of our digital footprint.”

Understanding Fastenal digital sales

Fastenal defines its digital footprint as the combined total of sales processed through ecommerce and Fastenal Managed Inventory programs. Those include FastStock, FastBin, and FastVend vending machines, which use digital technology to record transactions and reorder stock.

The company includes under ecommerce sales transactions on Fastenal.com. It also includes those through EDI and other types of technical integrations between Fastenal and its customers. Ecommerce transactions grew 41.3% in the quarter to $452.25 million, or 24.5% of total sales.

Overall, digital sales along with an increase on Fastenal’s onsite inventory-management services at customer locations helped to hit record sales figures.

“Here in the month of September, we broke $30 million in sales per day for the first time in our history,” Florness said on the earnings call.

Fastenal added in its Q3 press release: “We believe our opportunity to grow our business will be enhanced through the continued development and expansion of our digital capabilities.”

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Fastenal Co. report.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at mark@digitalcommerce360.com. Follow him on Twitter @markbrohan. Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

The post Fastenal’s Q3 digital sales come in at 57% of total sales appeared first on Digital Commerce 360.

W.W. Grainger sales Q2

For the second quarter ended June 30, Grainger grew sales to $4.18 billion. That’s up 10% from $3.83 billion in the second quarter of 2022. Net earnings were $490 million vs. $389 million in the year-ago period.

Grainger, a prominent maintenance, repair, and operations (MRO) products distributor , also reported good results in its various digital sales channels. Web-only sales in its Endless Assortment segment, including Zoro.com in the United States and Japan-based MonotaRo.com, grew 4.5 % in the second quarter. That’s up to $751 million from $719 million in Q2 of 2022.

Grainger is No. 11 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest online retailers in North America by web sales.

Zoro and MonotaRo

The company’s High Touch business grew to $3.355 billion. That’s up 10% year over year from $3.053 billion. The business segment includes full-service sales through the company’s U.S. flagship Grainger.com, Canada-based Grainger.ca, and its sales agents.

“We continue to see strong results, with daily sales up 19.4% compared to the third quarter of 2021,” says chief financial officer Dee Merriwether. “We saw a broad-based double-digit growth across all geographies and over 20% growth with both midsized and large customers in the U.S.”

Grainger also continues to build out its Endless Assortment business, she told analysts on the Q2 earnings call.

“We show the continued growth of the Zoro SKU portfolio, now at over 10.3 million SKUs. You’ll see a more modest increase between the second and third quarter as Zoro is offering SKUs that could not meet our service level expectations,” Merriwether said. “We continue to target around 2 million SKU additions in 2022 and have a robust pipeline to meet that goal as we finish the year.”

In general, Grainger sees slowing business in some industries. But it says diversity in the customer base it serves will keep sales growing.

“We continue to experience a dynamic market, with some industries still on the upswing, some that are stabilized, and others that are trending down,” says CEO DG Macpherson. “And while our customers will face different levels of impact as we navigate through this inflationary period, we know that Grainger wins because of our ability to add tangible value to our customers’ operations through inventory management, digital solutions, and product substitutes.”

Check back for more earnings reports.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at mark@digitalcommerce360.com. Follow him on Twitter @markbrohan.

Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

The post Digital diversity drives Grainger sales growth in Q2 appeared first on Digital Commerce 360.

But MSC Industrial seems to take the downturn in stride. It talked prominently on its third quarter earnings call about strategic plays and why the company is boosting its investment in digital transformation and commerce.

MSC Industrial is “accelerating investments in our ecommerce platform, including an advanced search and product discovery function,” CEO Erik Gershwin told analysts. “We expect these enhancements to increase future growth, particularly with smaller customers and spot buys.”

MSC did not say how much it was investing in new digital technology and initiatives. But during fiscal Q3, MSC Industrial ecommerce sales accounted for about 60% of all sales. Based on that metric, Digital Commerce 360 estimates ecommerce sales totaled $634.5 million in the third quarter. In comparison, total sales grew to $1.054 billion. That’s 10% year over year growth from $958.6 million in the prior year. Net income for the Q3 fiscal 2023 was $95.2 million compared with $99.7 million in the previous year.

MSC Industrial ecommerce sales

As a percentage of total sales, MSC Industrial ecommerce sales declined year over year to 60%. But they would have increased over the prior year’s 62% if not for public sector growth that transacted through different channels, chief financial officer Kristen Actis-Grande said.

“Looking ahead, we are positioning ourselves to capture additional digital and small customer growth with a portion of our accelerated investments being focused on strengthening our digital capabilities,” Actis-Grande said.

In April, MSC became the exclusive ecommerce distributor of metalworking and maintenance, repair, and operations (MRO) products to customers of machine tools marketplace and data platform MachiningCloud, the companies said today.

MachiningCloud is an internet software platform for more than 100,000 users. It launched in 2020 and is involved in the sales of industrial machining tools from more than 50 brands.

Among those brands are:

• Kennametal
• 3DLive
• Fullteron Tool Co.
• Ingersoll Cutting Tools
• Jergens

It expects to have more than 200 brands by the end of this year.

“This partnership brings a great deal of excitement to MSC, to MachiningCloud, and to the end-user community,” Gershwin told analysts. “It gets MSC closer to the early stages of the manufacturing process, which expands MSC’s reach to new decision-makers, such as engineers and programmers who are key influencers in the procurement process. The customer will benefit from MSC’s brand offering, which will save time and money when selecting the ideal tools needed for their jobs.”

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at paul@digitalcommerce360.com and follow him on Twitter @pdemery.

Follow us on LinkedIn and be the first to know when Digital Commerce 360 publishes B2B News content.

The post Despite a dip, MSC Industrial keeps doubling down on ecommerce appeared first on Digital Commerce 360.

Fastenal includes in its digital footprint all transactions through its FMI vendor managed inventory programs and the portion of its separate ecommerce sales “that do not represent billings of FMI services.” FMI includes sales through Fastenal’s FASTStock, FASTBin and FASTVend programs, which incorporate scanning, RFID, and internet- vending devices, respectively.

Dan Florness, president and CEO, Fastenal Co.

Dan Florness, president and CEO, said on a Q2 earnings call today that he sees a digital footprint even larger than 55% of net sales.

Fastenal boosts digital to 65% of sales

“We think we can get that to about 65%,” he said, adding, “A good chunk of that is converting existing customers” to digital sales and FMI services.

Florness added that Fastenal is realizing new ways that its digital services can bring more value to customers while also making the distributor’s operations more efficient.

He noted that, in addition to using digital FMI programs to automatically replenish warehouse bins of fasteners and other Fastenal products, customers are also using them to automatically replenish pallets, saving them trouble of reordering them.

“That is winning us business,” Florness said.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at paul@digitalcommerce360.com and follow him on Twitter @pdemery.

Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.

The post Fastenal’s Q2 digital sales top $1 billion appeared first on Digital Commerce 360.

The company is already forging ahead pretty well on the online front.

WD-40 doesn’t break out ecommerce sales, but it says for its fiscal third quarter ended May 31, ecommerce sales surged more than 35% year over year. By comparison, total net sales grew 15% to $141.7 million.

Steve Brass, president and CEO, says the company’s ecommerce strategy, however, is about more than just driving up quarterly sales.

Steve Brasss, president and CEO, WD-40 Co.

“It’s also about driving awareness of our brands and teaching our end users how to use them,” he said on a Q3 earnings call, according to a transcript from Seeking Alpha.

Brass also identified three other “must-win” battles as:

• Expanding sales globally.
• Selling more premium products (including cans of its popular WD-40 multi-use lubricant).
• Developing more sales of its high-end WD-40 Specialist brand.

The company’s products are often used to lubricate, de-grease, clean and extend the life of mechanical metal products used in factories and other business locations as well as homes.

Expanding through ecommerce and online marketing supports that overall growth, Brass said. He added that WD-40 “recently launched our first global online marketplace campaign that puts 30-plus markets under one message: ‘Repair, Don’t Replace.’”

The company has said its sharpest growth is via ecommerce sales through such business-to-business ecommerce sites as Grainger.com, MSCDirect.com, GlobalIndustrial.com, Fastenal.com and MotionIndustries.com and such online retailers as Amazon, Ace Hardware and Aubuchon Hardware.

“Our global digital ambition is to engage with end-users at scale, becoming the global leader in our category on the digital platforms they use, making it easy to access, learn about, and purchase our brands online” — and “creating positive lasting memories online,” the company says.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at paul@digitalcommerce360.com and follow him on Twitter @pdemery.

Follow us on LinkedIn and be the first to know when new we publish Digital Commerce 360 B2B News content.

The post WD-40 Co.: Digital commerce is a “must-win battle” appeared first on Digital Commerce 360.