Last year, MSC Industrial Supply Co. took broad steps to bolster its digital technology and operations, hiring its first chief digital officer and investing in ecommerce improvements.

That strategy is already paying off in digital commerce figures reported for the fiscal 2023 first quarter, which ended Dec. 3, CEO Erik Gershwind said yesterday. Q1 ecommerce sales grew 15.6% year over year to $592.9 million and accounted for 61.9% of total sales.

John Hill, senior vice president and chief digital officer, MSC Industrial Supply Co.

MSC — a prominent distributor of metalworking and maintenance, repair and operations (MRO) products — is no stranger to strong digital sales, which have routinely accounted for well over half of total sales in recent years. Q1 ecommerce reached nearly 62% of total sales, and, under MSC’s new chief digital officer, John Hill, the company is laying the groundwork for continued growth in digital sales.

“John Hill and his team have completed a comprehensive review of our entire digital offering and have built a roadmap for our evolution in the space,” Gershwind said on a Q1 earnings call, according to a transcript from Seeking Alpha.

Improving the customer experience

“For example, in ecommerce, recent work is focused on improving the customer experience on our website by enhancing product discovery, and enriching product data. This investment is producing early returns as ecommerce sales grew mid-teens in the first quarter.”

(Hill will give a keynote address on MSC’s B2B digital strategy at EnvisionB2B 2023 on June 22 in Chicago.)

Gershwind also noted that MSC’s internet-based “vending machine revenue grew in the mid-teens and now represent over 15% of total company sales.”

MSC laid the groundwork in Q1 for more growth through vending machines and other digital technologies.

“Our capital expenditures were $26 million in the first quarter and included elevated vending installations, new warehouse automation, and continued investments in digital,” said Kristen Actis-Grande, chief technology officer. She added that MSC expects to spend “in the range of $70 million to $80 million” overall on capital expenditures in its 2003 fiscal year.

MSC, whose corporate parent is MSC Industrial Direct Inc., defines ecommerce as all sales transacted through its ecommerce platforms, including MSCDirect.com; vending machines, vendor-managed inventory systems, electronic data interchange, XML-based ordering systems, and other hosted systems and electronic portals.

For its first fiscal quarter ended Dec. 3, MSC reported:

• Ecommerce sales increased 15.6% to $592.9 million, accounting for 61.9% of total net sales;
• Total net sales increased 12.9% to $957.7 million;
• Gross profit increased 12.8% to $397.8 million for a profit margin of 41.5%;
• Net income increased 22.6% to $81.2 million.

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