But it will accelerate a shift that makes it an even bigger priority to serve an increasingly digital-first customer. For many of these bellwether public distributors — Fastenal Co., Global Industrial, MSC Industrial Supply Co., MRC Global Inc., W.W. Grainger Inc. and Watsco Inc. — digital sales are now the dominant (or close to becoming the dominant) sales channel. Digital sales are those that occur through ecommerce, electronic data interchange, e-procurement, and marketplaces.

For example, MRC is close to the day when 50% of all sales will be digital. MRC distributes pipe, valve and fitting products and services to the energy and industrial markets. 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. Based on those figures, Grainger’s total first-half ecommerce sales were about $4.49 billion. That’s up 21.9% from about $3.77 billion a year earlier.

Big distributors post strong digital sales halfway through 2022

And if the first six months of 2022 are an indicator of how distributor B2B ecommerce will fare for the rest of the year and into 2023, it will be steady to strong but not blockbuster.

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From late 1999 through 2001, B2B marketplaces went looking for love from B2B buyers and sellers. The resulting affair was short.

The idea was sound: Bring together diverse groups of buyers and sellers in a particular industry or market, and give them the online platform to do business en masse with each other.

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But the technology was inadequate to nonexistent, buyers and sellers on a wide scale were not interested, and competitive differences kept industry marketplace coalitions from working successfully together.

Fast forward to 2022, and B2B buyers and sellers are in love once more with marketplaces. And the feeling from marketplace operators is mutual.

The ongoing COVID-19 pandemic forever changed how buyers want to do business with ecommerce sellers. A younger and more online-oriented business buyer is primarily a digital-first customer. And where this rapidly growing audience wants to do business is online — and on marketplaces.

They are now the fastest-growing channel in B2B ecommerce, based on a market projection from Digital Commerce 360.

Consider these B2B marketplace facts:

• Three years ago, Digital Commerce 360 was following about 75 to 100 B2B marketplaces. Today, the B2B Marketplace 400 research report has metrics and analysis on 400 commercial and vertical of them spread across 18 industries.
• Sales on these marketplaces shot up 131% to $56.5 billion in 2021. And they are projected to increase at a similar pace to $130 billion in 2022, according to data in the B2B Marketplace 400 research report.

“Companies that were pre-digital before COVID-19 are getting more digital now,” says Tyler Ellison, CEO of ChemDirect. ChemDirect is a three-year-old marketplace. It links buyers and sellers of chemical products in a dozen industries ranging from automotive, paint and coatings to health care to building/construction, printing/packaging, and agriculture. “Millennials and Generation Z employees are moving into procurement management roles, and they are not checking their Amazon-like expectations at the door. They want the same user experience on the job they are accustomed to at home.”

No longer is the movement an on-again, off-again relationship. This time, the relationship among buyers, sellers and marketplaces is long-term and serious, and the chief reason B2B marketplaces are now a mainstream digital commerce business channel.

The B2B Marketplace 400 report describes in detailed data and analysis how the future of marketplaces is blossoming.

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Joshua Williams, director of digital and ecommerce marketing, Petra Industries

“We survey our customers regularly, so we had a good idea of what they wanted and how we could improve,” says Joshua Williams, director of digital and ecommerce marketing. “We had to go to the next level, and we planned to set a digital technology foundation for the next decade.”

The new ways it now serves its client retailers with a new ecommerce platform include: a faster way to onboard new customer accounts with approved credit, a more flexible and useful shopping cart, and a faster and more efficient order management and fulfillment system.

Petra is also working with an email marketing program more tightly integrated with customer records for personalized emails; it’s moving toward a site search application that filters results to customers’ interests; and it’s using a product information management system that provides more effective cross-selling with personalized product recommendations.

Goal: migrating nearly all customers to the web

For Petra, the new platform marks its first major overhaul of ecommerce technology it first deployed in 2009. After reviewing its digital commerce technology options, Petra in January 2019 deployed the OroCommerce platform, Commerce Cloud version, from Oro Inc.; the new website went live in September.

One of Petra’s overall goals is to get nearly 100% of its customers to place orders through its ecommerce site, up from about 60% today. Getting closer to 100% will take some work, Williams says, but he notes that the new platform provides a good base for migrating customers to the web.

“We’ve been focused on making improvements and fixing a few issues before we start to really push it out to our customers who are not buying online yet,” Williams says. He says he figures there will always be some customers who prefer to place orders directly with a sales rep, but Petra is also making digital applications, including mobile tools for checking customer order status and available inventory, to reps as well as customers.

“Oro is a good foundation to build out whatever we need on our ecommerce site,” Williams says. With the Commerce Cloud version, Oro hosts and maintains the website infrastructure.

The OroCommerce platform complements other technology developments Petra has made in the past year or so. In 2018, for example, it deployed a new web-based product information management system, or PIM, from Akeneo. The PIM is providing more detailed and accurate information, such as dimensions and color options, that its client retailers demand for making purchase decisions among Petra’s more than 15,000 SKUs, Williams says. Petra sources products from about 800 brands across 10 merchandise categories.

The OroCommerce platform integrates well with the Akeneo PIM as well as with other applications, Williams says. “Oro has an extensive suite of APIs that we use quite a bit to integrate with different applications,” he adds. APIs, or application programming interfaces, are sets of software instructions designed to provide an automatic exchange of data between disparate software applications.

A smoother way to register customers

But Petra also developed in-house its own data integration middleware that works with the Oro APIs to help the distributor build out a comprehensive commerce system.

For example, Petra is using its integration technology to connect its commerce platform to a Bectran customer credit management system from Bectran Inc. that it uses to register new online customers with approved credit. “Once our credit manager approves a customer, the system creates a customer account in our enterprise resource planning system and website login” application, Williams says.

Although it’s too soon to comment on any effect the Bectran integration is having on orders and sales, the system is providing a more consistent level of new customer sign-ups, he adds.

Other website improvements include a more flexible shopping cart, in which customers can create and save lists of commonly ordered products, then click the list to reorder the same products when needed.

Blending commerce and CRM

The new order management system is “extremely customizable,” Williams says, enabling Petra to set up such account services as automatically applying each customer’s preferred shipping method to each order. Petra is also set up to drop-ship orders on behalf of its client retailers.

Additionally, Petra is integrating its commerce platform with its Mailchimp email marketing system, which it uses to engage existing and prospective customers with order-tracking information and promotional campaigns.

Going forward, Petra is planning additional upgrades. One will replace its legacy site search with Oro’s built-in search tool, which provides for stronger integration with product data for more relevant search results, Williams says.

Petra’s also planning to deploy Oro’s CRM software, which is tightly integrated with OroCommerce, he adds. One advantage of using the CRM system, he says, will be knowing that a customer typically places an order, say, every 25 days.

“We’ll set up a task in Oro to, say, on Day 20, let our sales rep know this customer’s order is coming soon.” The rep could then email the customer with relevant information on related products and promotions.

Williams didn’t comment on the cost of deploying its OroCommerce platform.

Motti Danino, chief operating officer of Oro, says the annual licensing fee for Oro Enterprise starts at $45,000 per year for an on-premise version or $55,000 for the cloud-based version. An average implementation cost runs about $300,000, with annual maintenance costs starting at about “a few thousand per month,” he adds.

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Gero Decker

Since the introduction of internet technology, industries have undergone huge changes, not only the way they operate but their approach to compliance and regulatory change and internal cultural attitudes towards data.

More than a third of business organizations spend a minimum of a day each week monitoring and regulatory change, while two-thirds expect regulators to introduce even more regulatory information in the coming year, according to Thomson Reuters.

With the rapid digitalization of enterprise services and the consequent creation of data, physical products aren’t necessarily the most valuable asset enterprises have to offer anymore.

The availability of data, from customers’ spending habits to credit applications, provide invaluable insight that can be used to refine and market existing products and services, as well as inform the development of new technology.

There’s a huge amount of risk associated with this data, however. In a highly regulated industry, mistakes can come with expensive and litigious consequences. With such sensitive information about customers’ records, the utmost care must be taken in the management and protection of this data, without limiting the ability to innovate.

That factor alone makes it easier to restrict access to information to mitigate the risks. However, in the long-term, shutting employees out and having departments work in silos is counterintuitive to collaboration and, consequently, growth.

So then, how can we keep customer data safe and protected, while still enabling enough flexibility to collaborate and create new technology? Here are four methods:

1—Clearly define and set the expectations

Develop a system that classifies the sensitivity level around different data sets and how they should be used, stored, accessed and shared. It should comply with the requirements of your region (for example, it may need to be GDPR-compliant in certain markets) and future-proof your organization so that it enables for flexibility, transparency, and scalability. This framework should also be able to adapt to regulatory and audit requirements as they change and arise. (GDPR, or the European Union’s General Data Protection Regulation, is a set of data privacy standards designed to protect online buyers.)

Often key bodies will require that you keep documentation detailing exactly how data is used in day-to-day operations. They may also require you to prove communications with staff regarding how this framework was done, potentially requiring formal records of this.

Defining expectations and rules around data-sharing is the first thing to do before granting access to sensitive data to employees. Most important, this framework should be core to your onboarding process for new hires and should be revisited frequently by employees.

2—Implement business processes

Process-driven transformation can enable businesses to significantly boost operational efficiency and better meet customers’ needs, allowing for deep data analysis and insights into behaviors. Along with centralizing processes to focus primarily on the customer, business process management (BPM) can help B2B companies innovate faster, improve the launch of new products into the market, and reduce both risks and costs.

However, despite this, BPM is not being used to its full potential. Global research suggests improper documentation is a problem for 94% of respondents in the finance industry and 89% in insurance.

3—Invest in the right equipment 

Once the rules and processes are running, ensure they’re complemented by the right tools. Often large organizations use intranets, databases (or third-party software) to create single sources of knowledge within their intranets that allow them to communicate with staff to reduce the risk of non-compliant activities. For third-party central databases, ensure you have crucial security features like permission management at a granular level to control and monitor who has accessed the data and how it was used.

Don’t forget to implement basic security protocol, from secure passwords, 2-factor authentication and frequent updates across the organization. Human error is the leading cause of data-breaches!

4—Create a culture of responsibility

Company cultures that lack accountability are a major source of risk for organizations. A company’s culture dictates and influences risk-taking behavior, so it’s the responsibility of leaders like chief compliance and risk officers to ensure they’re advocates for desirable behavior in terms of policy adherence, risk mitigation, whistle-blowing and responsibility. Make sure you take the time to educate all staff across the organization of the importance, risks and consequences that come when handling sensitive data. Does your team fully understand their responsibility in using financial information safely? Would they feel comfortable having a stranger use their financial data?

Data-friendly behaviors need to be advocated, from the top of the organization. Even with the most sophisticated processes or state-of-the-art management, automation and security tools, if top executives aren’t the ultimate champions of data responsibility in enterprises, not only will the potential of this invaluable information never be fully realized, it could cause a variety of headaches and serious issues for the company and its customers.

Gero Decker, who holds a PhD in business process management, is the co-founder and CEO of  Signavio, a provider of business transformation software and services.

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Satish Chavan

Why headless is becoming more popular?

There are two major factors. First, when e-commerce first entered the market, the majority of traffic to websites came from desktop. As a result, the solutions that sprung up at the time were full-stack which was all-inclusive with the website front-end and back-end coupled.

However, as technology evolved, the path to purchase expanded to include not only mobile traffic but a complex matrix of buyer touchpoints that demand flexibility, which is difficult for full-stack solutions to execute because the front-end and back-end of the system are coupled.

Secondly, every market player now wants to expand into commerce. Because of the amount of content that already exists, from an implementation standpoint it is much easier to build a commerce engine and connect it to the existing content management solution, rather than building a completely new website and having to migrate their old content into it.

What are the benefits of headless?

Flexibility

As the front-end and back-end of a headless system are decoupled, it is possible to make updates to the content layer without disrupting the business. For example, your marketing team wants to launch a new promotional campaign without having to rely on developers and a full system reconfiguration. This can be easily achieved through headless e-commerce implementation.

By decoupling the front-end and the back-end, headless e-commerce allows for infinite flexibility and customization to make whatever modifications you want, and only requires a front-end developer. Changes as big as making a custom checkout flow and as small as adding a new field to a customer account are easy when having a decoupled architecture. Also, the marketing team can run any promotion campaign at any time and update content/banners for these promotions on its own without having to rely on the IT team for the support.

Personalization

Because headless systems are de-coupled, they allow you to experiment without fear of slowing your website. For example, marketers could run continuous back-end experiments for achieving the highest level of user personalization without disrupting shoppers who are using the front-end search function.

With this integration, businesses can now look forward to a powerful and engaging e-commerce site. This includes personalizing the content based on demography (gender, geo-location, age, etc.), and educating and motivating customers while they are on the site via product showcasing, blogs or vlogs, images, etc.

The headless approach is available through such e-commerce platforms as Amla Commerce, Commercetools, Elastic Path, Four51, Magento and Salesforce Commerce Cloud.

When using a headless strategy on the Magento e-commerce platform, for example, content will be managed in a more user-friendly and advanced way than under Magento’s usual way of doing that in a single editor. Content will be displayed in a way that there is no or minimal overhead in terms of server and database resources on the Magento Store. The presentation layer can be easily scaled. Its secure platform will help in scaling it further in the future and will also reduce the risk of a security breach.

Speed

A decoupled architecture allows you to make rapid changes without disturbing the back-end, and vice versa. It also means new functionalities and integrations can be applied with much less time, because of the openness of the architecture. For example, you can make a quick update for customer-facing content without having to reboot your entire system.

As these are decoupled systems, the presentation layer talks with application layer through APIs. With this approach, you can build a data cache layer sandwiched between presentation and application layer. All catalog or static content requests can be cached at the cache layer. This way speed of content loading will be much faster and the system will able to support more traffic as compared with a full-stack application.

“Headless commerce” is where the front-end and back-end of a commerce platform are de-coupled and stand independently of one another, separating the content presentation layer and the business logic/functional layer.

Customization

With headless architecture’s decoupled approach to integrations, you can work closely with your technology team to identify which integrations make the most sense for your business that will actually impact your financial bottom line.

Customization and integration of other systems are much easier with this kind of architecture. As these architecture integrations are no longer a package deal, you don’t have to buy them in bulk.

And while the front-end and back-end are two independent systems, customization can be done in parallel.

In summary, apart from saving cost, going headless by decoupling a website’s back-end and front-end allows for quicker integrations, greater experimentation, personalization and speed.

Satish Chavan is president of e-Zest Solutions Inc., the U.S. unit of India-based e-Zest Solutions Ltd., an IT services company specializing in digital commerce, marketing and related technology and services. Follow him on Twitter @satishchavan.

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Grainger’s online businesses, he adds, “continue to grow very strongly, and continue to have strong margins” with the lower prices the distributor of business and industrial supplies introduced last year.

D.G. Macpherson, CEO, W.W. Grainger

Grainger didn’t immediately respond to a request for its overall e-commerce sales, though it has said that 56% of its 2017 total revenue came in through its e-commerce channels, including websites, KeepStock vending inventory service and e-procurement systems. At that rate, its Q1 e-commerce sales would come in at $1.55 billion. Grainger is No. 32 in the B2B E-Commerce 300.

“We’re pleased that pricing changes are resulting in strong growth with gross margin rates above expectations,” Macpherson said yesterday on a conference call with stock analysts, according to a transcript from Seeking Alpha. “I think we’re probably most pleased with the fact that we’re really developing stronger relationships with customers and all different types of customers.”

“Large-customer gross profit was better than we expected; we’re not having to deeply discount any frequently repurchased items as much, as customers get more comfortable with our pricing level,” he said, adding: “Our customers are starting to trust that our prices are relevant and understand the value that we provide.”

A particular benefit of more competitive pricing, he added, is more growth opportunity with mid-sized companies. “We feel like there is a long runway of mid-size customers to acquire and to build relationships with,” he said.

Macpherson noted that Grainger—a distributor of maintenance, repair and operations (MRO) equipment and supplies that companies, government agencies and institutions use to operate their facilities—realized its strongest sales gains in the quarter to retailers and construction contractors.

Grainger said Q1 sales were particularly strong—rising 24% year over year—at Zoro.com and Japan-based MonotaRO.com, which it refers as its “single-channel” online businesses. Zoro specializes in selling to tradesmen and other small businesses.

Grainger had a tougher time in the quarter in Canada, where sales fell 6% in local currency. The sales decline combined with restructuring expenses to result in an operating loss of $20 million. Nonetheless, price increases introduced in Canada late last year helped to improve gross profit margin there by 3.3 percentage points. “This is going to be a smaller but more profitable business,” Macpherson said on the conference call. Grainger’s Canada operations include Acklands Grainger and a Zoro section on eBay Canada.

For the first quarter ended March 31, Grainger reported:

• Sales of $2.766 billion, up 8.9% from $2.541 billion;
• Operating earnings of $334.83 million, up 14.5% from $292.50 million;
• Net earnings of $231.54 million, up 32.5% from $174.74 million.

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Grainger on Monday named as its next chief financial officer Thomas Okray, a former senior executive for finance and fulfillment operations at Amazon.com Inc., which in recent years has been increasing competition for Grainger and other distributors based on price and customer service.

Thomas Okray

Okray will take over as Grainger’s top financial executive on May 2, when he will succeed the retiring Ron Jadin.

Okray’s experience also runs across management of supply chains as well as financial operations at wholesaler and retailer Advance Auto Parts and General Motors Corp. He joins Grainger from Advance Auto, where he most recently was executive vice president and CFO. Prior to Advance Auto, Okray was vice president of finance and global customer fulfillment at Amazon.

But he has spent most of his career at GM, where as a financial and supply chain executive he oversaw more than $120 billion in annual operating expenses and $8 billion in capital expenditures as CFO for global product development, purchasing and supply chain.

Grainger is No. 32 in the B2B E-Commerce 300; GM is No. 3, Advance Auto, No. 109; and Amazon’s B2B unit Amazon Business is No. 91.

D.G. Macpherson, Grainger’s chairman and CEO, said in a statement this week that, in addition to extensive financial and overall business experience, Okray “has a great appreciation for our industry and customer base, and understands the importance of a sound digital strategy.”

Grainger also announced this week the retirement of senior vice president and chief people officer Joseph High, who will “transition over the next few months and assist in the process of identifying his successor.”

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But to maintain its edge as a distributor to commercial and industrial customers, it’s doing a lot to upgrade its back-end business software systems and website features to keep its e-commerce operation up to date and relevant. “We tear the guts out of things sometimes,” says CEO Doug Root.

In 2015 Atlanta Light Bulbs, No. 231 in the B2B E-Commerce 300, swapped out a clunky and nearly 15-year-old, mostly homegrown e-commerce platform for a new platform from BigCommerce Pty. The new e-commerce system from a commercial provider did away with the hand-coded web pages that sometimes took Atlanta Light Bulb developers hours to code a single product change on up to 12 pages, Root says.

The lighting products distributor worked with software developers from web development firm MindHarbor to use application programming interfaces, or APIs—sets of software instructions for integrating software applications—to make changes to product pages nearly instantly when and where they need to. Atlanta Light Bulbs carries an inventory of 9,800 products from a network of 110 vendors in such categories as light bulbs, fluorescent light fixtures, medical lamps, solar-compatible lamps, lighting accessories and wire-cutting tools.

The new technology has enabled the lighting distributor to introduce new website features, including Price Waiter, a tool that lets buyers calculate an order and submit a price they are willing to pay, and QuoteNinja, which lets buyers receive a detailed quote on the website or via a mobile app, and an optional emailed checkout link to complete the purchase through the distributor’s online shopping cart.

In 2017, Atlanta Light Bulbs posted B2B e-commerce sales of $3.2 million, up 6.7% from $3 million in 2016. But if the company expects to hit its B2B e-commerce sales target of $4 million in 2018, it needs to keep adding better functionality and even more web features, Root says. “We got complacent once when an old clunky system was making good money, and then our competitors wised up to e-commerce,” he says. “We aren’t complacent anymore.”

These days the biggest forthcoming change is moving the company’s present enterprise resource planning system from the BigCommerce platform to a new ERP system from Oracle NetSuite, a unit of Oracle Corp. With a new ERP system linked to its e-commerce site, Atlanta Light Bulbs will have better and more integrated product data, Root says. That, in turn, will enable the distributor to add tools or refine existing features for generating self-service quotes, account self-management, user-specific pricing, order tracking and other features.

Better integrated technology systems will replace what Root says is too much siloed information on sales and inventory within his company’s software systems for its multiple selling channels, including its showroom, telephone sales, and orders received from resellers and overseas buyers.

“Everything is all about complete transparency, so with a new ERP system tied to our front end, all of us will know where product data and order status stands,” he says. “The nature of B2B e-commerce is changing and older purchasing agents and corporate buyers are being replaced with younger buyers—in many cases millennials—who don’t want to talk to a sales agent or make the trek to a warehouse or store to place orders. For large orders, you need to get a quote—and the modern millennial B2B buyer doesn’t want to have to pick up a phone to do that. Today’s B2B buyers just want to get things done—right then and there.”

A new ERP system in conjunction with a better e-commerce system is helping Atlanta Light Bulbs attract and retain more customers and generate bigger orders that had seemed out of reach under ALB’s prior technology setup. For instance, the average B2B ticket on the distributor’s website is about $140, but specialty orders can be much higher—and now can be more easily processed online thanks to the ability of the new site to integrate with the ERP system and pull the correct product and pricing information.

Many large hardware and home improvement retail chains may only stock lighting products in seven or eight categories, Root says. But new and integrated ERP and e-commerce systems let Atlanta Light Bulbs stock lighting products—including many specialty items such as particular types of light emitting diodes, LED products—that other websites may not carry. “Specialty orders are pretty big ticket,” Root says. “We have a single order we are processing now for $6,700.”

Improved customer-facing and back-end business operations software systems are giving Atlanta Light Bulbs better ways to keep buyers coming back, even if they abandon a shopping cart.

Atlanta Light Bulbs has reduced its shopping cart abandonment rate by 29% with such programs as RewardCamp, which provides customers credits every time they buy something; and its QuoteNinja mobile app, which generated more than $100,000 in orders within 90 days post-launch. QuoteNinja lets ALB customers request a price they would pay for bulbs or related products, and receive back a quote, typically within the same day. Buyers next have the option to change or modify the quote for the quantity and product price they would pay and, if accepted by Atlanta Light Bulbs, use a purchase link to complete the order.

“Customers get a message that says we’ve accepted their offer, or if their suggested price is too low, we offer them a different deal,” Root says.

Despite having a long tenure and lots of expertise selling to corporate buyers online, e-commerce only accounts for about one third of the company’s annual sales of about $12 million, Root says.

Nonetheless, the online channel helps it stand out among business buyers. “We’re a small business, and e-commerce made us a really well-known player in the lighting market,” Root says. “We need to differentiate in an increasingly competitive B2B online market.”

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“We accelerated our investment in the Facilities Maintenance business after the sale of Waterworks,” CEO Joe DeAngelo said on the call, according to a transcript of the call from Seeking Alpha. “We accelerated a $10 million investment in 2017, and we expect to invest an additional $12 million in 2018, in both our selling channels and our enabling functions. Investments within our selling channels are being made in our sales force, our e-commerce site and our mobile application. Investments within our enabling functions are focused on data analytics, supply chain and category management capabilities.”

Waterworks, the water, sewer and fire protection products business, was sold in August to New York investment banking firm Clayton, Dubilier & Rice for $2.5 billion in what DeAngelo termed “an extremely efficient transaction that netted proceeds of $2.4 billion after taxes and transaction costs. This transaction allowed us to improve our business mix and give us greater flexibility to accelerate investment spend for long-term growth.”

Waterworks was rebranded Core & Main and has more than 240 branch locations.

HD Supply, a distributor of industrial and maintenance products that sells through three e-commerce sites and a team of sales reps, consolidated its business units to two—Facilities Maintenance and Construction and Industrial—from six last year as it embarked on a restructuring initiative. “We incurred $6 million of restructuring charges, comprising primarily severance, relocation and related costs,” chief financial officer Evan Levitt said on the earnings call. He added that HD Supply expects to incur $10 million to $15 million under the plan, “and expect the plan to deliver a payback in approximately two years through a reduction in ongoing costs. We expect to complete the restructuring activities in the fall of 2018.”

HD Supply, No. 42 in the B2B E-Commerce 300, also grew its product and sales territory with the acquisition of A.H. Harris Construction Supplies, which specializes in concrete construction products, for approximately $380 million in cash. The purchase closed March 5 and is expected to expand HD Supply’s Construction and Industrial physical presence on the East Coast with more than 50 new locations, particularly in the Northeast, DeAngelo said. Harris did not sell online prior to the acquisition.

HD Supply doesn’t break out e-commerce revenue, but says it processes much of its sales through its two main e-commerce sites: HDSupplySolutions.com for facilities maintenance, repair and operations, or MRO, products; and WhiteCap.com for industrial and construction products and materials. It also operates HDSupplyHIS.com, which sells home improvement products to contractors and do-it-yourself consumers.

For the fourth quarter ended Jan. 28, HD Supply reported:

• Net sales of $1.183 billion, up 9.0% from $1.085 billion a year earlier.
• Gross profit of $468 million, up 8.6% from $431 million, resulting in a profit margin of 39.6% compared with 39.7% in the same period last year.
• Net loss of $9 million, compared with net income of $52 million. The loss was attributed to a $72 million non-cash charge for the remeasuring of the company’s U.S. deferred tax assets and liabilities resulting from the Tax Cuts and Jobs Act of 2017.

For the 2017 fiscal year ended Jan. 28, HD Supply reported:

• Net sales of $5.121 billion, up 6.3% from $4.819 billion a year earlier.
• Gross profit of $2.033 billion, up 5.6% from $1.925 billion, resulting in a profit margin of 39.7%, compared with 39.9%.
• Net income of $970 million, up from $196 million in fiscal 2016.

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Tech Data attributed Q4 and full-year growth to two key factors: its strategic refocus as it adapts to the I.T market it serves and the acquisition last year of Technology Solutions from Avnet Inc., CEO Robert Dutkowsky said on the company’s year-end earnings call yesterday. “The I.T. market is in a constant state of transition. As workloads migrate across technology platforms, it is fueling growth in next generation technologies and delivery models such as the cloud, hyper-converged infrastructure, software-defined solutions, IoT, and analytics, security and the services that support the entire technology continuum,” he told analysts, according to a transcript of the call from Seeking Alpha.

The company posted the highest sales in its history in fiscal 2018 and paid down $850 million of debt, Dutkowsky said.

Tech Data didn’t break out e-commerce revenue, but Dutkowsky said on its Q3 earnings call that more than half of sales are online and over 95% of its inventory is purchased digitally. Using the same formula of more than half of sales as digital, more than $18.39 billion of its fiscal 2018 sales were online. Tech Data defines digital commerce as sales through its e-commerce site, Shop.TechData.com, and through electronic data interchange, or EDI.

Tech Data, No. 10 in the 2018 B2B E-Commerce 300, is positioned “to invest in those areas to capitalize on the opportunities they present and to help our customers navigate an increasingly complex technology landscape. To accomplish this, we’re focused on four primary strategic objectives: investing in next-generation technologies and delivery models, strengthening our end-to-end portfolio, transforming Tech Data digitally, and optimizing our global footprint,” Dutkowsky said.

The increase in worldwide and regional sales resulted mainly from the acquisition of the Technology Solutions business unit from Avnet for $2.6 billion, chief financial officer Charles Dannewitz said on the earnings call. Among its suppliers, products from Apple Inc. (No. 2) yielded the most sales for Tech Data in Q4. “Apple represented 19% of worldwide sales with no other vendor partner representing 10% or more of our sales,” he said.

For the fourth quarter of fiscal 2018 ended Jan. 31, Tech Data reported:

• Total sales of $11.09 billion, up 49.3% from $7.43 billion in the same quarter last year;
• Sales in the Americas of $4.291 billion, up 58.5% from $2.707 billion;
• Sales in Europe of $6.463 billion, up 36.9% from $4.720 billion;
• Asia-Pacific sales of $338.0 million that came solely from Technology Solutions (Tech Data did not sell in the region before the acquisition);
• Gross profit of $616.9 million, up 66.3% from $371.0 million, resulting in gross margin of 55.6% compared with gross margin of 49.9%;
• Net income of $1.26 million, down 98.4% from $78.82 million in the Q4 2017.

The increases in sales and gross profit came largely from the addition of Technology Solutions, the company says.

For the fiscal year ended Jan. 31, Tech Data reported:

• Total sales of $36.78 billion, up 40.2% from $26.23 billion in fiscal 2017;
• Sales in the Americas of $15.949 billion, up 53.6% from $10.384 billion;
• Sales in Europe of $19.714 billion, up 24.4% from $15.850 billion;
• Asia-Pacific sales were $1.11 billion, and came solely from Technology Solutions (Tech Data did not sell in the region before the acquisition);
• Gross profit of $2.116 billion, up 62.5% from $1.302 billion, resulting in gross margin of 5.8% compared with gross margin of 5.0%;
• Net income of $116.6 million, down 40.2% from $195.1 million in the same period last year.

The increases in sales and gross profit came largely from the addition of Technology Solutions, the company says.

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