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.

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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.

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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.”

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

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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.

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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.”

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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.

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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.

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The metalworking and industrial supplies distributor reported an 8% year-over-year increase in ecommerce sales to $634.0 million for the fiscal third quarter ended June 3, as total net sales grew 10% to $1.05 billion. That put Q3  ecommerce sales slightly down from a year earlier as a percentage of total sales, to 60.1% from 62.0%, as MSC’s public sector sales shifted more to non-ecommerce channels.

Nonetheless, the distributor pushed ahead a new way in the quarter to build ecommerce sales through MSC’s arrangement with MachiningCloud, a machining tools commerce platform that is relying on MSC as its exclusive ecommerce transaction partner. This new channel is expected to show strong growth, MSC president and CEO Erik Gershwind said today during a Q3 earnings call.

Getting closer to engineers influencing procurement

MachiningCloud, which launched in 2020, is an internet software platform for more than 100,000 users involved in the sale of industrial machining tools from more than 50 brands, including Kennametal, 3DLive, Fullteron Tool Co., Ingersoll Cutting Tools and Jergens. It expects to have more than 200 brands by the end of this year, says Matthew Nicholson, MachiningCloud’s director of sales and marketing.

“We strengthened our position for future growth through an exclusive agreement with MachiningCloud,” Gershwind said.

He said the partnership “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.”

“We’ve always felt like we had a strong ecommerce program, but we also have always felt that you never stand still,” Gershwind added.

He said two pillars of MSC’s ecommerce  growth strategy are ongoing improvements to its ecommerce platform, including enhancements underway to online product discovery on MSCDirect.com. The other pillar is digital partnerships and programs to expand MSC’s reach with new customers, including through MachiningCloud and MillMax, a program that helps customers set up complicated milling operations and reduce manufacturing costs.

For the third quarter ended June 3, MSC also reported:

● Gross profit increased 4.3% to $428.9 million, resulting in a gross margin of 40.7%, down from 42.9% a year earlier.

● Net income fell 4.5% to $95.2 million.

● Sales through internet-connected vending machines grew 10% and accounted for 15% of total sales.

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Colin Sebastian, an R.W. Baird & Co. investment analyst who accurately forecasted Amazon Business’s $25 billion gross sales mark for example, has projected $80 billion in gross sales before the end of this decade.

One way Amazon Business is moving toward much higher gross sales volume, analysts say, is by expanding sales to small businesses.

There are 33 million small businesses in the United States, according to the Small Business Administration. It defines a small business as an independent business with fewer than 500 employees. Moreover, the SBA notes that 81% of U.S. small businesses — 26.5 million — are solo operators with no employees.

Enter Business Prime Duo

This week, Amazon Business reached out to solo business operators by offering them a new Business Prime deal with perks like spending analytics tools and free shipping. Called the Business Prime Duo, it lets solo business operators who already have an Amazon Prime account at an annual $139 fee for their personal consumer spending to add a Business Prime account for no extra charge – a savings of $69 per year.

Todd Heimes, director, Amazon Business Worldwide

“Small business owners are passionate about what they do — and we know that many of them do it all by themselves,” says Todd Heimes, director, Amazon Business Worldwide, adding, “From product development and marketing to procurement and finance, these small-business owners wear multiple hats each and every day.”

Business Prime Duo provides the following at no extra fees:

• One-day and two-day delivery options on tens of millions of products, and free same-day delivery on eligible items in more than 90 metropolitan areas.
• An “Amazon Day” option to schedule delivery of eligible items on the same day each week; and a consolidated shipping option on large orders to receive goods in a minimal number of packages and deliveries.
• Customer survey and analytics tools to learn more about customer preferences.
• 90-day interest-free payment terms or 5% back on purchase transactions made with the Amazon Business Prime American Express card.

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Global Industrial is paying “approximately $69.2 million in cash” to acquire St. Louis-based Indoff, Global Industrial said. Indoff will continue to operate under its own brand and leadership team as a wholly-owned subsidiary of Port Washington, New York-based Global Industrial.

Complementing a multichannel B2B strategy

Barry Litwin, CEO, Global Industrial Co.

Barry Litwin, CEO of Global Industrial, said Indoff will complement his company’s multichannel sales strategy. Global Industrial relies on ecommerce to process more than half of its sales transactions, and Indoff brings a network of more than 360 sales partners that “extends our one-to-one sales reach to new customers and markets,” Litwin says.

Litwin adds that Indoff’s product lines and customer base — ranging from material handling systems to office furniture and lighting systems for such customers as financial giant Wells Fargo and manufacturers Lockheed Martin and Johnson Controls — will also strengthen Global Industrial’s market position and support the broader use of the company’s B2B ecommerce platform.

Jim Malkus, CEO, Indoff

Global Industrial already sells over 1 million SKUs of maintenance, repair and operations (MRO) products. That includes its own private label products and equipment branded by Caterpillar that companies use to operate their facilities.

Jim Malkus, CEO of Indoff, says he expects Indoff to grow as a Global Industrial subsidiary

“As part of Global Industrial, we will be in a stronger position to drive the value we provide our customers and support the continued expansion of the business,” he says. Indoff caters to B2B and B2C industries including distribution, healthcare, finance, education, legal, engineering, manufacturing, hospitality, and government.

Global Industrial’s EnvisionB2B speakers

Klaus Werner, former chief marketing officer, Global Industrial Co.

Alex Tomey, chief merchandising officer, Global Industrial Co.

At the EnvisionB2B 2023 Conference & Exhibition in June in Chicago, Alex Tomey, Global Industrial’s chief merchandising officer, will speak on sustainability as a market differentiator. Klaus Werner, Global Industrial’s former chief marketing officer, will speak on customer loyalty strategies.

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