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eCommerce is Helping Industrial Suppliers Respond to Tougher Market Conditions

How are industry leaders responding to the tougher conditions in industrial markets?
Grainger Product Page

Take Grainger (NYSE: GWW) as an example.

For 2015, they just reported sales of $10 billion, flat compared to the prior year and a profit decrease of 4 percent to $769 million. Of the $10 billion, $4.09 billion (41%) was online via eCommercea 13.6% increase from the $3.6 billion earned in eCommerce sales in 2014.

President and CEO Jim Ryan said, “This was a challenging year for us and for most industrial companies, with an unprecedented combination of declining oil and commodity prices, low inflation and a strong U.S. dollar.We took action in 2015 by restructuring several of our businesses, resulting in a leaner cost structure. As previously communicated, we will continue to execute changes in the United States and Canada in 2016. We also continued to invest for the future by expanding and upgrading our industry-leading supply chain, digital capabilities, sales force productivity tools and KeepStock, which enables us to serve customers the way they want to be served.”

In response to changing market conditions and customer behavior, the company is also reported as saying it would continue:

  • investment in online platforms and support
  • to adjust the U.S. branch network in 2016 and as more customers go online to complete purchases. Grainger plans to close 55 branches in 2016, after closing 49 U.S. branches, 16 Canadian and 16 European branches in 2015.

Here’s our take: Industrial sales are continuing to move online and companies are investing more in online sales platforms. CDS’s 2015 growth of over 20% really proves it. In addition to the transition to online sales, eCommerce is enabling cost reductions in traditional sales channels (for example, less branches in Grainger’s case).

Let us know your take by commenting below, or if you’d like to discuss how your company can build industrial B2B sales online give us a call or click either button below…

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