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E-commerce accounts for nearly all of Grainger’s annual sales growth

January 27, 2015 01:09 PM
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W.W. Grainger Inc. says that e-commerce accounted for virtually all of its growth in 2014.

For the year ended Dec. 31, Grainger, which sells maintenance, repair and operations products ranging from janitorial supplies to machine parts, reported:

  • E-commerce sales increased 16.1% to $3.6 billion from $3.1 billion in 2103.
  • Total sales increased 5.6% to $9.964 billion from $9.437 billion
  • Net earnings jumped 5.7% to $812.3 million compared with $807.7 million in 2013.
  • The web accounted for 36.1% of all sales compared with 32.8% in 2013.
  • E-commerce accounted for 94.3%, or $500 million, of the growth in all sales of $530 million.

“Our single-channel online model continued its strong growth,” CEO Jim Ryan told Wall Street analysts yesterday on the company’s year-end earnings call.

The web is becoming a higher priority for Grainger, No. 13 in the Internet Retailer 2014 Top 500 Guide as corporate purchasing managers look to conduct more of their maintenance, repair and operations purchasing online, including via mobile apps, the company says.

Grainger’s mobile app accounts for about 40%—$23.4 million—of the company’s 2014 Internet Retailer-estimated mobile commerce sales of $58.5 million. But within two or three years, Grainger’s mobile app, deployed in 2012, could account for 60% to 70% of all mobile sales, the company says.

Grainger is pushing more business toward mobile in general, and its app in particular, because it saves time for clients’ personnel who often place orders to replenish products while they’re on a job site away from desktop computers, says Geoffrey Robertson, vice president of product, innovation and business integration.

“Our mobile capabilities, coupled with our order management workflow system, dramatically reduce this complexity and increase the speed of the approval process with 30% to 40% faster approval rates,” Robertson says.

For the fourth quarter:

  • Grainger didn’t break out web sales. But using web sales as percent of total sales of 36% and 33%, respectively, for the past two years, Internet Retailer estimates the e-commerce grew year over year 15.2% to $903.6 million from $784.4 million.
  • Total sales increased 5.6% to $2.510 billion from $2.377 billion in the fourth quarter of 2013.
  • Net earnings were $151.1 million compared with $159.4 million in the fourth quarter of 2013.
 

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