W.W. Grainger investing significantly in e-commerce

Industrial product distributor W.W. Grainger, which supplies everything from motors to air compressors through various sales channels, is making another significant investment in online growth. The company reportedly will invest $40 million over the next four years on a new e-commerce platform and site navigation technology. Already, up to 25% of its 1.2 million industrial, commercial, and government customers buy from it online, and that number could grow to 40%, vice president of e-commerce Paul Miller was quoted as saying in this Internet Retailer article.

It makes sense. After all, Grainger’s e-commerce channel has been outpacing its other sales channels, including its brick-and-mortar operations, for several years now. Growing steadily at 20-25%, e-commerce sales reached $2.1 billion in 2011. Growth from this channel helped the company hit the $8 billion sales mark for the first time last year.

As more customers migrate to online and electronic purchasing, the  company is increasing the number of products — currently 800,000 — that it offers through grainger.com and other branded websites. Grainger.com provides real-time price and product availability, detailed product descriptions, and product search and compare functions. Grainger is also providing mobile services that allow the display of products on a handheld device in the field.

The push to strengthen its e-commerce presence actually began last year. In 2011 significant expenditures were made not only to build and expand distribution centers in the US and Canada, but also to update and improve its online platform. According to Grainger’s 2011 10-K, total capital expenditures for 2012 are projected to range from $200 million to $225 million, a portion of that set aside for continued investments in e-commerce.

In addition to e-commerce, Grainger’s multichannel business model enables it to market its broad range of maintenance, repair, and operating supplies through direct sales representatives, catalogs, and direct marketing materials. The company operates a network of branches and distribution centers mainly throughout the US and Canada, but also in Europe, Asia, and Latin America.

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Photo by Chris Bartle, used under a Creative Commons license.

John MacAyeal

John MacAyeal has worked at Hoover's since the era of Hawaiian shirts and Y2K angst (aka the late 90s). Now he's surprised to have survived into this time of skinny jeans and 2012 angst.

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