News, research and trends about B2B e-commerce

Pitney Bowes reworks its biggest unit by revenue: Global Ecommerce

Paul Demery — Wed, 31 Jul 2024 21:57:09 +0000

Pitney Bowes Inc. has its eye on Global Ecommerce, the primary but changing revenue-producing business unit at the worldwide shipping and mailing products and services company.

Global Ecommerce made over $1.35 billion last year for Pitney Bowes. That was more than 40% of Pitney’s total revenue of $3.27 billion that year. It also led Pitney Bowes’ fiscal first quarter, which ended March 31, with segment revenue of $333 million. Global Ecommerce provides business-to-consumer online companies with logistics services for domestic and cross-border fulfillment, delivery and returns throughout the U.S. and more than 200 other countries.

132 retailers in the Top 1000 use Pitney Bowes as a shipping carrier. Those 132 retailers made more than $529 billion in 2023 web sales, according to Digital Commerce 360 data. Additionally, 68 use it for international ecommerce services, and 16 use it for fulfillment services. The Top 1000 is Digital Commerce 360’s database ranking North America’s largest online retailers by their web sales.

Pitney Bowes Global Ecommerce hits growing pains

In this year’s first quarter, “Global Ecommerce grew domestic parcel volumes 20% in a challenging market and reduced operating expenses,” Pitney’s then-interim CEO Jason Dies said on a Q1 earnings call.

But Global Ecommerce, one of three Pitney operating segments, has also been reporting the company’s steepest segment revenue and earnings declines: a Q1 EBITDA loss widened 14% year over year to $21 million as the unit’s revenue fell 26% to $333 million. By comparison, Pitney’s other two segments — SendTech Solutions (a mailing technology and services unit) and Presort Services (a mail-sortation business) — each amassed relatively strong financial quarters, as Pitney Bowes’ total revenue dipped by 0.005% to $830.51 million.

In 2023, Global Ecommerce’s revenue fell 14% year over year to $1.36 billion, as Pitney Bowes total revenue dropped 8% to $3.3 billion.

Lance Rosenzweig, interim CEO, Pitney Bowes Inc.

The Stamford, Connecticut-based company, under a new interim CEO appointed in May, Lance Rosenzweig, is conducting a review of Global Ecommerce’s options going forward. In addition, it recently sold the unit’s fulfillment services business to Stord, an Atlanta-based company that specializes in providing fulfillment services to online merchants. Pitney Bowes didn’t provide details on that sale but told industry publication Freightwaves that fulfillment services were a “small piece of the business.”

Rosenzweig joins Pitney Bowes after serving as a top executive at several public and private companies, including Boingo Wireless, technical support services firm Support.com, and customer experience software company Startek.

Pitney seeks a new head of Global Ecommerce

Gregg Zegras, former president, Global Ecommerce, Pitney Bowes

The Global Ecommerce unit’s recently departed president, Pitney veteran Gregg Zegras, retired earlier this month. Pitney Bowes has yet to name a replacement for Zegras.

Pitney Bowes said earlier this month that it was in the final stages of an “expedited strategic review of Global Ecommerce to eliminate ongoing operating losses.” The company recently identified $70 million in cost savings outside of Global Ecommerce and expects to eventually realize overall savings between $120 million and $160 million.

Stord’s acquisition of Global Ecommerce’s fulfillment services includes a 640,000-square-foot warehouse facility in Hebron, Kentucky, with robotic automation and other features. Stord said that facility is now the largest warehouse in its North American network.

Earlier this year, Stord acquired Pro-Pack Logistics, a fulfillment services provider to multichannel merchants in the U.S. and Canada, and it launched Stord Europe with fulfillment centers in the United Kingdom and the Netherlands to support B2B and B2C markets throughout Europe. Stord says it manages more than $5 billion in commerce annually through its fulfillment, warehousing and transportation services.

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

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Distributor Global Industrial delivers mediocre Q2 results

Mark Brohan — Wed, 31 Jul 2024 18:13:33 +0000

Through the mid-point of 2024, it’s been a so-so year financially for Global Industrial Inc. and its sales.

For its fiscal second quarter ended June 30, Global Industrial posted revenue of $347.8 million. That compares to $325.8 million the prior year, a 6.8% gain. Global Industrial does about 60% of all its sales digitally.

But the growth in sales came primarily from the company’s acquisition of Indoff, which Global Industrial acquired for $72.6 million in cash in May. Indoff is a B2B direct marketer of material handling products, commercial interior products and business products with operations in North America.

Without Indoff, Global Industrial sales increased 1.8% in Q2 and 1.7% on an average daily sales basis. Net income for the second quarter was $20.3 million compared with $21.5 million in the second quarter of 2023.

Global Industrial sales in Q2

For the first six months of the year, Global Industrial sales increased 11.9%. That’s up to $671.2 million and compares to $599.6 million for the previous year. Excluding Indoff, sales increased 3%.

Global Industrial’s “retention trends remain healthy,” interim CEO Richard Leeds told analysts on the earnings call.

“During the quarter, we saw a continuation of cautious customer purchasing behavior with mixed revenue performance on a monthly basis,” Leeds said.

However, for the year, company growth predictions remain uncertain given current economic conditions, he told analysts.

“It’s been a challenging environment the first 6 months of the year, and our focus remains on the things within our control,” he said. “We continue to make investments that will strengthen our competitive position, help us capture market share and drive long-term revenue performance.”

Check back for more earnings reports. For reference, here’s last quarter’s update on Global Industrial sales.

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How Watsco grows ecommerce sales and an entrepreneurial spirit

Paul Demery — Tue, 30 Jul 2024 14:30:49 +0000

Watsco Inc. owes its market position to a long-running strategy of acquiring family-owned businesses and giving the freedom to continue operating as entrepreneurs — and to a substantial dose of ecommerce technology and sales strategy, founder, chairman and CEO Albert Nahmad said today.

Albert Nahmad, founder, chairman and CEO, Watsco Inc.

The company said quarterly revenue rose 6.8% year over year. That’s up to a record $2.139 billion for the second quarter ended June 30. And ecommerce grew at nearly twice that rate, at 13%, to $770.16 million.

In Q2, Watsco ecommerce sales accounted for 38% of total sales. Watsco is well-known as a prominent online distributor in the highly fragmented, $64 billion North American HVAC and refrigeration products industry.

“A cornerstone of Watsco’s growth strategy is the acquisition of long-standing, family-owned businesses,” Nahmad said on the Q2 earnings call. He noted that, since its founding in 1989, Watsco has completed 69 acquisitions, “achieving industry-leading scale and preserving many wonderful business legacies into future generations.”

Nahmad added, “Over the last five years, Watsco has acquired eight businesses that today generate approximately $1 billion in annual sales.”

Watsco’s entrepreneurial spirit and ecommerce sales focus

The company’s growth strategy relies heavily on continuing the entrepreneurial spirit of acquired companies, whose executives typically remain to lead their operations.

“Simply put, Watsco’s entrepreneurial culture, which empowers local leaders to make local decisions, continues to perform well,” Nahmad said on the earnings call today.

He noted that Watsco’s long-running strategy of investing in digital commerce technology “continues to have an impact” on financial performance.

“Greater adoption and use of our platforms by a growing number of contractors has produced growth and market share gain,” he added.

Watsco is a Miami-based company that other HVAC suppliers have said they emulate for its digital commerce strategy. It also noted other developments related to its “digital ecosystem of technologies” configured to “transform the customer experience and transform how our industry operates.”

Watsco’s digital ecosystem

The digital ecosystem includes:

OnCallAir
Watsco’s HVAC Pro+ Mobile Apps
Watsco’s product information management (PIM) system

OnCallAir is Watsco’s ecommerce sales platform that lets HVAC contractors digitally engage with homeowners and sell them products and services. It compiled approximately $1.4 billion in gross merchandise value for the 12-month period that ended June 30.

For the six months ended June 30, contractors used OnCallAir to present quotes to about 160,000 households. That’s an 18% year-over-year increase. It also generated a 27% increase in GMV to $743 million.

Watsco’s HVAC Pro+ Mobile Apps provide contractors and their customers with real-time access to ecommerce activity. They also include such information as product specifications, inventory availability, systemwide product matchups, and technical support. For the 12 months until June 30, the number of HVAC Pro+ Mobile Apps users grew 12% to approximately 60,000.

Watsco’s product information management (PIM) system is a repository of rich product data. It provides data on over 1.5 million SKUs to more than 375,000 contractors and technicians who visit or connect digitally with one of its nearly 700 physical locations across the United States, Canada and Latin America.

Watsco is updating its technology systems to “optimize the launch of new GWP (Global Warming Potential) A2L” refrigeration systems designed to be more efficient and sustainable to reduce the adverse effect of refrigerants on climate change.

Though it accounted for 38% of total Q2 sales companywide, Watsco ecommerce sales exceeded 60% in some regions.

Watsco’s pitch to would-be partners: ‘Come to Miami to see us’

In his earnings call remarks, Nahmad, forever on the lookout for acquisitions, said, “Our proven culture, customer-focused technologies, scale and access to capital provide unique advantages and opportunities.” He added to anyone listening: “If you have an interest in learning more, please come to Miami and see us. We are transforming an industry, and we would enjoy telling you about it.”

Here’s last quarter’s update on Watsco ecommerce sales.

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

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Tax-hungry states eye ecommerce delivery fees to fund road repair

Mark Brohan — Mon, 29 Jul 2024 19:00:36 +0000

Cash-starved states and other municipal governments are no strangers to taxing ecommerce to generate revenue.

States, for example, have been collecting sales tax on ecommerce purchases by consumers and businesses for years.

Now, a growing number of states, including Colorado, Minnesota and Washington, are looking for options. Solutions include collecting a percentage of the fee consumers and businesses pay to have ecommerce packages delivered to homes or offices to pay for road repair and related projects.

How ecommerce is taxed in Colorado and Minnesota

For example, in 2022, Colorado became the first state to impose a retail delivery fee. That became one component of a 10-year, $5.4 billion transportation funding package. The retail delivery fee is expected to bring in $78 million a year. At that level, the fee represented approximately 15% of new revenues in the package.

All businesses were initially required to collect and remit a 27-cent fee on each retail delivery order by motor vehicle placed to a location in Colorado. Since being implemented, the fee has increased to 28 cents. However, Colorado also has amended the law to exempt businesses with $500,000 or less in annual sales from having to collect the fee.

Currently, two states — Colorado and Minnesota — have passed bills that collect a percentage of ecommerce delivery fees for fixing roads, bridges, and related transportation infrastructure.

Now, Washington is considering similar legislation. Washington has 57,000 miles of city and county streets. They account for 71% of the total miles in the state, according to the Washington State Department of Transportation.

Cities primarily fund their transportation systems on their own. As they do, 69% of transportation expenditures come from local sources, which face pressure due to competing local demands and structural budget deficits.

Meanwhile, the state’s share, which comes from state fuel tax receipts, is in decline. As a result, local governments are searching for new transportation revenue sources, according to a newly published report from the Washington State Joint Transportation Committee.

Why Washington is considering new legislation

A fee in Washington of 30 cents per order could generate between $45 million and $112 million in revenue in 2026, according to the report. The authors estimate that could grow to between $59 million and $160 million by 2030.

The cost to implement is estimated between $200,000 and $540,000 per year over the first several years.

So far, Washington has produced only one report. Meanwhile, no bill thus far has been introduced in the Washington state legislature.

Still, consumer and business ecommerce spending continues to increase. As it does, even more deliveries are being made. And more states including New York, Ohio, Nevada, Minnesota, Colorado, and Washington are exploring taxing delivery fees for road repair revenue.

“While neither Nevada nor Ohio has moved forward with a delivery fee, both states assessed the mechanism’s viability as a revenue mechanism including its revenue stability, efficiency, ease of administration, social equity, user equity, and transparency,” the report says.

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Distributors see uneven ecommerce sales growth as the year races by

Mark Brohan — Fri, 26 Jul 2024 20:44:31 +0000

The macro numbers speak for themselves: U.S. wholesale sales are doing slightly better than the previous year.

Government data for the monthly sales from distributors and wholesalers trails the calendar by two months, meaning the U.S. Department of Commerce only now just released data for May.

In May, the sales of merchant wholesalers — except manufacturers’ sales branches and offices — totaled $666.7 billion. That’s up 0.4% from $654.3 billion in May 2023. And seasonally adjusted U.S. wholesale sales rose 0.7% in the first five months of 2024 compared to the same period in 2023, after declining 1.6% for 2023 as a whole, according to the U.S. Census Bureau.

But for distributors and digital commerce, the story thus far this year is a tale of uneven growth. While it may be a fat city in one vertical, times are leaner in others.

Wholesalers and distributors’ ecommerce sales so far this year

The biggest public distribution companies have yet to break out second-quarter earnings, but some such as W. W. Grainger started the year with respectable but hardly stellar results. Grainger is a prominent distributor of maintenance, repair and operations (MRO) products that businesses need to operate their facilities.

For the first quarter ended Jan. 30, Grainger reported moderate first-quarter growth in total and web-only sales, but it expects stronger growth ahead, president and CEO D.G. Macpherson said on an earnings call.

“Amid a slow but steady demand environment,” Grainger produced “solid results,” he said.

Grainger’s web-only Endless Assortment business — which Zoro.com and Japan-based MonotaRo.com comprise — posted a 3.7% sales increase to $751 million. By comparison, Grainger’s High-Touch Solutions segment grew 3.4% to $3.405 billion. The High-Touch Solutions segment includes the full-service sales through Grainger.com and the company’s sales team.

Most big public distributors in 2024 are following a common theme of softer sales due to weaker performance in manufacturing productivity and slower overall economic activity.

But even with softer sales, the emphasis is on shifting more, and not less, sales activity to digital commerce. A case in point is Fastenal Co.

For its fiscal second quarter ended June 30, 2024, the fastener distributor grew total sales to $1.916 billion. That’s a 1.8% increase from $1.883 billion in the second quarter of 2023. Net income was $590.4 million compared with $593.1 million in Q3 of the previous year.

As in other recent quarters, digital sales made up two-thirds of all Fastenal revenue.

“On digital footprint, 59.4%, that’s taking all of our ecommerce, all of our FMI, it was 59.4% in the second quarter. Actually, in June, it hit 60%,” CEO Daniel Florness told analysts. “We had expected that we’d get to about 66% this year. We now think it’s about 63%, and that’s not because we’re not acquiring customers. It’s because customers are spending less, and it shows up in our numbers.”

For the second quarter, using 59.4% and 55.3% of digital as a percentage of all sales, Digital Commerce 360 estimates Fastenal digital sales grew year over year by 1.8% to $1.138 billion from $1.041 billion.

How are smaller distributors doing in 2024?

Like Grainger and Fastenal, smaller distributors also are seeing only moderate to steady increases in year-to-date ecommerce sales.

Bay Supply, a distributor of fasteners, tools and hardware, is on track to hit its forecasted growth of 10% in 2024. But a downturn could lower that, says chief operating officer Michael Eichinger.

“We are at a pivotal point in the coming eight weeks based on our historic trends, and it appears we are on track to hit that 10%,” he said. “However, the sluggish performance has also thrown forecasting a wrench. I do believe our worst case is 5%-8% growth for 2024.”

For ecommerce, the outlook is also mixed.

“Digital sales are up single digits over 2023 (5%). However, this is attributed to reduced average order volume,” Eichinger says. “Order volume is up 15%.”

At MC Tools and Safety, a small distributor of industrial equipment based in Blaine, Minn., ecommerce remains an exceedingly small part of the company’s operation, says president Erika Scherman. The company does $2.5 million in annual sales, and only about $20,000 online.

MC Tools has had an ecommerce site for a decade. But after experiencing fraud, it pulled back from selling online and made its website informational only. When COVID hit, it went back to selling online. Within the last three months, it launched a new Shopify site. So far, results have been “minimal.” Scherman says.

One problem is that its enterprise resource planning (ERP) system doesn’t communicate with the Shopify site, so a lot of work, such as on pricing, must be managed manually. As a result, MC Tools is trying to turn that to their advantage by hiring someone to compare their individual prices with online prices of competitors. That may be an opportunity to raise prices on certain items, Scherman says.

“Our next adventure is to look at our pricing compared to other people out there, to make sure our online prices protect our margin,” she says.

Scherman says a small company like hers doesn’t have the resources or time to invest in ecommerce the way larger competitors do. And ecommerce offers less return because she focuses on serving customers in Minnesota and western Wisconsin. “I don’t want to sell shovels to California,” Scherman says. “I can’t ship them well.”

Overall, she’s not sure where the website fits into the company’s business model that was built on personal relationships with customers, midsized contractors as well as operators of warehouses, offering them great service and stocking the products they need.

Speaking of ecommerce, she said, “I was telling my marketing gal, we could sell a million dollars there, but I’m not sure we’re well set up for that. I don’t know how to change how we do business to support that.”

Digital Commerce 360 contributing editor Don Davis provided reporting for this story.

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The new digital supply chain stars: automated guided vehicles

Emily Newton — Fri, 26 Jul 2024 14:00:28 +0000

Emily Newton

Automated guided vehicles (AGVs) have become more common at supply chain locations worldwide, transporting containers and other loads between ships, trucks, rail cars and warehouses. Why are more leaders using them? Most use cases relate to relieving congestion and improving operations when ports experience record-setting traffic levels. Decision-makers recognize how AGVs can streamline their supply chains, keeping containers moving and preventing costly delays.

Leaders who use AGVs and other automated tools to strengthen their supply chains have more oversight and influence over the impact of supply chain fluctuations.

Accelerating the Movement of Goods

The supply chain’s persistent labor shortage can cause staffing crises that are particularly impactful during peak periods. Some leaders have deployed AGVs for material handling tasks, finding that such efforts help them maintain high productivity.

One example came from China’s Ganqimaodu land port. Each AGV moved between this port and a Mongolian coal stockyard, carrying two standard containers of imported products along a 1.86-kilometer route. An AGV takes 50 minutes per round trip and travels up to 25 kilometers per hour.

The AGV operator using them in China has 30 in its fleet, using 24 each weekday. They move 10,400 tons of coal daily during 160 total round trips. Additionally, there are 30 AGVs in Mongolia. Supply chain managers believe that using all 60 simultaneously will allow for achieving a 15-million-ton transport capacity.

To provide perspective on the overall coal-related activity at the port, leaders said each arriving truck holds up to four standard containers and makes four to six round trips per month. This initiative was the first instance of AGVs used at a land port for cross-border transportation, showing the potential of such applications.

Examples such as this show how AGVs can minimize supply chain staffing shortages, keeping each port as productive as possible during those challenging times. Moreover, AGVs can support other automation projects to relieve labor needs.

Japanese officials plan to address the labor shortage with a conveyor belt from Osaka to Tokyo. The so-called Autoflow-Road project would include infrastructure above and on the sides of roads, as well as tunnels underneath major highways. Estimates suggest this system could move loads equal to that of 25,000 trucks daily, and that each container placed on the conveyor belt would hold up to 1 metric ton of goods.

Facilitating Improved Forecasting

Multiple partners often handle goods moving through supply chains, especially when those loads require multimodal transport solutions. Clients understandably want progress updates on their container loads so they can plan associated operations accordingly. Managers frequently deploy connected technologies to meet those needs.

For example, the United Kingdom’s Port of Dover has an advanced digital twin that predicts the associated tidal flows and weather conditions, supporting safe arrivals and departures. That tool complements a landside digital twin that optimizes traffic flows and port operations while supporting decarbonization and energy efficiency efforts. Such visibility enhances predictions and reduces the reliance on guesswork. Supply chain clients benefit by passing on more accurate information to their customers, increasing the likelihood of repeat business.

People worldwide have warmly embraced online purchasing, appreciating its convenience and efficiency. In 2023, U.S. B2B ecommerce sales surpassed $2 trillion and U.S. retail ecommerce sales topped $1.1 trillion. And analyses suggest global retail ecommerce sales will surpass $8 trillion by 2027. Shoppers who receive correct estimates of incoming parcels can adjust their schedules accordingly, remaining available when they arrive.

Improving Resilience

Supply chain experts frequently assess their business models, identifying new ways to protect their networks from shocks that could severely disrupt their operations. Many search for process improvement options, knowing that even small tweaks can significantly improve outcomes.

These professionals must focus on the things within their control to minimize the effects of those that are not. Then, they remain better equipped to handle the various fluctuations common to their industries.

Freight indexes are nearly 10 times higher than pre-COVID-19 levels. However, leaders who use AGVs and other automated tools to strengthen their supply chains have more oversight and influence over the impact of supply chain fluctuations. Improvements could free up money in the budget for aspects outside their control.

Decision-makers may implement AGVs as part of more-extensive automation strategies, knowing targeted improvements will keep them competitive and profitable. A logistics company did that to prepare for Singles Day, which has become one of China’s most notable online shopping days. Business leaders created a robust, end-to-end system to support the supply chain from first-mile pickups to last-mile deliveries.

That all-encompassing effort allowed the enterprise to deliver more than 200 million parcels to customers who shopped for the occasion. AGVs played a significant role in the success. A single Thailand warehouse has 100 of the machines, which collectively reduce employees’ walking time by 90%. This example shows that AGVs can support higher efficiencies along the supply chain.

Planning AGV Utilization

Today’s supply chains pose increasing challenges, but automated guided vehicles can overcome many of them. However, any AGV-related plans must carefully consider worker training, traffic flow, tech infrastructure and other necessities.

Addressing those matters early in the process boosts the chance of success and provides a strong return on investment. Getting inspired by supply chain partners currently using AGVs in their processes is an excellent way to explore what is possible.

About the author:

Emily Newton reports on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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Distributor Relevant Industrial launches ShopRelevant.com

Paul Demery — Thu, 25 Jul 2024 17:39:43 +0000

Relevant Industrial is a national distributor of products ranging from temperature control equipment, valves and air compression devices to custom-engineered systems. To provide a more innovative way for customers to procure what they need from those product lines, it has launched ShopRelevant.com.

John Carte, CEO, Relevant Industrial

Relevant Industrial designed and launched the B2B ecommerce site “as a testament to our commitment to innovation and customer-centricity, CEO John Carte says. “We are excited to offer our customers an easier, faster, and more efficient way to access the high-quality products and solutions they need to succeed in their operations.”

Relevant says the new ecommerce provides such features as detailed product information, real-time inventory updates, and streamlined ordering processes. Relevant didn’t immediately return a request for information about the site’s technology infrastructure, but according to BuiltWith.com, it runs on the Magento ecommerce platform.

“The ecommerce platform is designed to cater to the unique needs of our industrial customers, featuring advanced search capabilities, intuitive navigation, and personalized account management tools,” Relevant says. “Customers can easily and purchase products from top brands, track their orders, and manage their accounts all in one place.”

Online Shop Relevant Assistant

Relevant distributes products from such brands as Honeywell, Parker and Ingersoll-Rand, plus Relevant-owned brands including 505 Industrial Supply, Rawson & Industrial Controls and J&W Instruments. Among its customer-oriented features is a drop-down “Shop Relevant Assistant” interactive menu, which prompts customers to click for information on such topics as pricing, product lead time, creating an online account and looking up past orders.

In addition to self-service features for buyers, the new site also supports Relevant’s sales team, the company says.

“Our sales team is thrilled about the launch of the new ecommerce platform,” says John Butts, senior vice president of sales. “This platform not only enhances our ability to serve our customers more effectively but also provides us with valuable insights into customer preferences and purchasing behaviors, allowing us to tailor our offerings and services to better meet their needs.”

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

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At WD-40 Co., ecommerce underpins all “must-win” battles

Paul Demery — Wed, 24 Jul 2024 20:21:10 +0000

WD-40 Co. is reporting positive developments across its global sales operations, and ecommerce is crucial them all, president and CEO Steve Brass says.

We see ecommerce as an accelerator for all our other must-win battles

Steve Brass, president and CEO

WD-40 Co.

Steve Brass, president and CEO, WD-40 Co.

In a recent earnings call, he said the manufacturer and marketer of industrial and residential lubricants, degreasers and cleansers is making progress on its four “must-win” competitive market battles:

Geographic expansion worldwide.
Increasing premium product sales.
Growing its Specialist product line for mechanics and other professionals.
Accelerating digital commerce.

Although Brass listed ecommerce fourth on the company’s must-win list, he said it was critical to the other three.

“We see [ecommerce] as an accelerator for all our other must-win battles, as it improves brand awareness and online engagement, leading to an improved customer experience and sales across all our trade channels,” Brass said on a recent earnings call, according to a transcript from Seeking Alpha.

He added, “Some of our key objectives within this must-win [ecommerce] battle are to build our brand digitally, grow and develop the ecommerce pure play channel, accelerate growth of the omnichannel, and continue capability-building for our employees.”

Brass went on to note that WD-40’s digital commerce strategy resulted in an 18% company-wide year-over-year ecommerce sales increase through the first nine months of its current fiscal year, “with double-digit growth across the company’s three trade blocks of EIMEA (Europe India Middle East Africa), the Americas, and Asia-Pacific.

The company said total net sales rose 9.4% to $155.05 million for the fiscal third quarter ended May 31; net income increased 5.0% to $19.84 million from $18.90 million.

For the nine months ended May 31, net sales increased 9.5% to $434.57 million from $396.80 million as net income rose 7.0% to $52.86 million from $49.42 million.

Growing sales through online distributors

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. WD-40 customers can link directly to these ecommerce sites from WD-40.com.

WD-40 is also taking other steps with digital technology to build on its online interactions with customers and drive up operating efficiency.

An online contest WD-40 launched in 2021, Repair Challenge, has invited customers across more than 40 countries — including “doers, makers, fixers and builders” — to show how use WD-40 lubricants and other products to extend the lifespan of their tools, bicycles, cars and other items. Brass said that, so far, the contest has created over 0.5 billion online marketing impressions worldwide.

WD-40 is also “making foundational investments in systems and data that will allow us to grow faster,” Brass said. For example, he said WD-40 had rolled out Salesforce Inc.’s CRM technology in the U.S. and will be expanding it in the near term, “driving sales efficiencies and effectiveness.”

“Use of data analytics and automated tools, leveraging data is increasing and can be a real enabler for the business,” he said. “The foundational work we are doing now around data governance, centralizing our data architecture and data quality management will allow our people to leverage our data quicker and drive better decision-making.”

Brass added that WD-40 has engaged an investment bank to seek suitors for its U.S. and U.K. home-care and cleaning product brands, which account for about 4% of total sales, and expects to sell them in the company’s 2025 fiscal year.

“Post divestiture, WD-40 Co. will be a more focused company with a higher sales growth and gross margin profile,” he said.

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

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Small businesses see headwinds and ecommerce growth ahead

Mark Brohan — Tue, 23 Jul 2024 21:16:18 +0000

Economic and political risks aside, U.S. small businesses are bullish on their opportunity to gain ecommerce sales experience, according to a survey of 1,000 small merchants from shipping company DHL.

For example, the outlook for ecommerce sales in 2024 remains optimistic among small and medium-sized businesses (SMEs).

65% of respondents anticipate that their ecommerce sales will increase year over year (2024 compared to 2023), with 24% expecting a significant increase and 41% predicting a slight increase, according to the survey.

“The agility of ecommerce platforms allows SMEs to quickly adapt to market changes, manage costs more effectively and reach a broader, global customer base, all without the overhead costs associated with traditional brick-and-mortar operations,” the survey says. “As inflation continues to drive up the cost of goods and services, ecommerce provides SMEs with tools to optimize pricing strategies and streamline supply chains.”

DHL findings on ecommerce sales

Inflation and shipping costs are prominent concerns for ecommerce businesses today. The survey reveals that 40% of respondents view shipping costs as the biggest threat to their business, while 38% identify inflation as their primary challenge. Likewise, 60% of respondents note that inflation is the top issue they will be following for the rest of the year.

International expansion is a key focus for SMEs in 2024. Over half of the survey respondents (53%) see international growth as the biggest opportunity for their ecommerce business. This is further supported by their priority markets for expansion, with 43% targeting the European Union and United Kingdom, and 29% looking toward Mexico and Canada.

“Overall, SMEs remain optimistic about the potential for ecommerce growth despite the economic hurdles,” according to DHL.

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How B2B startup Inhaven is reworking vacation rentals

Paul Demery — Fri, 19 Jul 2024 20:58:44 +0000

When Ashley Ching and her family of six started vacationing in privately owned rental properties instead of hotel chains, she noticed that vacation rentals often didn’t always measure up to their online marketing images.

“You see the pictures online, you like the location, but oftentimes we show up to terrible beds and missing pots and pans,” she says.

The challenge we have today in the vacation rental industry is 25,000 property management companies doing things in different ways.

Ashley Ching, founder and CEO

Inhaven

Ashley Ching, founder and CEO, Inhaven

Ching, a veteran of product sourcing, merchandising and ecommerce, figured there must be a better way to manage the growing U.S. vacation rental business, which, according to research firm AirDNA, totals approximately 1.5 million rental units in the U.S. market.

In September 2022, she founded and became CEO of Inhaven, an online B2B company she launched to raise the operational standards of the short-term vacation rental industry. Ching brought to Inhaven her experience in product sourcing, merchandising and managing brand standards at Tiffany & Co. and in ecommerce at The Home Depot housewares brand The Company Store.

Inhaven deployed a customized a B2B ecommerce site at Inhaven.com on the BigCommerce platform, which it designed to make it easier for property managers and their buyers in the complex vacation rental industry to find and purchase quality products ranging from beds, linens and pillows to bathroom supplies, kitchen utensils and tableware.

Inhaven also has deployed the Zoho CRM application to manage things such as customer application forms and Klaviyo for email marketing.

One of Inhaven’s primary goals is also to establish product standards among the thousands of vacation rental property management companies, who handle about 40% of the U.S. vacation rental market of 1.5 million units, Ching says.

“The challenge that we have in the vacation rental industry today is that there are 25,000 property management companies … 25,000 companies doing things in different ways.”

She asserts that, just as the hospitality industry set higher bed standards decades ago for economy as well luxury hotels, the vacation rental industry needs to follow suit.

Working with suppliers to furnish “Masterpieces”

Ching says Inhaven works with suppliers to provide products that meet quality standards in four levels, from basic (or “Canvas”) to high-end (or “Masterpiece”). It organizes them with images, pricing and other product details on Inhaven.com to simplify how buyers can choose the ones that fit their market and pricing strategy. Buyers for property managers can see which products meet their companies’ purchasing policies.

Inhaven.com has API connections to suppliers to update product details in real time and forward custom orders to vendors for drop-shipping. It works with about 200 brands, including Gibson Home and Martha Stewart.

Ching says Inhaven also uses the Flxpoint drop-ship platform, which “helps us maintain current inventory and supports our order workflows to and from our manufacturers.” It also uses Aftership to track order fulfillment once a manufacturer ships to a customer.

Inhaven is privately funded and doesn’t release revenue figures. But Ching notes that it has been growing steadily since launching in 2022 and now serves buyers for about 55,000 rental units.

“We’ve been doubling sales every quarter since then,” she says.

Going forward, Ching says she hopes to expand on Inhaven’s product standards strategy by working with online travel agencies and rental listing services to identify vacation properties that meet particular Inhaven standards.

“We’re focused on people looking for vacation homes managed by teams committed to these standards, and making it easy for them to find these homes,” she says, adding, “There’s nothing like that in the vacation rental industry.”

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

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