W.W. Grainger Inc., a distributor of business and industrial products, is on track to do more than three-quarters of its total sales through e-commerce, CEO D.G. Macpherson said this week.

Grainger CEO D.G. Macpherson

Macpherson, speaking to reporters at Grainger’s summit for customers and suppliers in Orlando, said the company has an ongoing program to improve how it serves customers through Grainger.com and increase the share of Grainger’s sales through e-commerce.

“I’d be surprised if five years from now our sales are not 80% e-commerce,” he said. He added that e-commerce has become a purchase point and an acquisition vehicle for “every type of customer.”

Indeed, Macpherson pointed to his company’s expertise in e-commerce and in providing customer service to large customers with complex needs as two of the key areas that will help Grainger drive stronger growth and build market share during challenging economic times. Grainger’s total sales dipped 0.3% in the fourth quarter, to $2.47 billion, and declined 1.6% to $10.14 billion for the year ended Dec. 31. By contrast, e-commerce sales grew 16.4% year over year in 2016 to $4.76 billion, bringing e-commerce to 47% of total sales, and Macpherson said Grainger is working hard to maintain that momentum.

Macpherson attributed the poor overall sales performance to a drop in industrial demand for its products, notably in the oil industry. He said Grainger has been able to gain market share, “but it’s harder to do.”

Going forward, the distributor will compete harder with ongoing improvements to its e-commerce sites and more competitive pricing, he said. “Digital will be a big part of this,” he said. When Grainger makes the “price right and the digital solution right” for customers, “they want to use Grainger.” While expecting e-commerce to account for 80% of sales within five years, Macpherson noted that e-commerce already accounts for more than 60% when including sales through its internet-connected KeepStock vending machines placed at customer locations.

Geoff Robertson, vice president of global digital business and innovation, demonstrated some of the improvements the company has made to its flagship e-commerce site, Grainger.com, in its effort to make shopping easier and faster for customers. For example, rather than just figuring the best keywords to search for particular products among the 1.9 million available on Grainger.com, Grainger has been upgrading its search-and-navigation technology to let buyers first choose among their most important criteria, Robertson said.

For example, customers looking to purchase a threadlocker—a material used to coat and protect metal threads in machinery—typically must choose among such criteria as the material’s bonding strength, the temperature of the machine that will use the threadlocker, the threadlocker material type (gel, liquid or solid), the time it takes to harden after applying it to machinery, and the type and size of container the threadlocker comes in. In the past, customers would search by such general criteria as brand or price, then check each product description for the other criteria.

Now when buyers enter “threadlockers” in the Grainger.com search window, they arrive at a Threadlocker Buying Guide that lets them choose strength level and other specific criteria, which instantly produces a list of products each featuring the chosen attributes.

Another new shopping feature lets buyers on factory floors or other locations without ready access to a computer use a Grainger mobile app in their cell phone to capture the image of a printed Grainger catalog page that shows listings of products without prices. They can then instantly view an image-rich version of the page with the buyer’s contract pricing on their phone and place an electronic order.

Another new feature personalizes content that contract buyers view when they land on a Grainger.com page by punching out from their e-procurement software. Under a prior system, such buyers would have to search and navigate to find the products they typically buy; the new personalized system recognizes the registered buyer and displays content related to the products and categories they typically purchase.

Grainger has also streamlined the checkout process, reducing it from eight pages to two. The first page lets buyers fill out several data windows on such things as ship-to addresses, delivery methods and payment information without leaving the page, then use the second page to confirm all their information and click to complete the purchase.

Robertson said Grainger has launched these improvements over the past several months. He said he was unable to comment on specific results in customer activity or sales, but noted that Grainger has seen “significant” improvements in the number of products that customers have added to carts after searching for them, and the number of carted products for which customers have completed purchases.

Elizabeth Casatelli, a product marketing manager for Loctite, a supplier to Grainger of threadlockers exhibiting at the Grainger Show, said the new threadlockers buying guide on Grainger.com was an important way to help industrial buyers quickly find and buy what they need, especially when they don’t have time to order through a sales rep. She said she couldn’t comment on any noticeable results yet in sales activity, or whether other distributors of Loctite products were also offering similar online buying tools.

Grainger has so far provided new search and navigation tools for “close to 50%” of Grainger’s top-selling products, Robertson said, without providing more specifics. With 1.9 million SKUs, he couldn’t say when or if they would all have upgraded search tools.

Customers at the show this week seemed to appreciate Grainger’s online improvements, but noted there’s always room for improvement. “Sometimes we search for something and get the wrong thing,” John Lange, a manager at Grainger customer Olsun Electrics Corp., a Richmond, Ill., manufacturer of electric transformers and related products, said in a brief interview. Nonetheless, he said that Olsun, which sells many of its transformers online to large industrial customers, buys from Grainger for the overall level of online and offline service it offers.

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