Kimberly-Clark Corp., a manufacturer best known for brands such as Huggies and Kleenex, is closing in on $2 billion in ecommerce sales.
But how Kimberly-Clark defines ecommerce is different from web sales completed in a shopping cart on a business-to-consumer website or an online transaction done by a business buyer once they’ve logged into a B2B portal. At Kimberly-Clark, the manufacturer describes ecommerce sales as coming from business-to-consumer, business-to-business, business-to-business-to-consumer and even counting the web sales of its products on a retailer’s website.
To some ecommerce analysts, manufacturers inflate their actual figures on B2B ecommerce sales when they count online sales that are not processed through their own ecommerce sites and portals or through an online marketplace such as Amazon Business. “I work with a lot of manufacturers these days, and they often define ecommerce differently,” says B2B ecommerce analyst and researcher Brian Beck. “They lump in the ecommerce sales of their retail or distribution partners into what they call ecommerce—they aren’t actually conducting the ecommerce themselves since the transactions happen on sites like Home Depot, Lowe’s, Ferguson, Grainger and others.”
But at Kimberly-Clark, the company applies a broader definition of ecommerce to account for the multiple ways a big international brand manufacturer deals digitally with consumers and customers across multiple channels. Even if it defines ecommerce differently, ecommerce in all forms is now a corporate priority, CEO Michael Hsu told analysts on the company’s 2018 year-end earnings call, based on a transcript from SeekingAlpha.com. “Ecommerce is an important and growing part of our business,” Hsu said. “It’s about 10% of overall revenue.”
With total sales flat, ecommerce grows 12%
With total 2018 sales of $18.48 billion, ecommerce at 10% of all revenue means Kimberly-Clark generated ecommerce sales of $1.85 billion, B2BecNews estimates. While year-over-year total sales were essentially flat, ecommerce grew 12.7% to $1.85 billion from $1.64 billion in 2017.
In recent years, overall business for Dallas-based Kimberly-Clark has been tough due to a “challenging macro environment,” the company says. In 2018 the company announced layoffs and factory closures as part of a restructuring plan aiming to save up to $2 billion in the next four years.
But as part of a restructuring, Kimberly-Clark is making ecommerce a bigger strategic priority tied to a new initiative known as K-C Strategy 2022. With that initiative, it wants to better manage its supply chain, improve product development and develop a bigger ecommerce strategy. “This (ecommerce) channel is growing double digits,” Hsu told analysts.
Kimberly-Clark has yet to release much detail but in general will look to grow ecommerce through better digital and data-driven marketing. “We have a very strong digital program in ecommerce across all our customers and I think that’s really working a good effect right now,” he said.
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