Watsco, a distributor of HVAC equipment, is engaging more customers online with such features as a mobile app and web personalized content.

For a company that likes to stay low-key within its industry, Watsco Inc.’s high-profile commitment to business-to-business ecommerce speaks volumes about where it is heading as a company.

Watsco, a Miami-based company in business for 72 years, cashed out of the manufacturing business in 1998 in order to concentrate on distributing heating, ventilation and air-conditioning equipment. Now, as one of the largest distributors of HVAC equipment and related parts and supplies, it counts on ecommerce to generate more than one-fourth of all sales.

Speed, productivity and efficiency will be ever more critical as the digital era progresses.
Albert Nahmad, CEO, Watsco

Last year, ecommerce accounted for 26.4% of total sales, up from about 21% in 2017, as ecommerce sales increased by about 33% to $1.2 billion from $900 million. Total sales, meanwhile, increased 5% to $4.54 billion from $4.34 billion.

Investing in progressive technologies

“We have made massive investments to equip our customers with the industry’s most progressive technologies, including ecommerce, mobile apps, order fulfillment functionality and supply chain optimization,” Watsco CEO Albert Nahmad told Wall Street analysts on an earnings call earlier this year.All of these technologies are rooted in the belief that speed, productivity and efficiency will be ever more critical as the digital era progresses.”

In the past few years, Watsco has built up its online inventory from virtually nil to now more than 685,000 SKUs. “We have made progress and are seeing early returns such as reduced customer attrition rates, improved inventory quality and exciting sales growth for customers that are leveraging our technologies,” Nahmad told Wall Street analysts.

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Watsco is a relative newcomer to ecommerce. The company, which operates four divisions—Carrier Enterprise, Gemaire Distributors, Baker Distributing, and East Coast Metal Distributors—launched online in 2014 using Magento ecommerce technology from Adobe Inc.

Watsco is a relative newcomer to ecommerce. The company, which operates four divisions—Carrier Enterprise, Gemaire Distributors, Baker Distributing, and East Coast Metal Distributors—launched online in 2014 using Magento ecommerce technology from Adobe Inc. It sells online through separate websites for each of its divisions: CarrierEnterprise.com, Gemaire.com, BakerDist.com and ECMDI.com. Watsco also sells through several mobile apps, including ones designed for Gemaire and for Carrier Enterprise.

A banner online year in 2018

But 2018 was a banner year for growth in ecommerce based on a variety of metrics, including a year-over-year increase of 34% in the number of ecommerce transactions, the company says. App downloads stand at 15,000 and the total number of online customers now exceeds 8,000.

In the past year, Watsco has also made new investments in other digital technology such as better analytics and product content, personalization and the use of artificial intelligence. These have added to ecommerce developments it has made in recent years.

“We have made progress and are seeing early returns such as reduced customer attrition rates, improved inventory quality and exciting sales growth for customers that are leveraging our technologies,” Nahmad says.

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