Watsco, a prominent distributor of heating, ventilation and air-conditioning supplies, reported a 12% increase in first-quarter ecommerce sales.

The coronavirus is having a whipsaw impact on the quarterly ecommerce sales for lots of big distributors.

Branch locations were quickly transformed from retail walk-in showrooms to no-touch ecommerce curbside pickup centers.
Albert Nahmad, CEO
Watsco Inc.

But the impact can vary widely from one vertical market to another. MSC Industrial Supply Co. and W.W. Grainger Inc., a pair of the biggest public distributors of maintenance, repair and operations (MRO) products, both reported fluctuating sales in March and April because of the economic impact of the coronavirus. Grainger, for the first quarter ended March 31, digital sales through all electronic channels grew about 8.7% as total sales increased 7.2%, but total sales fell by 10% for the first three weeks of April, the company says.

For MSC Industrial Supply, fiscal second-quarter ecommerce sales for the period ended Feb. 29 were down 3.1% from a year earlier, as total sales declined 4.5%, MSC says.

Other distributors in other verticals are reporting increases in online sales—at least for now. A case in point is Miami-based Watsco Inc, one of the biggest and oldest distributors of heating, ventilation and air-conditioning equipment, whose digital and total sales increased in the first quarter.

 Investment in ecommerce

Watsco’s ecommerce sales for the first quarter ended March 31 increased by 12% to about $363.0 million from about $324.0 million in the year-earlier period. In comparison, total sales grew by 8.3%, to $1.008 billion from $931.27 million. Digital sales now account for about 36% of all sales, the company says.

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AlbertHNahmad-Watsco

Albert Nahmad, CEO, Watsco Inc.

The increase in ecommerce sales is attributable to the distributor’s continued investment in ecommerce, growing use of its mobile app and the ability to covert its branch locations into drive-by and pickup spots for online orders, Watsco CEO Albert Nahmad told analysts on the first-quarter earnings call, according to a transcript from The Motley Fool website, Fool.com.

“Branch locations were quickly transformed from retail walk-in showrooms to no-touch ecommerce curbside pickup centers,” Nahmad told analysts. “These changes have been well-received, and our customers are asking us to sustain these services going forward.”

Business for Watsco also is up in general because its market has been classified as essential by various government bodies because of the coronavirus, Nahmad told analysts. “Local authorities in our markets have deemed our industry as essential,” he said. “Our branches are open, providing needed products and services to our contractor customers.”

Multiple HVAC ecommerce sites

Adoption and use of Watsco’s ecommerce platform continue to grow, the company says.

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Watsco operates four divisions—Carrier Enterprise, Gemaire Distributors, Baker Distributing, and East Coast Metal Distributors—and launched online in 2014. It sells online through separate websites for each of its divisions: CarrierEnterprise.comGemaire.comBakerDist.com and ECMDI.com. Watsco also sells through several mobile apps, including ones designed for Gemaire and for Carrier Enterprise.

Watsco also reported the following first-quarter digital metrics:

  • About 25,000 contractors and others now use Watsco’s mobile app on a weekly business, up 94% from a year earlier;
  • Watsco now processes and fulfills more than 7 million orders annually to more than 300,000 contractors and technicians, increasingly through the use of digital tools including ecommerce and mobile apps;
  • The number of SKUs available online is now about 728,000.

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