W.W. Grainger Inc., in recent financial and corporate strategy presentations, has laid out how it is relying heavily on digital commerce as it plans to continue growing sales and market share in the highly fragmented market of distributing business and industrial products.
Last week, the multibillion-dollar company took another step in that growth strategy by hiring a veteran of digital technology and business strategies as its new chief technology officer, Grainger announced last week.
Jonny LeRoy—a long-time digital technology consultant at technology consulting firm Thoughtworks who advised such digital pioneers as Alphabet Inc.’s Google, Gap Inc. and America Online (AOL), according to his LinkedIn page—has joined Grainger “in a significant step in our digital evolution, as Grainger defines the future of technology and distribution for our customers and partners,” Paige Robbins, senior vice president and Grainger’s chief executive in charge of technology, marketing, strategy and merchandising, said last week in announcing LeRoy’s appointment. LeRoy reports to Robbins, who reports to CEO D.G. Macpherson, a spokesman said.
Developing more modern technology
LeRoy “will lead teams across Grainger’s Technology Group to build capabilities that complement and advance the company’s strategy and business model,” Grainger said in a statement announcing LeRoy’s appointment. “This will include creating a more modern technology and next-generation engineering culture that enables growth through stronger competitive advantages.”
“Jonny is an industry leader who sees technology as a fundamentally creative act, and believes in the value of bringing together a range of skills and people to solve problems,” Robbins said. “Technology powers our strategy, and Jonny’s leadership will support and advance our goals of combining our more than 90 years of experience with our digital expertise to offer customers the best products, solutions and services today, and anticipate their needs in the future.”
LeRoy joins Grainger at a time when the company has been expanding its technology staff and increasing investment in its ecommerce sites, including its flagship Grainger.com for enterprise customers and its Zoro.com and MonotaRO.com portals for smaller businesses in the United States and overseas. Among the company’s developments in recent years is an expansion to some 600 technology professionals at its downtown Chicago location at the Merchandise Mart, itself a hub of digital technology expertise.
At ThoughtWorks, where LeRoy worked for 15 years, he most recently “led their North America technology organization, growing new offerings and capabilities, while also helping to progress their talent, culture and delivery expertise,” Grainger said, adding: “In this role, he also contributed to doubling the size of their North American business, championing the introduction of mobile and IoT capabilities into the business, and embedding security-thinking and practices into their software delivery culture. He has advised many organizations across the retail and logistics sectors through similar modernization journeys including Gap, Nordstrom, Google and Box.”
An eye on growing market share
Among Grainger’s strategic goals is to use its expertise in electronic commerce to continue growing sales and market share in its core market of selling maintenance, repair and operations (MRO) product that companies use to run their industrial facilities. For 2019, Grainger reported that its ecommerce channels—which include sales tied to its ecommerce sites, internet-connected vending machines, procurement software and EDI—amounted to about $8.2 billion, or 71% of total sales of $11.5 billion. For the first quarter ended March 31, Grainger said its total sales increased 7.2% to more than $3 billion, which would put its total ecommerce sales up about 8.7% to more than $2 billion.
Grainger says on its website that its market share in 2018 for MRO products was 4% worldwide and 7% in the United States. Macpherson says Grainger’s ongoing strategy is to continuously grab more industry market share. In the company’s recent first-quarter earnings call with investment analysts, Macpherson and chief financial officer Tom Okray noted that the company gained market share at an increasingly faster rate during the market disruption caused by the coronavirus.
With LeRoy as its new chief technology officer, Grainger has a digital technology expert set to help that growth continue. “My focus is on nurturing and growing talent, and building an engineering culture that will deliver more modern capabilities and functionality to take Grainger to the next level,” LeRoy says.
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