The coronavirus has hit many distributors hard and in the process had a negative impact on sales—including for ecommerce.
But an exception thus far is Watsco Inc., a prominent distributor of heating, ventilation and air-conditioning supplies. While a slowing U.S. economy has shuttered all or big portions of major industries, Watsco is reporting another quarter of growing business-to-business ecommerce sales.
For the second quarter ended June 30, Watsco posted:
• An increase in ecommerce sales to $447.30 billion, accounting for about 33% of all sales of about $1.355 billion. The company didn’t provide a similar metric for the second quarter for the prior year, but noted that the 33% ecommerce share of total sales was up from 29% as of the end of last year. “Ecommerce sales continued to grow at a faster pace than overall growth,” the company says.
• Total sales declined 1.2% to $1.355 billion from $1.371 billion in the second quarter of 2019.
• Net income was $104.2 million in the second quarter of 2020 vs. $107.9 million in the second quarter of 2019.
• The distributor carries an inventory of about 700,000 SKUs.
• The Watsco mobile app now totals 100,000 downloads.
“Adoption and use of our mobile apps and ecommerce platforms have increased significantly, as more customers use our technology,” Watsco CEO Albert Nahmad told Wall Street analysts on the company’s second-quarter earnings call. “Our best measurement of impact is that customers that use our technology, generally are growing faster than non-users of our technology.”
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 convert its branch locations into drive-by and pickup spots for online orders, Watsco told analysts.
“Our contractors’ fulfillment activities, which we refer to as curbside or dockside pickup, expanded to more locations and soon will include contactless payment functionality—it’s in the early days, but adopting and growth has been terrific to this point,” he told analysts. “We believe these capabilities provide a differentiated customer experience by engaging with us digitally in every way.”
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