The distributor of metalworking and other industrial supplies and services is carrying out a multi-pronged approach to upgrade its ecommerce technology and operations as one of its major growth priorities, CEO Erik Gershwind said today.

MSC Industrial Supply Co., already a prominent player in B2B ecommerce, is refocusing on its digital channels as a critical way to support growth at the multibillion-dollar distributor, president and CEO Erik Gershwind said today.

MSC will focus on our website and other digital tools to bring us closer to customers and build higher levels of loyalty and retention.
Erik Gershwind, president and CEO
MSC Industrial Supply Co.

“Ecommerce has long been a strength of ours, and it represents about 60% of our sales today,” Gershwind said in a conference call with investment analysts, adding: “However, standing still is not an option. So we’re raising the bar on ourselves to produce a better experience for our customers.”

The revised focus on digital comes at a time when MSC is planning for growth ahead of the pandemic, which led to declines in both online and total sales this year.

For the fourth fiscal quarter ended Aug. 29, MSC said ecommerce sales declined by 11.3% year over year to $448.5 million. Ecommerce sales for the full fiscal year declined by 6.5% to $1.89 billion, accounting for 59.1% of total sales. Ecommerce as a percentage of total sales declined slightly for the year as a result of pandemic-related safety products purchased outside of ecommerce channels, MSC said.

Staffing a new digital team

Going forward, however, MSC figures digital commerce as one of its main growth drivers.

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Gershwind noted today that MSC’s recently hired vice president of ecommerce, Faisal Hussain, is “staffing a new team with deep digital experience” with a focus on improving MSC’s web platform with a “new search engine, new user experience and a new front-end transactional engine.”

The new digital team “will focus on our website and other digital tools to bring us closer to customers and build higher levels of loyalty and retention,” he said.

Hussain, who fills a newly created position of vice president of ecommerce, came to MSC from Ingram Micro, a $50 billion distributor of IT products, where he was executive director of global product management and UX (user experience). Prior to Ingram Micro, Hussain served in multiple positions  related to ecommerce product engineering at office supplies retailer and distributor Staples, internet services provider Comcast and Apptix, a provider of internet-hosted business services now known as Fusion Connect.

MSC defines ecommerce sales as all sales through its ecommerce sites, including its flagship MSCDirect.com, internet-connected vending machines, vendor-managed inventory (VMI) programs, XML-based ordering systems, EDI systems, and other web-hosted systems and electronic portals. The company does not include in its total ecommerce sales figure online sales from its All Integrated Solutions and MSC Mexico operations.

Building on MSC MillMax and government sales

Gershwind said that building out MSC’s digital commerce staff, technology and capabilities was one of five growth priorities MSC is focusing on as part of an overall plan to drive annual growth at a rate faster than the total market of metalworking and maintenance, repair and operations (MRO) products and services.

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For the four other growth priorities, MSC is focusing on building out its core business of providing metalworking products and services; upgrading its business of selling and cross-selling consumable products; expanding such programs as vendor-managed inventory and internet-connected vending machines; and focusing on more diversified markets. As part of its overall efforts, MSC has been repositioning “from a spot buy supplier to a ‘mission-critical’ partner on the plant floor of our industrial customers,” the company says.

In metalworking, MSC plans to continue to develop value-added services such as MSC MillMax, a recently introduced service that lets customers access data and analytics to optimize their machining operations with the most productive settings of milling machines; and it plans to increase its number of metalworking experts by 25% this year. MSC’s website notes that it currently has “over 100 metalworking specialists and technicians nationwide.”

Among its efforts to expand market diversity, MSC is focusing more on the government market, adding dedicated salespeople and planning to build on the sales momentum resulting from an increase in demand for safety and other products related to the pandemic, Gershwind said.

MSC’s formal corporate name is MSC Industrial Direct Co. Inc., but it generally goes by MSC Industrial Supply Co., the name of its primary business unit.

For the fiscal fourth quarter ended Aug. 29, MSC reported:

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  • Ecommerce sales of $448.5 million accounted for 60% of total sales of $747.7, as total sales fell 11.3% year over year;
  • Gross profit declined by 12.0% to $311.1 million, resulting in a gross profit margin of 41.6%, down from 42.0%;
  • Net income declined by 21.0% to $52.64 million.

For the full fiscal year ended Aug. 29, MSC reported:

  • Ecommerce sales of $1.89 billion accounted for 59.1% of total sales of $3.19 billion, as total sales fell 5.1% year over year;
  • Gross profit declined by 6.2% to $1.34 billion, resulting in a gross profit margin of 42.1%, down from 42.6%.
  • Net income fell by 12.8% to $251.76 million.

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