MSC Industrial Supply Co., the ecommerce-focused supplier of metalworking and other industrial products and services, is maintaining its strength in digital sales amid the ongoing pressures of the pandemic.
Ecommerce sales for the first quarter declined by 6.2% to $468.7 million from $499.9 million in the year-earlier period, MSC reported. But ecommerce sales inched up as a percentage of total net sales, to 60.7% from 60.6%, as total net sales declined by 6.3% to $771.9 million from $823.6 million.
Figures for both ecommerce and total net sales improved from the fourth fiscal quarter ended Aug. 29, 2020, when ecommerce and total sales both declined by 11.3% from the fourth quarter of 2019. Ecommerce as a percentage of total sales declined slightly for the 2020 fiscal year as a result of pandemic-related safety products purchased outside of ecommerce channels, MSC said.
But in Q1 2021, as sales of personal protective equipment (PPE) along with other safety and janitorial products grew about 20% over the prior quarter, MSC also reported improved sales of non-safety and non-janitorial product lines commonly purchased via ecommerce channels. 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.
From spot-buy to mission-critical
CEO Erik Gershwind said MSC is also building on its strategy of repositioning the company from a “spot-buy” supplier to a “mission-critical partner” providing a steady stream of products and services to corporate customers.
“We captured this in our new brand promise, Built to Make You Better, and we did so in order to secure the next decade-plus of MSC’s success and to deepen the moat around our business,” Gershwind said today on a conference call with investment analysts, according to a transcript from Seeking Alpha. “We have recreated MSC’s value proposition, remodeled our supply chain with an elevated presence on the plant floor, reshaped MSC’s sales force, built new platforms for growth such as CCSG, and we’ve accelerated the pace of innovation with advancements like MSC Millmax.” CCSG, or Class C Solutions Group, covers MSC’s sale of consumables like industrial fasteners through vendor-managed inventory programs. MSC MillMax is a digital program designed to help customers improve their milling productivity and reduce their costs of durable goods manufacturing.
Gershwind also referred on the call to MSC’s ongoing efforts to invest in “digital capabilities like ecommerce to improve customer retention and loyalty and new pricing function to improve price execution.” And he asserted that, going forward, MSC is positioned to bring out further improvements. “We’ve taken steps to create a more agile culture in order to drive change faster.”
MSC’s formal corporate name is MSC Direct Co. Inc., but it generally goes by the name of its largest business, MSC Industrial Supply Co.
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