Business and industrial products distributor Systemax Inc.—whose flagship digital sales channel is GlobalIndustrial.com—is planning for more robust growth this year following a strong finish to a tumultuous 2020. Thanks in large part to ongoing improvements in how it personalizes the online customer experience, the company’s overall sales surged by 23.3% year over year in the fourth quarter of 2020, as Systemax topped $1 billion in total sales for the year.
CEO Barry Litwin says that performance coincides with the company’s strategic efforts in recent years to upgrade its digital operations with personnel and web technology designed to make online buying easier and more valuable for customers. This process enables Systemax to more effectively engage them through digital marketing, Litwin says.
“For the last two years, our strategy has been focused around digital improvements,” Litwin said in a recent interview. And in a year like 2020 with the disruption caused by the pandemic, that strategy made a positive difference, he added.
“We’ve always been a nimble company that could shift quickly, and we’ve accelerated that flexibility. That really helps us this past year.”
“As we go into 2021,” Litwin added, “we’ll continue to see improvements in website user experience and design.”
Building a destination for expert advice
The improvements range from the basics of website functionality to more highly personalized web content and digital marketing, he said. This has included improved website taxonomy for better site navigation and product discovery as the company expands available online inventory, plus improvements to checkout and order status notifications.
“We’re also embarking on a whole new content strategy to educate the market about industrial products and become a destination for expert advice,” Litwin said.
“It’s not just about our ecommerce sites,” he added, “but also digital marketing improvements.” These improvements have included marketing campaigns triggered by customers’ online activity to present them with personalized product offers.
Systemax is also coordinating with its digital marketing efforts information on customers’ interests through communications with sales agents and records in the company’s customer relationship management system.
The company’s personalized web content and personalized marketing triggered by buying behavior have had a noticeable effect on sales by engaging and retaining customers as buyers. “Customer retention has grown leaps and bounds,” Litwin said.
“We also have plans to bring in a new personalization technology platform,” he added.
A team of digital commerce experts
In addition, the company has been building out a team of experts over the past couple of years experienced in both retail and B2B commerce, including Klaus Werner, the chief marketing officer, who has developed a new brand strategy, and Claudia Hughes, a former vice president of the Business Solutions Division at Office Depot, who joined Systemax last month as senior vice president and chief sales officer.
“We will continue to invest in our growth and believe our strategy has tremendous relevance in the marketplace today,” Litwin said in a statement announcing the company’s fourth-quarter and full-year 2020 results. “With rapid improvements made to our end-to-end customer experience and the further evolution of our ecommerce platform, we are strengthening our competitive position and see accelerated customer acquisition and retention.
As a result, we believe we are well-positioned to continue to capitalize on the growth of B2B e-commerce and to capture additional market share in a highly fragmented industrial distribution marketplace.
For the fourth quarter ended Dec. 31, 2020, Systemax reported:
- Net sales increased by 22.3% year over year to $273.9 million;
- Gross profit increased by 24.1% to $93.1 million resulting in a gross margin of 34.0%, up from 33.8%;
- Net income from continuing operations increased by 43.9% to $16.4 million.
For the full year, Systemax reported:
- Net sales increased by 8.7% to $1.029 billion;
- Gross profit increased by 9.6% to $356.9 million, resulting in a gross margin of 34.7%, up from 34.4%.
- Net income from continuing operations increased by 28.2% to $64.1 million.
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