The business front in the heating, ventilation and air conditioning market is shifting. And one of the industry’s biggest distribution companies, Watsco Inc., believes its digital technology base is the best way to keep in step with the times.
“We have immense technology advantage in our marketplace, and we are investing to grow that advantage — to grow with that advantage,” Watsco CEO Albert H. Nahmad said yesterday on the company’s second-quarter earnings call. “Our technology investments are paying dividends in the form of higher customer engagement, reduced attrition and substantial market share gains.”
For the quarter ended June 30, Miami-based Watsco reported sales of $2.13 billion. That’s a 15.1% increase from sales of $1.85 billion for the second quarter of 2021. Net income was $225.5 million, versus $172.1 million in 2021’s second quarter.
Ecommerce now represents about 33% of Watsco’s total sales, and its online channel grew 25% in the second quarter, the company says. Based on those metrics, Digital Commerce 360 projects that ecommerce sales grew year over year to $702.9 million. That would be up 25% from $562.0 million in Q2 2021.
“Ecommerce sales grew 25% year-to-date with the annual run-rate, outpacing organic sales growth rates, and now exceeds $2.2 billion annually,” Watsco says.
Other digital metrics include:
- Watsco’s product information management (PIM) database now includes approximately 1.2 million SKUs. More than 350,000 contractors and technicians assess them on an annual basis.
- The number of HVAC contractors using Watsco’s commerce-enabled mobile app grew 27% in the second quarter to more than 32,000 users.
- Watsco’s digital sales platform that HVAC contractors use, and its companion consumer financing system, generated quotes to approximately 73,000 households. They also generated $300 million in gross merchandise value.
“Our technology platforms have facilitated growth in Watsco’s market share, new customer acquisition and margin expansion,” Nahmad says. “As the industry evolves to operating in the digital age, Watsco’s technology tools will provide added value to an ever-growing number of contractors.”
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