Zoro.com, a web-only MRO products distributor, posted a 23% year-over-year gain in second-quarter sales as it expanded its numbers of registered customers and SKUs, parent W.W. Grainger Inc. said today.
DG Macpherson, chairman and CEO, W.W. Grainger Inc.
Grainger attributed the gain in large part to Zoro’s 10% increase in its number of SKUs to more than 10 million. It also attributed it to its competitive position in selling to business customers not targeted by other sellers of maintenance, repair and operations products that companies used to operate their facilities.
‘Nice increases in average order value’
“We’ve seen nice increases in average order value” at Zoro, Grainger CEO DG Macpherson said on an earnings call today. “We expect that to continue to get a little better as we continue to refine our processes to get more repeat business from those business customers.”
Macpherson added that Zoro was increasing its number of large customers as well as its core market of small and midsized companies. In the second quarter, Grainger increased its number of registered users to 4.236 million, up 16% from a year earlier. Macpherson said he expects Zoro to continue increasing its SKU count to about 20 million over the next four or five years.
Grainger doesn’t break out sales for Zoro.com, which along with Japan-based MonotaRo.com makes up Grainger’s online-only Endless Assortment business segment. But Grainger noted that Zoro’s 23% increase in Q2 helped to grow Endless Assortment sales 11.4% to $719 million. It did so despite a negative impact on MonotaRo’s growth resulting from Japan’s depreciating Yen.
Gains in total ecommerce sales
Grainger did not break out the company’s total Q2 ecommerce sales. In recent years, it has said ecommerce represents about 60% or more of total sales. Based on those figures, Grainger’s total ecommerce sales were about $2.34 billion. That’s up 21.9% from about $1.92 billion a year earlier.
Going forward, Grainger expects to gain market share as it helps more companies manage their MRO inventory “so they’re not overstocked,” Macpherson said. “We feel we can gain market share consistently and that we built the right relationships and processes.”
For the second quarter ended June 30, Grainger reported:
- 60% year-over-year increase in net earnings to $389 million.
- 28% increase gross profit to $2.40 billion, for a gross margin of 37.6%, up from 35.0%.
For the six months ended June 30:
- 19.0% increase in net sales to $7.48 billion.
- 55.4% increase in net earnings to $774 million.
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