Customers of Fastenal Co. want the flexibility to order via multiple digital channels including a self-service web shop, vending machines and vendor-managed inventory systems, and the industrial and construction supplies distributor says it will continue on its course of expanding its digital sales capabilities.
At the same time, Fastenal will use the data it compiles through digital channels to improve its ability to serve customers and operate more efficiently, Fastenal said yesterday in announcing its fourth quarter and full-year financial performance.
“The data that is created through our digital capabilities enhances product visibility, traceability, and control that reduces risk in operations and creates ordering and fulfillment efficiencies for both ourselves and our customers,” the company said yesterday in announcing its fourth-quarter and full-year 2023 financial performance.
It added: “As a result, we believe our opportunity to grow our business will be enhanced through the continued development and expansion of our digital capabilities.”
Fastenal digital channels
In a Q4 and year-end earnings call yesterday, Fastenal executives elaborated on the value of each of its digital channels — including its FASTVend vending devices and FASTBin product bins, each of which Fastenal embeds with digital technology to track product sales; and what Fastenal defines as ecommerce, including self-service online purchasing via Fastenal.com and electronic transactions conducted through EDI.
They also clarified during a Q&A period with investment analysts that the FASTVend and FASTBin services do not cannibalize Fastenal’s self-service ecommerce sales.
“The customers are looking for a range of solutions to solve different [purchasing] issues,” said senior executive vice president and chief financial officer Holden Lewis.
Fastenal Q4 and year-end results
Dan Florness, president and CEO, noted that ecommerce sales have steadily climbed as a percentage of total sales, rising to about 25% in 2023 from about 5% several years ago.
For the fourth quarter, Fastenal said that all digital sales, including ecommerce and the FASTVend and FASTBin transactions — which in aggregate make up what Fastenal calls its “digital footprint” — accounted for 58.1%, or $1.02 billion, of $1.76 billion in total net sales. That’ s up from 52% a year earlier. Fastenal didn’t break out total digital sales for all of 2023.
Fastenal also said that its digital purchasing options play a vital role at its Onsite vendor-managed inventory locations, which it manages at or near customers’ facilities. The company said it increased its number of Onsite locations by 12.3% last year to end 2023 with 1,822 active sites.
“We arm that Onsite with all the tools we have in place, whether it be vending machines or technology-embedded bins … it’s just a much more efficient way to operate,” Florness said on the earnings call.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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