The B2B e-commerce market continues to rapidly evolve, with a handful of its largest players recently sharing key updates on their activity in online sales.
Here’s a rundown of updates on some of the most well-known B2B distribution businesses, as well as general e-commerce market updates.
At its annual Grainger Show in Orlando on March 13, Grainger CEO D.G. Macpherson stated that 60 percent of the industrial distribution giant’s 2016 sales came via e-commerce. Fifty percent of the company’s sales came from Grainger.com and its EDI/e-procurement, with the other 10 percent coming from its KeepStock offering and inventory management. That 60 percent is a considerable jump from 41 percent in 2015. Beyond that, Macpherson said he’d be surprised if that figure isn’t 80 percent by 2022.
Throughout 2017, Grainger will be reconfiguring its online pricing model, which Macpherson said is currently too high.
“As product price and transparency has become more relevant, it’s become a source of contention with customers, and we don’t need that,” Macpherson said. "We don't need to have the lowest price; we just need to be in the ballpark."
Grainger is No. 3 on Industrial Distribution’s Big 50 List and the largest industrial distributor based in the U.S.
Like Grainger, fellow large industrial distributor HD Supply recently said 60 percent of its 2016 total sales happened online — up five percentage points from a year earlier. In the Atlanta, GA-based company’s full-year fiscal earnings conference call with analysts on March 14, CEO Joe DeAngelo said HD Supply’s 2016 e-commerce delivered double-digit growth from 2015.
"Our clarity has informed our current execution priorities and also helped crystallize an exciting multi-year customer centric digital vision," DeAngelo said. "We made significant investments in our digital foundation across all areas of the business as well as the customer’s daily e-experience."
HD Supply is No. 6 on Industrial Distribution’s Big 50.
Three months after announcing its first overseas expansion to Germany and India, Amazon Business announced April 4 that it has officially launched in the United Kingdom, further evidence of success for the Amazon’s B2B segment.
Adding the regions of England, Wales, Scotland and Northern Ireland, Amazon adds an online B2B market that was valued at $120 billion in 2015 by Newport, England-based Office for National Statistics.
Amazon Business UK will sell more than 100 million products, with the unit targeting small, mid-size and large businesses by offering a range of products from industrial tools, to office supplies, to janitorial/sanitation equipment.
Amazon Business UK will offer free one-day delivery on orders over 30 British pounds ($37.30), VAT exclusive pricing and in-depth analytics that allow purchasing managers to track spending.
Formerly Amazon Supply, Amazon Business was first launched in the U.S. in April 2015. In its first year, it exceeded $1 billion in sales and had more than 300,000 purchases made on the platform from 30,000 businesses as of May 2016, when it also said customer purchases were growing at about 20 percent each month. This past Jan. 4, the company said its customer count had grown to more than 45,000 different sellers and more than 400,000 total customers — doubling the count it stated a year earlier. Overall, the unit has been adding about 100,000 customers per quarter.
Last September, reports surfaced that Amazon Business chief executive Prentis Wilson identified Grainger and Staples as the division’s key rivals. Meanwhile, Macpherson said Grainger views Amazon as both a competitor and a customer.
Industrial Distributor E-Commerce Utilization Increases
Industrial Distribution’s 2017 Survey of Distributor Operations — the publication’s 70th annual edition, and completed in late March — showed that 63 percent of respondents say e-commerce is a priority for them, up more than three percentage points from a year earlier. The amount of distributors who said their business is currently generating online sales also edged up 1.2 points to 57.1 percent. While these figures show there’s still plenty of online industrial B2B market to be tapped, more and more distributors in this space are getting on board with e-commerce.