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How Grainger Wants to Target Smaller Customers Online

How Grainger Wants to Target Smaller Customers Online

March 18, 2011
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Sales online for Chicago-based Grainger (GWW) comprised 25 percent of business in 2010, with a total of $1.8 billion in sales.

At the recent Raymond James Institutional Investor Conference, Grainger CFO Ron Jadin discussed the distributor's ongoing plans for its rapidly expanding eCommerce platform, its most profitable channel. "People aren't using the catalog as much as they used to," he said. The website is especially attractive to small- or medium-sized customers, who do not receive the same level of marketing message as perhaps larger customers do.

In that vein, as it continuously improves its website, the distributor wants to make the messages customers receive on the site more relevant to their needs. Grainger plans to customize customers' views depending on the log-in information the customer has provided, Jadin said. For example, a health care-based customer can log-in and see marketing messages that are relevant to the types of products he is looking to buy.

I imagine this could be a critical part of Grainger's online strategy given its increasingly diverse customer base and product offering. It has also repeatedly said in the past year that it wants to attract more small- and medium-sized customers, which may be harder to reach with traditional marketing and sales efforts.

Since 2006, according to Grainger's 2010 annual report, the distributor has added 234,000 new products to supplement its offering in plumbing, fastener, material handling and security products. The catalog issued in February 2010 had 70,000 more products than the 2009 catalog. The distributor wants to eventually offer 500,000 products in its catalog. And of course, it already has that many online, where it's able to offer more at a lower cost-to-serve, as well as test product offerings.

Learn more about Grainger's journey in eCommerce: Grainger's eCommerce Evolution

Also at the conference, Jadin said the distributor plans to continue to grow its inventory service programs; KeepStock, which helps businesses gain a more thorough understanding of their inventory needs and better inventory management, currently has 12,500 installations. Jadin said the distributor believes they can grow that number to upwards of 30,000.

Grainger provides a variety of inventory management services, from reordering stockrooms and vending machines to on-site staff or branches.

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