In like a lion, out like a lamb. In case you missed it, July 1 marked the demise of Grainger's digital businesses. After not getting other distributors interested in a partnership, last quarter they shut down everything except FindMRO.com, which they folded into their core branch-based business. The final gasp was taking a $40-million write-off last quarter and pulling the plug.
Grainger's electronic marketing strategy really began with their roll-out of a CD-ROM catalog about eight years ago. Their digital adventures will provide one heck of a Ph.D. topic for some industrial distribution grad student at some point.
Grainger was at the bleeding edge in this industry from day one when it came to investing in technology. They shaped the landscape and pushed the industry learning curve by the amount of money and attention they threw at this.
Remember the ongoing debate over whether customers would use CD-ROM catalogs? Whether to invest in a technology that might be replaced by the emerging Internet? The rise and fall of CD-ROM vendors and IndustryNet?
They also spent a lot of money placing bets on every potential winner in the high-risk, high-stakes game that defined the recent dot-com frenzy years.
While it's easy to be a genius in hindsight, you have to wonder at the real return on investment gained as of July 1 from the sum total of Grainger's digital decade. Not to discount their current online marketing engine, but was the first-mover competitive advantage gained worth the massive investment? Probably not. Most competitors learned from Grainger's mistakes and then did smaller-scale, targeted e-business pieces that had an identifiable ROI.