W.W. Grainger has increased the number of SKUs in its catalog 33 percent, year-over-year. The massive scale of Grainger's product expansion over the past few years indicates a reorientation of Grainger's traditional model.
Five years ago, Grainger invested in a multiyear branch expansion program in the top 25 major metro markets. The goal was more local sales people and larger, more merchandise-oriented branches. In 2003, the company set an aggressive 7-10 percent annual growth rate target, and this effort was the engine. The company saw an opportunity to take market share from competitors by increasing presence in local markets.
The effort was all about increasing customer service. The recent product expansion effort has come with an increased focus on its online catalog - another way Grainger is working to improve the customer experience.
Grainger has moved to define itself as the best industrial/institutional one-stop shop online and off as it continues to add product targeted at garnering a larger portion of customer spend in a diverse set of industries. As part of the 2009 expansion, for example, it doubled the number of SKUs in its metalworking product lines.
Grainger branches will continue to be a critical part of its marketing and customer service capability, particularly with core traditional customer segments. In fact, Grainger has cited the build-out of this network as a key part of its ability to effectively add products rapidly.
But Grainger will also continue to add capabilities to its online platform. The distributor recognizes the importance of a full suite of offerings and services online - it has 60,000 more SKUs available online than in its catalog. Grainger continues to look at ways it can innovate to capture the online audience; it's found that its online customers buy more products more frequently.
The question independent distributors should ask themselves in light of Grainger's latest expansion and increasing focus online is how they are differentiating in the customer service arena.
How do your customers define customer service right now? If you think the answer hasn't changed in five years, go find the youngest person with purchasing influence you can at your best customers and spend enough time with them to learn how they view their vendor options. It could be scary, but a valuable reality check.