HVACR distributor Watsco Inc.’s focus on technology investment – more than $20 million in the last year – not only helps the company differentiate from competitors but also insulates it from threats such as Amazon, according to President A.J. Nahmad in MDM Interview: Watsco Aims for ‘Bigger, Better, Faster’.
The company’s recent tech accomplishments include attributing 600,000 SKUs, adopting business intelligence and data analytics, and developing mobile apps for customers.
“There are a lot of things that we’re doing and investing in that should help not only with opportunistically taking advantage in the marketplace but playing defense against any threat – Amazon or otherwise,” Nahmad said.
The Amazon threat is a common fear for distributors. Nahmad said in April that Watsco is “well-positioned” against any looming disruption from the online giant because “a five-ton condensing unit is not delivered very easily by drone.” Although he joked that his comment might have “woken a sleeping dragon” in Jeff Bezos, Nahmad remains convinced that the company is doing all that it can to build its natural defenses.
“The fact that our customers come to us to get questions answered and rely on us for customer service and marketing and financing and so on – those are nice natural moats,” he said.
Watsco, which had $4.2 billion in annual sales last year and is second on MDM’s 2017 list of the Top 10 HVACR & Plumbing Distributors, credits its success on those technology investments, which have had the full support of the company’s C-suite from the beginning.
“If a program like this doesn’t have support from the top, it will not work,” Nahmad said. “That was never an issue here. The conversation started with ‘Well, let’s be better at technology.’ The second question was, ‘What does that mean?’ We spent a year figuring out what that meant. During that year, it was learning as much as we can, speaking to as many smart people as we can and getting a sense of where do we begin.”
Read more about why technology investment is critical to Watsco’s success in MDM Interview: Watsco Aims for ‘Bigger, Better, Faster’.