Watsco Embraces Omnichannel

HVAC distributor seeing increase in e-commerce, mobile app traffic.
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A commitment to technology – including an omnichannel sales approach centered on e-commerce and a mobile app – has HVAC distributor Watsco Inc., Miami, FL, well-positioned for the migration of B2B buyers to online.

Despite a slight dip in second-quarter sales and profit, the company has fully embraced a "data-driven culture," as CEO Albert Nahmad outlined last year. Watsco in the past few quarters tripled its number of technology employees, increased its annual run rate for technology-related costs and launched a mobile app.

"Our employees are leveraging data analytics to gain greater information into operations using our business intelligent platform," Nahmad said on an earnings call with analysts last week. "More of our 563 locations are implementing technology that fulfills orders more efficiently and saves our customers time.

"With this digital capability, an increasing number of customers are adopting our app and using e-commerce to gain information, speed and efficiency."

The company – No. 2 on MDM's 2016 list of the Top 10 HVACR/Plumbing Distributors – made another strategic technology move earlier this year when it appointed Nahmad's son, Aaron "A.J." Nahmad, as president. The younger Nahmad (34 when appointed in January) previously served as vice president of strategy and innovation and is charged with "leading the transformation of Watsco into the digital age."

A.J. Nahmad, who has taken over many of the day-to-day tactical responsibilities from his father, is helping the company meet some lofty goals, including further development of mobile apps and other online tools, business intelligence and data analytics, supply chain optimization and other tools to improve operational efficiency for the company's 7 million-plus annual customer transactions.

"Although we are still in the early stages of our introduction and launch of these technologies, we are encouraged by the adoption of e-commerce by an increasing number of customers, the growth of unique users of our mobile apps, the expansion of our data-driven culture and the inventory reductions that are being achieved," said A.J. Nahmad. "We have much more to learn and to accomplish, but we are pleased with our progress thus far."

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