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MSC’s Website Increases Sales & Customer Stickiness

E-commerce sales up 4.2 percent year-over-year for distributor.
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E-commerce sales were a "high point" in the fourth quarter for MSC Industrial Supply Co. (NYSE: MSM), Melville, NY, accounting for 59.1 percent of total sales, according to Erik Gershwind, president and CEO, in a call to discuss the company's earnings. Total fourth-quarter sales were up 2.4 percent year-over-year.

MSC attributes all sales through electronic channels, including EDI and punchout, to e-commerce, but the growth this quarter was driven primarily by the positioning of the mscdirect.com website and the stickiness it is creating with customers, Gershwind said.

The website is more than just a public transaction site, it streamlines the procurement process for customers, he said. "It's pretty sophisticated."

In addition to the website's efficiency, it is also a way for MSC to become further embedded with customers. "A lot of the work flow and the functionality that we have in the site is really resonating with our customers," Gershwind said.

Customers appreciate the time MSC's website saves them, "particularly in a down market, when customers are starving for cash, cost savings, streamlining operations and freeing up people to focus on higher value add stuff," he explained.

In addition to e-commerce growth of 4.2 percent year-over-year, MSC also added 10,000 SKUs in the fourth quarter. This brings the company's total active, sellable SKU count to 1.5 million.

Even during a challenging economic environment, the company sees continued growth in these areas as positive signs for future growth. "We've capitalized on the opportunities that come with soft conditions, including cementing new customers, forging new supplier relationships and bringing great talent onto our teams," Gershwind said.

"Should conditions improve or stabilize, the company is poised for a tremendous growth and leverage story," he explained. 

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