Need Help? (888) 742-5060

In The News:

Wolseley's E-Commerce Looks to Compete With Grainger, Amazon

Wolseley's E-Commerce Looks to Compete With Grainger, Amazon

March 28, 2014

For UK-based Wolseley plc, growth in the e-commerce channel isn't enough; they want to be one of the strongest players in the e-commerce business.

"We've invested a lot getting a very good transactional site up and running," CEO Ian Meakins said in a call to discuss the distributor's mid-year earnings. "We benchmark it not just against our other competitors in our space, but versus Amazon, those sorts of people – Grainger – we want to have the best transactional site."

Grainger is commonly recognized as having one of the strongest e-commerce platforms in the distribution industry. E-commerce now accounts for a third of Grainger's total $9.4 billion in annual sales. (Read more about Grainger's e-commerce plans in Behind Grainger’s E-Commerce Strategy.)

"Over 9 percent of our (U.S. B2B) business is now conducted via e-commerce and it is rapidly gaining share of our business, with more than 70 percent growth," Meakins says. "We have 30 people dedicated to converting customers to our e-commerce site." About 20 percent of Wolseley's customers are currently signed up on its website with their own terms and conditions.

In the recent 2014 State of E-Commerce in Distribution survey, MDM found that 77 percent of respondents reported e-commerce comprising less than 10 percent of their company's total sales in 2013. The report also found that 48 percent of respondents did not have any dedicated e-commerce personnel. Of those that had dedicated personnel, only 5 percent had a dedicated e-commerce division.

Both Wolseley's business-to-business and business-to-consumer e-commerce programs have experienced significant growth this past year, especially in the U.S.

"In total, (e-commerce) would be about 15 percent (of total U.S. sales), when you add B2B and B2C together," Meakins says. "B2B e-commerce, after a slow build over many years, has begun to accelerate rapidly in the U.S."

Meakins credits the investments they've made in e-commerce as being crucial factors in the channel's growth.

"The critical steps are having an excellent transactional site, and then investing resources to get customers confident in using that site. Once they have seen the benefits, they increase usage rapidly, particularly as they increasingly use tablets and mobile devices," Meakins says.

Despite success in the U.S., adoption of e-commerce channels in the U.K. has been much slower. Once it gets its U.K. customers set-up and accustomed to the e-commerce system, "they will adopt, just like the U.S.," Meakins says.

After the company dedicated people to oversee and develop the e-commerce channel in the U.S., the pace of adoption picked up. "The same will happen in the U.K. We're now putting dedicated people against it. We've got to help our customers; transport them from not using the site into using the site. It's just going to have to be a patient game," Meakins says.

Wolseley will continue its significant investment in developing the e-commerce channel to capitalize on the strong benefits the channel provides and to improve the distributor's ability to compete in a changing market.

"The benefits for us are higher average order size, margins are better because of consistent pricing without the ability to negotiate, and in addition, it's lower cost-to-serve for us," Meakins says. "We continue to drive this channel hard and will invest further to improve and re-platform our business over the next 12 months, so that we will increase our advantage over smaller distributors, and can compete with the larger e-commerce players, who are beginning to come into our space, like Amazon and Home Depot."

Find Scott on Google+

© 2019 Gale Media, Inc.

Please do not reprint MDM's content on your website without MDM's express permission as it is copyrighted material. To gain permission, email us, or call 1-888-742-5060. For information on PDF or print reprints, visit MDM welcomes inbound links from your site. Please cite Modern Distribution Management.

2018-top-distributors-listThe 2018 Top Distributors List

This free PDF includes lists of top distribution companies across 14 sectors.

You will also receive MDM Update, our daily distribution e-newsletter & other distribution-focused content.

Download the Free PDF now >>

MDM-UpdateMDM Update: Daily Newsletter 

Sign up to read the best source for news & trends in wholesale distribution, MDM Update. Delivered daily to your inbox. 

Sign-up for MDM Update >>

Post a comment to this article

Partner Center