The world’s largest retailer will end free shipping for online orders under $50 Canadian starting April 2.
The retailer of products that companies use for maintenance, repair and operations—ranging from mops and screw drivers to electric power generators—says e-commerce is its fastest-growing and most profitable sales channel. “We will continue to invest in e-commerce,” says CEO Jim Ryan, who is a former head of Grainger’s e-commerce operations.
E-commerce has been an important part of W.W. Grainger Inc.’s business for years, and it’s only getting stronger, CEO Jim Ryan said today. The provider of products used by companies for their internal maintenance, repair and operations said e-commerce sales surpassed $3 billion for the first time last year, to $3.11 billion, an increase of 15% from $2.7 billion in 2012. Total sales rose 5% to $9.44 billion from $8.95 billion.
Grainger said e-commerce is the company’s fastest-growing channel, accounting for 33% of total sales in 2013, up from 30% in 2012.
Profits last year also rose, again with a boost from e-commerce margins, Grainger said. It said net earnings rose 16% to $797 million from $690 million, adding that e-commerce is the company’s “most profitable” sales channel.
Ryan said the growth in sales and profits came despite a “sluggish economic environment” last year and aggressive investment by the company in such areas as e-commerce technology; the addition of more than 300,000 new products available to its U.S. online customers, resulting in more than 1.2 million products now on Grainger.com; a new million-square-foot distribution center in Illinois; and an expansion of its sales staff.
Among the company’s investments in e-commerce last year were a new e-commerce site and mobile app. The company didn’t immediately respond to a request for more information on its ongoing plans to invest more in e-commerce.
In Canada, it added 200,000 products to its e-commerce site at AcklandsGrainger.com, and began construction of a 500,000-square-foot distribution center near Toronto.
In Japan, Grainger said sales at its e-commerce business Monataro.com grew by nearly 20%. It didn’t break out sales figures for Monataro.
Percentage year-over-year growth in overall sales by customer segment varied widely in 2013, the company said. Sales to customers in heavy manufacturing and retail rose in high single-digits, while sales to those in light manufacturing rose in low double-digits. Sales to government were flat overall, as sales to state and local government rose while sales to federal agencies fell, Grainger said.
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