Fastenal doubles its digital footprint as online sales increase
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- Fastenal says nearly half of its third-quarter sales were driven by its digital products and services as the company uses inventory management and online fulfillment to bolster its capabilities, the president and chief executive officer said. direction Dan Florness during a Call for results October 13.
- E-commerce, inventory management services and other technology solutions as part of the parts distributor’s “digital footprint” accounted for 49.5% of all sales last quarter, up 43.7% year-on-year.
- The company hopes to reach 52% of its total sales from its digital footprint by the end of the year, Florness told investors.
Overview of the dive:
Much of Fastenal’s operational focus over the past few months has been to create a more proactive purchasing and inventory system for itself and its customers, vice president of e-commerce Kirk Talmontas said in a September blog post.
Rather than ordering on an “ad hoc” basis and risking repeat purchases, Talmontas noted that the company is now using digital tools to more proactively monitor and restock product levels in a simpler process.
“The result is a steady, steady flow instead of an endless rush for 24- or 48-hour treatment,” Talmontas said.
The company’s digital footprint includes its FASTStock program, which works with manufacturers to create custom inventory management solutions.
“We believe the data created through our digital capabilities improves product visibility, traceability and control, which reduces risk in operations and creates efficient ordering and ordering for ourselves and our customers,” said said the company. said in its report on the results. “As a result, we believe our opportunity to grow our business will be enhanced through the continued development and expansion of our digital capabilities.”
More efficient execution helped increase the share of Fastenal’s sales from e-commerce. Daily sales via e-commerce increased 50.2% in the third quarter, accounting for 18.0% of revenue for the period.
A focus on digital services and e-commerce has helped Fastenal weather economic uncertainties, and the company is focusing more on visibility technology to help its customers.
“[The Digital Footprint is] really to widen the gap, to illuminate the supply chain for our customers and to make the supply chain more efficient for us and our customers,” Florness said on the earnings call.
Attached competitor ParkOhio, which specializes in industrial manufacturing supply and logistics, is also investing in storage capacity. The company acquired Southern Fasteners earlier this year, with vice president and chief financial officer Patrick Fogarty highlighted in Q2 earnings call the company’s expertise in designing customized inventory management programs for clients.