We wrapped up the distributor series I have been writing for Modern Distribution Management on Ferguson and WATSCO with a podcast this week.
Podcasts Archive – Modern Distribution Management
S12E1: Debriefing Our Ferguson & Watsco Case Studies (Link Above). During this podcast it Mike Hockett and I dove into the three part series I wrote for MDM on each distributor in depth.
So, it was fun to write this three-part series with Modern Distribution Management for MDM premium readers. I would encourage you to consider getting an MDM Premium subscription for your company to see the full series on MDM.
P.S. MDM has other series I have written this year on Wesco, Fastenal and now MSC Industrial that are comprehensive. A big thanks to that great team for the partnership and great editing on these distributor deep dives.
In the podcast, we discussed Ferguson’s three big strategic initiatives. Ferguson has a laser focus on Dual Trade Contractors (Plumbing and HVACR) and has expanded their customer segments with strategic moves and acquisitions. This strategic move from just plumbing into HVACR, PVF Waterworks, Residential Lighting, and more was fun to write about. I call this channel drifting where now they compete with different distributors in each customer segment they are pursuing.
We also took a deep dive into Ferguson’s extensive private brand programs and their leading digital efforts (on both ferguson.com and build.com). We completed that digital look with an examination of Ferguson Pro Plus Customer Rewards program.
- Part 1:How Ferguson Worked Wonders with “Channel Drifting” Expansion
- Part 2: Inside Ferguson’s Private Brand Strategy
- Part 3: A Deep Dive into Ferguson’s Digital Strategy
Watsco is a traditional distributor in many markets with multiple brand names, and it has a series of joint ventures with Carrier Corporation — a manufacturer of HVAC Carrier and Bryant products. In these cases, I refer to Watsco as a “Disty-Manu.”
As the term infers, the line between distributor and manufacturer (or “Disty-Manu”) is blurred, or — if you prefer — exclusive enough to have the manufacturer and distributor integrated at uncommon levels in the distribution supply channel.
- Inside Watsco’s Market Leading Buy and Build Strategy – Modern Distribution Management
- Scaling Success: Watsco’s Digital Commerce Evolution – Modern Distribution Management
- How Watsco Drives Growth with a Tech-First Mindset – Modern Distribution Management
In the series we took a deep dive into Watsco’s strategic initiatives that have driven continued growth for the company over the past 20 years plus. I believe digitally Watsco is one of North America’s leaders and other distributors and manufacturers in the channel can learn much from their approach that might fit their business.
Watsco every quarter reports some unique digital metrics that I wanted to highlight below.
Watsco first started mentioning “digital” as a differentiator in 2015. Since then, it has publicly released more and more data and details to the market on its efforts and success. They have been highlighting Four key metrics every release prominently for many quarters.
“We have revolutionized the work life of thousands of contractors and technicians. One notable example is that roughly a third of our sales, $2.4 billion, was transacted through our eCommerce channel in 2023 — a sales channel that did not exist 10 years ago. We believe we are still in the early stages of what should become much broader adoption across our business.” — 2023 Watsco Annual Report
I found a quote from a Watsco business unit (Gemarie) that jumped out to me that speaks to their digital commitment.
“We are a technology company that happens to distribute air conditioning products” Gemaire YouTube Channel November 2024
I found that comment intriguing and thought provoking. A technology company that happens to distribute air conditioning products.
As a distributor or manufacturer in the channel does that statement apply to your world view. Are you a technology company that happens to manufacture or distribute HVACR products? Are you considering focusing more on the Dual Trade Contractor like Ferguson?
As always, we appreciate your comments and feedback.
