In the world of distribution (especially in the HVACR Channel) most private companies do not report results, and many public companies do not release the detailed strategic initiatives that have more depth than what is provided in the 10K.
WATSCO once a year does release more details that time to strategic initiatives and I eagerly await the annual WATSCO investor conference update, as they provide a detailed look at their digital Strategy.
In my opinion, WATSCO – has a strong digital strategy that they continues to invest in, and they have the results to show for that investment.
WATSCO prides themselves on providing the following (this information is directly from their May 2025 release).
Robust E-Commerce Platform
Driving growth with existing customers and new customer acquisition, while reducing attrition
Mobile Apps for HVAC Customers
Enable customer engagement, technical assistance and sale anywhere, anytime, on any device
Feature-rich mobile benefits include:
Digital warranty processing, AHRI system match-ups, consumer literature, selling and financing platforms, and more.
A focus on these digital pillars have helped WATSCO become a digital leader in the HVACR distribution space.
WATSCO Digital highlights
Customer-related technology updates include: Data as of 12/31/24 for FY24-
- $2.6B Annualized e-commerce revenue in 2024, an 8% increase in 2024. (HVACR has a high level of service business which often requires distributor full-service functions that are hard to digitize. Having roughly 1/3 of the WATSCO business being ecommerce revenue is impressive)
- HVAC Pro+ Mobile Apps provide customers with real-time access to critical information to enhance speed and productivity. Features include real-time technical support, product details, inventory availability, warranty look-up and processing, certified system matchups, e-commerce and more. (Again the number of authenticated mobile app users with e-commerce account is 64,000 in 2024 – up from 53,000 in 2023)
- OnCallAir®, Watsco’s digital sales platform, and CreditForComfort®, its companion consumer financing platform, increased penetration among HVAC contractors as digital engagement with homeowners expands. The annualized gross merchandise value (GMV) of products sold by customers through OnCallAir® had a 25% Increase in gross value of products sold through On-Call-Air® to $1.5B in 2024 (increase from $1.3B in 2023).
In the Investor conference release WATSCO shared a couple of other key digital items – (2024 Statistics)
- 11% Higher ecommerce line items per order versus traditional orders (15% higher ecommerce lines per order in 2023 report). IMO – The more lines per order that the customer does in a self-service manner the more it frees up their sales teams time to add more customer value. Less Ordering taking time means more time to serve and sell customers.
- ~60% Less attrition for ecommerce users versus traditional customers (~50% Less attrition in 2024 report). WATSCO was first mover digital leader in the channel and a 60% less attrition makes it clear that the digital connection is a barrier to exit for end customers that is very valuable.
The storyline from the presentation is simple to see. The more digitally engaged Watsco customers are the more their sales grow, and they also don’t lose ecommerce customers at the same rate as they do traditional customers.
I think you can see that the digital investment is resulting in building digital barriers to exit and entry around their end customers.
If you are a HVACR Channel Leader what does this mean to you –
If you are a supplier, you would be wise to partner with distributors that can deliver similar digital solutions (or have a plan to become more digitally enabled). If your channel partners are not as digitally enabled as you need, what can you do in 2025 to help your channel partners close that gap?
If you are a competing distributor how can you continue to evaluate a digital strategy that you can execute. Also you need to understand which manufacturer partners are digitally advanced that can help you.
Your market position and resources require a solution that fits your business. I eagerly await this release every year as I view it is a call to action to do something digitally. My advice is to double down on digital as a strategic initiative for your business.
As always, we would love to get your feedback, so please feel free to comment below or reach out to me directly at jgunderson@channelmkt.com
