Watsco’s Growth over the past 20+ years has been driven by a core buy and build philosophy and an investment in digital customer self service tools and services.
I eagerly anticipated writing the Case Study series on Watsco for Modern Distribution Management, as I consider its strategic approach unique in the North American B2B distribution.
Watsco operates as 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.
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 Ferguson that are comprehensive. A big thanks to that great team for the partnership and great editing on these distributor deep dives.
Inside Watsco’s Market Leading Buy and Build Strategy – Modern Distribution Management Part 1
Scaling Success: Watsco’s Digital Commerce Evolution – Modern Distribution Management Part 2
How Watsco Drives Growth with a Tech-First Mindset – Modern Distribution Management Part 3
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.
Watsco Technology Transformation (Pillars for Growth)
- Watsco’s PIM database — The company shares the number of SKUs accessed by the number of contractors and technicians that access those SKUs annually.
- HVAC Pro Plus Mobile Apps (formerly called Contractor Assist Mobile) — Watsco’s authenticated user community is comprised of mobile app users linked to an eCommerce account. The company shares the number of users and growth rates.
- eCommerce Sales — Watsco shares growth rates that outpace that of organic sales.
- OnCallAir — Watsco’s digital sales platform and CreditForComfort, its consumer financing platform. The company shares details on those programs and their growth.
Watsco HVAC Pro Plus and OnCallAir are digital programs that meet key customer needs. It is clear that Watsco leadership is responding to their customers who desire more “Self Service” digital solutions.
“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?
As always, we appreciate your comments and feedback.
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