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Southeast HVAC News
Watsco attributes its
growth to its line-up of e-commerce sites and mobile apps.
An aggressive online strategy is helping to drive up revenue and
profits at Watsco Inc., a distributor that operates four e-commerce
sites and several mobile apps for selling heating, ventilation and
air-conditioning products.
The Miami-based company distributes HVAC equipment and supplies for
brands including Carrier, Rheem and Tempstar in the United States
and foreign markets. It said sales for the fourth quarter ended Dec.
31 reached a record $914 million, with net income up 9.7% year over
year to $39.87 million. Full-year 2016 sales increased 2.6% to $4.22
billion, as net income rose 4.2% to $235.98 million.
Albert H. Nahmad, chairman and CEO, pointed to the company’s
investments in digital technologies—covering four e-commerce sites,
several mobile apps, a business intelligence system, and an upgraded
supply chain and warehouse management systems—as core to Watsco’s
growth.
“Watsco’s goals with these technology programs are to further
strengthen its leadership position, accelerate sales and profit
growth, increase the speed, convenience and efficiency in serving
customers, and extend Watsco’s reach into new geographies and sales
channels,” Nahmad said in a statement yesterday announcing the
company’s financial results. Nahmad added that he expects these
digital technology applications to continue priming Watsco’s growth
in years to come as “a modern, data-based company.”
In 2016, Watsco notes the following increases in customer activity
on its e-commerce sites and mobile apps:
● A 220% increase in the number of users of its iOS or Android
mobile apps for research products and placing orders
● A 127% increase in the number of e-commerce transactions
● 28% more product lines per order compared with orders placed in
physical stores.
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In addition, last
year Watsco increased the number of SKUs it makes available
online to 500,000, up 71% from about 293,000 in 2015. The
combination of a larger number of online SKUs and customers’
increased use of apps and e-commerce sites has resulted in more
line items per online order, Nahmad said on a conference call
with stock analysts yesterday, according to transcript provided
by Seeking Alpha.
He also noted on the call that Watsco sales reps that use the
company’s business intelligence software—for accessing such
information as customers’ purchasing behavior and the
availability of new products their customers are likely to
buy—are seven times more productive at closing deals than reps
who don’t yet use the software.
Watsco sells online through separate websites it operates for
four business units: Baker Distributing, at BakerDist.com; East
Coast Metal Distributors, at ECMDI.com; Gemaire Group, at
Gemaire.com; and Carrier Enterprise Northeast, at
CarrierEnterprise.com. Watsco also sells through several mobile
apps, including ones designed for Gemaire and for Carrier
Enterprise.
Watsco also operates ACDoctor, an online information service for
commercial building owners and homeowners. HVAC contractors can
register on ACDoctor.com to get leads from prospective
customers.
For the fourth quarter ended Dec. 31, Watsco reported:
● Total revenue of $913.61 million, up 1% from $903.82 million a
year earlier;
● Gross profit of $228.07 million, up 2.7% from $222.04 million;
● Net income of $39.87 million, up 9.7% from $36.34 million.
For the full year, Watsco reported:
● Total revenue of $4.221 billion, up 2.6% from $4.113 billion
in 2015;
● Gross profit of $1.0346 billion, up 2.7% from $1.0074 billion;
● Net income of $235.98 million, up 4.2% from $226.52 million.
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