A major HVAC distributor pumps $46 million into expanding digital sales – Digital Commerce 360



Watsco Inc., a major distributor of heating, ventilation, and air conditioning (HVAC) equipment, continues to ratchet up the heat on ecommerce and digital transformation.

In its recently released first-quarter earnings for the period ending March 31, Watsco said it has spent more than $46 million over the last year on a range of digital technology upgrades, including for ecommerce and mobile commerce. “Watsco continues to invest in transformative technologies to better serve customers and gain market share — the community of active users of our platforms grew sales 30% faster than Watsco’s overall sales growth rate over the 12 months,” the company says. “Watsco has boosted its annual technology spending by $10 million to $46 million.”

For the first quarter, Watsco grew total sales by 34% to $1.523 billion from $1.136 billion in the first quarter of 2021. Net income was $134.8 million compared with $66.1 million for Q1 2021.

Watsco gives out certain details on its ecommerce sales but not a complete year-over-year comparison. Still, Watsco’s annual ecommerce now tops $2 billion, “as the number of active ecommerce customers grew 19% over the prior year,” the company says.

Ecommerce sales grew 34% during the quarter, Watsco says. “Watsco’s technology continues to gain adoption,” CEO Albert Nahmad told analysts on a recent first quarter earnings cal. “That leads to new customer acquisition and, we believe, development of greater market share.”


Recent digital growth metrics include:

  • Product Information Management. Watsco says it has now digitized product information for approximately 980,000 SKUs, which are currently being accessed by more than 350,000 contractors and technicians.
  • Mobile app. The number of users grew 23% over the prior year, and the total user community now consists of more than 67,000 unique users.
  • Digital platform. During the first quarter, customers using the company’s OnCall Air digital sales and finance platform presented quotes to approximately 45,000 households, a 40% increase over the comparable prior year period, and generated approximately $165 million in gross merchandise value of sales from contractor to homeowner, a 59% increase over last year,” Watsco says.

“Customer attrition among active technology users is meaningfully lower compared to non-users, and our platforms used by contractors to make sales to homeowners gain more users,” Nahmad told analysts. “That, in turn, double the number of at-home sales presentations and increased sales volumes that flow through our platforms called OnCall Air and CreditForComfort. We are happy with our progress, but we believe it is still early in terms of reaching the full potential of our technology investments.”

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, vice president of B2B and Market Research Development, at [email protected] and follow him on Twitter @markbrohan.



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