Grainger’s Online Strategy Receives Positive Reviews From Analyst

Bloomberg is reporting an interesting comment from John Baliotti, a New York based analyst from Janney Montgomery Scott LLC.  Baliotti has been studying W.W. Grainger’s strategy over the past year, and has recommended to his clients to buy Grainger stock.

Speaking about Grainger’s online strategy, Baliotti told Bloomberg, “Grainger is so far ahead of the competition and they just keep accelerating. They’re not looking back and waiting for the competitors to catch up.”

Baliotti added that Grainger is spending to build more distribution centers and improve its Internet system in an effort to take market share.

Back in April of 2012, Grainger stock was sliding.  It had its biggest two-day loss in more than three years, and there was concern over’s entrance into distribution.  During a two-month period from April to June 2012, Grainger stock slid 12 percent.

At the time, Grainger said it was not concerned about Amazon’s strategy, and was going to expand its catalog and products to better serve customers.  And it ramped up its online efforts to create a new Internet business model.

As a result, Grainger’s stock has risen 34% in the past 16 months, and Internet sales are now about a third of all of Grainger’s sales.

On October 16th, reported Grainger’s 3rd quarter sales for 2013 were up 5%.  Net earnings were up 36% in the 3rd quarter compared to 2012.

Just two weeks ago, Grainger announced a new system called LiveChat with Photo. As part of the company’s iPhone app, LiveChat with Photo allows users to take a picture of a product, send it to Grainger, and have a real time conversation with a Grainger Customer Service Representative.  That will help Grainger find the product and check availability for a purchase.

“We offer more than one million products, so LiveChat with Photo helps answer customer product questions more efficiently and effectively,” said Geoffery Robertson, Vice President of ecommerce. “We are delighted to have worked with LivePerson to deliver this leading technology to our customers.”





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