Fastenal Co. is on a mission to grow digital commerce. But for Fastenal, the online road takes many forms and not nearly as linear a path as building and maintaining a single ecommerce site.
Fastenal is building out its digital channels through many facets including including internet vending machines, ecommerce and electronic data interchange. It is almost to the day when electronic sales account for nearly half of all revenue.
A big priority for the company moving into 2023 is building out what it calls its digital footprint.
Fastenal ecommerce grows
“Ecommerce, the next piece of our, what we call, digital footprint, daily sales rose 48% in the fourth quarter,” president and CEO Dan Florness said. “Again, incredible traction in that area. We’ve really seen that traction move in the last three years, partly a function of COVID. And I think a lot of people are seeing those kinds of patterns, but also we’ve gotten better as an organization and our ability to execute on ecommerce, and that’s times through the numbers as well.
Fastenal reported an increase in sales to $6.980 billion. That’s up 16% from $6.010 billion in 2021. Meanwhile, net sales were $1.07 billion, compared with $925.1 million in 2021. Based on $1 billion in ecommerce sales, Digital Commerce 360 projects that ecommerce accounted for about 14% of all sales.
“EDI and punched out catalogs and really large customer-oriented ecommerce was up 45%, and our web sales was up almost 60%,” he told analysts. “Our goal is 65% of net sales going through our digital footprint next year. In the interest of full disclosure, that’s an aggressive goal, but it’s our goal nonetheless.”
Fastenal includes in its digital footprint ecommerce sales along with customer transactions processed through its FMI inventory management programs, including FASTtock, FASTbin and its FASTVend internet-connected vending machines. The company’s digital footprint in the fourth quarter of 2022 represented 52.6% of sales. That’s an increase from 46.4% of sales in the fourth quarter of 2021.
Fastenal is growing out its digital footprint in large measure because of customer demand, says Edwards Jones research analyst Jeff Windau.
“Fastenal is having success implementing onsite locations and product vending machines,” he says in a research brief. “The pace of customer implementation has been improving since the pandemic lows.”
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