Wolseley NA's Acquisition Of Online Retailer Won't Cannibalize Wholesale Business
Supply house times contacted the wholesaler for some additional comment on this acquisition.
Q: Does Wolseley intend to operate the Improvement Direct network of online stores? To whom will it sell these home improvement products?
Jim Feltman, chief marketing officer, senior vice president strategy, Wolseley North America: Improvement Direct and its associated Web sites will continue to conduct business as normal under their existing trade names. Chris Friedland, president of Improvement Direct, will continue to lead the organization with the existing management team. Wolseley has been a primary provider of products and logistics for Improvement Direct for several years.
The talent and technology gained through the acquisition of Improvement Direct will allow Wolseley to enhance and expand our business-to-business (B2B) e-commerce platform for our core customer, the professional contractor.
Q: Does this represent an entry into the retail environment - differing from the Xpress stores and the current Web sites of Ferguson, Wolseley and its various properties?
Feltman: Wolseley will continue to focus on the professional contractor as our primary customer while we explore additional technologies to complement our e-commerce growth strategy. Wolseley views the business-to-consumer (B2C) business as an emerging supply channel already being serviced by other traditional distributors.
Q: Do any of the Ferguson/Wolseley (or their wholesale distributor properties) Web sites currently offer online ordering capability? Do they sell direct to consumers or only to professional tradespeople such as contractors or builders?
Feltman: Wolseley’s North American e-commerce resources are in the process of developing industry-leading e-commerce capabilities. This effort will culminate in a business-to-business (B2B) transactional Web site designed exclusively to fulfill the needs of the professional contractor.
Q: What does this acquisition of an online store network mean for the traditional supply houses/wholesale distribution centers operated by Ferguson/Wolseley and their properties?
Feltman: Improvement Direct and Wolseley have been strategic business partners for the last several years, with Ferguson being a major supplier of products to Improvement Direct. With this acquisition, Wolseley will continue to be a primary provider of products to Improvement Direct, continuing to ship many of the products directly from our distribution centers.
Q: Is there any concern the online store network could cannibalize sales from the wholesale segment?
Feltman: Not at all. With Wolseley’s advanced logistical capabilities and nationwide presence, we feel that we have an opportunity to become the primary provider of home improvement products for e-retailers. This acquisition is about offering a new service to increase our professional customer base while simultaneously leveraging Improvement Direct’s intellectual capital to enhance the experience of our core customers.