Lead photo: Grainger signage outside of the Orange County Convention Center in Orlando, FL, host to the 2024 Grainger Show. (All photos by Mike Hockett/MDM)

I was happy to attend Grainger’s biennial Grainger Show customer event Feb. 12-13 in Orlando, FL, where more than 10,500 attendees convened to learn about the MRO distribution giant’s product assortment and supply chain solutions capabilities.

That figure encompassed Grainger customers, suppliers and Grainger staff on-hand for the event, which serves as the company’s marquee opportunity to show off its latest and greatest on a number of fronts.

Though I had already been to the event three times before, I was eager to get an updated, insider view into how the distributor operates and leverages its expansive scale.

Whether it was when sitting down with three top Grainger executives, speaking with department heads on the expo floor or taking in “Trade Show Talk” presentations, there was one phrase I heard over and over ahead — “solving problems.”

Grainger’s unified message was clear: the company doesn’t see and market itself as a product house — despite offering millions of products through its commerce channels. Rather, the message at Grainger Show was all about the distributor’s many ways that it solves problems for customers.

In a roundtable discussion with industry media, three key leaders shared what Grainger is doing across different fronts:

• Paige Robbins, President of the Grainger Business Unit
• Barry Greenhouse, Senior Vice President of Merchandising and Supplier Management
• Sam Johnson, Group Vice President of Customer Solutions

In this Premium piece, I’ll highlight how Grainger is leaning into its problem-solver reputation to remain ahead of the pack as a market leader. No company has appeared more often on MDM’s 2023 Top Distributors Lists than Grainger, which took the top spots on our lists for Industrial and MRO products distributors.

Grainger’s 3 Areas of Focus

Service

Robbins was elated to say Grainger’s service levels are back to their pre-pandemic levels. Other top distributors also emphasize customer service as their market differentiator, but Robbins noted that Grainger has metrics that indicate the company’s customer feedback beats its competitors.

That effort will receive plenty of momentum over the next several years as Grainger brings three more large distribution centers online. A 525,000-square-foot facility in Pineville, NC is set to open later this year; a 535,000-sq. ft. facility in Gresham, OR is on track to open in 2025; and on Feb. 1 the company announced plans for a massive 1.2-million-sq. ft. facility near Houston that is expected to open in 2026.

Those additions will push Grainger’s physical footprint far beyond the 30.3-million-sq. ft. of owned and leased facilities Grainger had at the start of 2022, with DCs comprising a larger and larger percentage of that figure. I examined that footprint in this August 2023 Premium piece. More importantly, Robbins said, it will help ensure that Grainger can provide next-day delivery to nearly all of its U.S. customers.

In reporting its 2023 full-year financials on Feb. 2, Grainger posted total annual sales of $16.5 billion — a new company record — that improved 8.2% vs. 2022. An industry-wide demand slowdown was reflected in Grainger’s 4Q sales which slowed to a 5.1% year-over-year gain, but outperformed other top industrial supplies distributors including Motion (+2.1%), Fastenal (+3.7%), Applied Industrial Technologies (+1.6%) and MSC Industrial Supply (-0.4% in Sept. 3-Dec. 3 period), with the company’s 9.5% annual organic sales gain ahead by an even wider margin.

Growth Engines

Grainger has long maintained a stated goal of increasing its annual U.S. MRO market outgrowth by 400-500 basis points. It exceeded that goal in 2023 at 525 bps of above-market growth.

What is powering that performance? Five growth engines:

• Merchandising: Having the right products and making sure Grainger knows what its customers need; making it easier for customers to find products; and having the right product information available to them.
• Marketing: Making the Grainger name ever-present in the markets it serves.
• Seller Coverage: Grainger continues to invest in sales training and resources so that it can provide sales representation to additional customer sites and improve its customer information. “In both marketing and seller coverage, we are very well measured. Everything is tested,” Grainger Chairman and CEO D.G. Macpherson said in the company’s 4Q earnings call. “We don’t make investments lightly. We know exactly what the returns are getting. If they’re a positive return, we will make them even if they might slow down our SG&A leverage during the year, because it is the right thing to do for the overall profitability of the business.”
• Seller Effectiveness: Equipping sales staff with the most relevant customer information possible so that they can quickly offer the right products for whatever the application involved.
• Customer Solutions: How Grainger goes above and beyond to add value for customers, this involves the company’s solutions in procurement, inventory management, facility safety and maintenance, technical knowledge, and more. These solutions are all geared toward saving customers time and removing costs out of their processes.

‘Problem-Solving’ Culture

All of the above is tucked into what Robbins described as The Grainger Edge, which is comprised of what I alluded to at the beginning with the different ways the distributor aims to solve customers’ problems.

That culture is perhaps best illustrated by Grainger’s Customer Solutions team, which is focused on helping customers solve problems and bring value in five key cost drivers of their business: process, inventory, technology, products and suppliers.

Grainger works across several different customer focus areas, including:

• Facility & Personal Safety
• Facility Maintenance & Operations
• Footwear Services
• Inventory Management
• Procurement Process
• Sustainability & Diversity Solutions

The Grainger Show expo floor had large booths dedicated for each of those services and others such as the Branch Network, Grainger Brands and KnowHow, where staff were happy to explain and demonstrate the distributor’s different service capabilities.

“Our customer solutions group is focused on creating unique and differentiated value,” said Johnson, who has been with Grainger since 1988. “We do that by focusing on a set of issues that are common across our customer base. We deploy a series of specialist teams who bring incredible experience and knowledge to the table, and they’re focused on building relationships. While doing that, it’s all about developing a deep understanding of the customer’s business and processes. That puts us in a great position to find the right solutions for solving customers’ problems.”

The four core areas Johnson’s Customer Solutions group focuses on are procurement strategy, inventory management, safety and facilities maintenance.

Besides using Grainger’s consulting expertise the distributor also uses third parties to solve customer problems, especially if it’s a very defined issue.

“Within the Grainger portfolio, we will go up to a certain point with our own solutions, and beyond that, we will bring in experts from the industry to address specific customer problems,” Johnson said.

As a career Grainger veteran, Johnson said the company has always had a customer-oriented culture in his 35 years there, but it has still evolved and strengthened with additional resources to understand customers and their pain points, especially recently.

“We’ve always had that customer-first mentality, and I’d say that’s really been elevated over the last half a dozen years or so,” he added. “It puts us in a great position to have as many team members as we do out there every day, engaging with customers. The amount of feedback and insight that we get is robust and rich. We’re in a great place to take advantage with solutions that solve problems.”

Grainger Show 2024 Fast Facts:

• The 2024 Grainger Show was the company’s 18th such customer event, which is held every other year since 2022, alternating with the Grainger’s all-company sales training event. 2022’s edition was downsized due to lingering COVID-19 impacts, whereas 2024’s was back to pre-pandemic scale.
• The event occupied more than 300,000-square-feet of the cavernous Orange County Convention Center.
• The 10,500+ attendee count included approximately 6,000 customer representatives — about 40% more than in 2022.
• The event’s expo featured nearly 500 supplier booths.