MSC Industrial Supply Co., long a leader in B2B digital commerce operations, attributed disappointing preliminary financial results for its fiscal third quarter ended June 1 largely to delays in planned website enhancements.

Citing preliminary Q3 financial results, MSC said net sales fell as much as 7.3% year over year to about $980 million. The company will webcast its Q3 results on July 2.

Erik Gershwind, president and CEO, MSC Industrial Supply Co.

The delayed website enhancements, which were designed to foster online commerce with MSC’s core manufacturing customer base, resulted in setbacks in marketing efforts as well as online features for helping those customers find the right products at the right price, CEO Erik Gershwind said on a preliminary Q3 earnings call.

“We had several programs, all lined up towards the core customer,” he said, according to a transcript from Seeking Alpha. But he added: “Not having the website ready for prime time really had a ripple effect” in delaying other related programs … “Without launching the marketing and web price realignment, it’s hard to get as much traction as we want” with customers.

Gershwind added that MSC had mostly completed work on its ecommerce platform, or transactional engine, but pointed to a bigger problem in the delayed search upgrade. “What we’re counting on for revenue growth is the search and product discovery function, and it’s running late,” he said.

Gershwind also noted that MSC  was experiencing a delay in a planned web price realignment effort to improve gross profit margins. “This was a highly complex project hinging on highly complex pricing and discounting systems,” he said on the preliminary earnings call. “Our testing during the pilot phase did not sufficiently surface all of the pricing anomalies that we saw during the rollout.”

Eyeing website progress later this year

Nonetheless, MSC expects to begin realizing more website improvements in its current fiscal fourth quarter and complete the projects in the “early stages” of fiscal 2025, which begins this September.

Gershwind also referred on the earnings call to the recent resignation of John Hill as MSC’s chief digital officer, asserting that Hill’s departure “really does not have an impact” on the timeline of website project completions. Gershwind did not further comment on the resignation of Hill, who was named MSC’s first chief digital officer in April 2022.

Gershwind added that MSC will rely on a combination of internal and outside third-party technology experts to complete its website projects. He added that Brian Bello, a veteran MSC IT leader, “is assuming the Interim Lead” of the digital operations and that Alan Yang continues as MSC’s chief technology officer.

“We are taking action to accelerate progress on the website rollout and hence unlock the path to core customer growth,” Gershwind said.

The CEO added, “This is an area that’s near and dear to my heart. I go back a long way with the early days of our website … I have no doubt we can — and we will — fix this.”

MSC’s parent company is MSC Industrial Direct Co. Inc., but MSC generally goes by the name of its primary unit, MSC Industrial Supply Co.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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