Watsco Inc. is accelerating its digital transformation by expanding its ecommerce capabilities and investing in technology to drive growth.
During the company’s year-end earnings call, Watsco president A.J. Nahmad emphasized the importance of ecommerce in shaping the company’s future.
“You have this digital platform that’s kind of smoothing the transition into how customers actually buy the product, specify the products, match the products, add correlated products to those products, and you get the drift,” Nahmad told analysts. “We also made the transition that influence 50% to 60% of our sales. We are making investments to train our customers, leverage our technology advantage, and transition close to $1 billion in inventories to aggressively take advantage of this opportunity.”
Ecommerce has become a key driver of Watsco’s growth, with its digital sales reaching $2.6 billion in 2024, accounting for 35% of total revenue. In the fourth quarter, Watsco ecommerce sales grew 16%, surpassing the company’s overall revenue growth.
Watsco ecommerce drives sales growth
“Our technology platforms have gained momentum,” Nahmad said. “Our community of active users of Watsco mobile apps has expanded to over 64,000 users. Ecommerce sales during the quarter increased 16%, outpacing overall growth rates and now represents 35% of our annual sales, which is a number of $2.6 billion in aggregate.”
OnCall Air, Watsco’s digital sales platform for contractors, has also seen strong adoption. The platform presented approximately 313,000 proposals to homeowners in 2024, generating $1.5 million in gross merchandise value. That reflects a 25% increase from the previous year.
“There is no question that our technology investments have contributed to our performance and provide us an immense competitive advantage,” Nahmad said. “And the importance of these investments will only grow with time.”
To support its digital evolution, Watsco has upgraded its product information database, making it easier for customers to find and purchase products while also streamlining the permitting process. The company estimates that digital transactions now make up 45% to 50% of their residential business. Additionally, Watsco is enhancing its supply chain operations by transitioning $1 billion into inventories to improve distribution efficiency.
With ecommerce sales influencing over half of its total revenue, Watsco is establishing itself as a leader in digital HVAC distribution.
Watsco is a distributor of air conditioning, heating and refrigeration equipment, and related parts and supplies in the U.S. Watsco was founded more than 60 years ago as a manufacturer of parts, components, and tools used in the HVAC/R industry.
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