Boyden Moore, Orgill’s president and CEO, delivered a virtual keynote presentation during the company’s online buying event that outlined how the wholesaler plans to build on a successful 2020 by capitalizing on industry trends, investing in technology and expanding distribution capacity.
Moore noted that Orgill’s sales grew 21 percent in 2020 to a record $3.04 billion. After reaching $1 billion in sales in 2006, it took Orgill a decade to hit $2 billion but just four more years to exceed the $3 billion mark.
With the pandemic causing such a spike in demand combined with ongoing line stockouts, Moore said the company was forced to make the difficult decision to temporarily suspend orders from retailers who use Orgill as a secondary supplier. Orgill’s approximately 10,000 retail customers include 700+ True Value retailers, 600+ Ace retailers and 250+ Do it Best retailers who use Orgill as a secondary supplier.
“We worked our way out of all those restrictions,” he said. “We’ve had more new business possibilities than we’ve ever had, and while we’re excited about these new opportunities and continued growth, we will stay true to our mission to help our customers be successful.”
Orgill is continuing to work through some supply chain issues and hopes to return soon to its traditional high fill rate of 96 percent, with Moore pointing out that 30 vendors count for half of Orgill’s product shortages.
Since June the company has hired more than 1,000 new employees in its distribution centers to keep up with growing demand. Increasing distribution capacity is a major goal for 2021, with Orgill accelerating the construction timeline of its new distribution center in Rome, N.Y., by a full year. Moore said they expect to start shipping out of that facility by mid-year, bringing faster response and service to their customers in the Northeast. “We’ve hired the management team and are hiring 200 new distribution center employees. We also plan to expand our distribution capacity in the West and will be making an announcement about that soon,” he said.
Safety procedures have been implemented throughout the company to keep employees safe during the pandemic. In total, Orgill has had a little over 500 employees test positive and all have recovered or are currently recovering, according to Moore. “We have less than 50 active cases today,” he said.
Moore noted that they saw record participation in last fall’s e-Volution online buying event and had over 2,400 attendees for their first round of online educational seminars in January, with additional distance learning taking place each month. “We care about your success and want to strengthen our relationships we have with you,” he told the dealers.
The latest retail programs and technology systems are being tested all the time at CNRG (Central Network Retail Group) stores through Tyndale Advisors and Orgill’s Retail Services team and are then scaled to deliver to Orgill customers, according to Moore. “Everything from the FanBuilder loyalty program and assortment strategies to the BrandBase marketing software and integrated e-commerce solutions—it all comes from our success in CNRG,” he said.
Moore outlined some consumer and demographic trends that impacted sales in 2020 and shared the company’s outlook for business in 2021 and beyond. “Our industry benefitted from a huge shift in consumer spending last year. This trend has continued in 2021. As baby boomers age, they show a preference to age in place,” he said.
Moore added, “Housing supply is at record lows. There are strong trends supporting demand for new housing. In 2020, DIY consumers led the increases. We expect pros to lead increases in 2021, with people continuing to travel less often and remote working expected to increase.”
Thirty-five percent of homeowners plan to do many more home improvement projects in 2021, according to Moore, who pointed out that Orgill customers have been able to pick up market share. “We’ve planned for sales to increase 7 percent in 2021 and are expecting another strong year of growth. All of our goals are dependent on returning to our usual standards of service. We’re doing all we can with vendors and expect to see continued improvement in this first quarter. We’re working to ensure we have the capacity in place to double our business in the next five years,” he stated.
Orgill was prepared for the explosive growth in e-commerce last year, as it hosts two e-commerce symposiums a year. “We had 330 attend our last symposium last month and we’re now driving e-commerce activity for 600 independent retailers. We will expand to other technologies and share the lessons we’ve learned,” Moore said.
Under the leadership of Marc Hamer, newly hired as Orgill’s executive vice president and chief digital and information officer, the company has a new vision for technology. “We’ve added to our technology teams working under Marc and are very excited about the ideas that are being developed. We’re preparing the company to ensure we can double business in the near future by using the right technology. We will build the logistical and technological infrastructure needed to support your growth,” Moore said.