Newark

Newark

Feb. 15, 2022
Q&A with Uma Pingali, Business President, Newark

1. What has been the impact of the supply chain shortages and other pandemic-related issues on Newark’s revenue growth in 2021?

Newark’s performance has been strong throughout the pandemic and in the most recent financial quarter delivered record global sales numbers. Global sales in Q1 FY22 grew 34% year over year, which the Newark business strongly contributed to, and we anticipate healthy growth continuing into 2022.

The pandemic and supply chain shortages have undoubtedly had an impact on our global business though, placing increased pressure on our customers and, in turn, our people. During this period, we have realized the benefits of the strategic investment decisions we made pre-pandemic in bolstering our inventory position, ensuring that when market demand returned in late-2020 and early-2021 we were very well stocked to manage the market dynamics. Even now as demand continues to outstrip supply we are well positioned and plan to add a further 250,000 SKUs through FY22.

2. Is Newark considering retaining any business practices that were implemented in 2020 and 2021? If so, please name them.

At the start of the pandemic, we worked quickly to ensure that our global teams had the technology and infrastructure to work from home. Although some of our people have since returned to the office in a limited “hybrid” model, many are continuing to carry out their jobs from home. This flexible approach to how and where our people conduct their day-to-day roles is something we are carrying forward into 2022, enabling employees to continue to have the greater flexibility and improved work-life balance that many have enjoyed in the past 18 or so months.

Another change to business practices which is certainly here to stay is the accelerated move towards digital channels. The trend towards eCommerce and digital transactions has been increasing steadily over time but has been vastly accelerated by the pandemic – in large part due to the mass move to working from home and the restrictions on in-person business interactions. We have turned our attention to the digital offering and ensuring it is as good as customers will find anywhere else in the market.

3. What is Newark’s capital investment priority in 2022? (e.g., inventory expansion, digital marketplace, new product categories, new end markets, etc.)

We remain fully committed to improving and expanding our product portfolio, which is currently approaching one million SKUs, and will be investing in new products from leading suppliers, expanding existing lines and signing new franchise agreements as we move through 2022.

Newark also sees its digital enhancements program as a key strategic priority for the next year and beyond. To date, we’ve already invested in millions of dollars’ worth of improvements to the online channels and customer web experience, including site speed, self-service options and more. These changes are already paying dividends as we’ve seen a 30% increase in global traffic and 15% uplift in online orders. Digital platforms are fundamental to the future of distribution and the plan to transform Newark’s digital offering is central to our investment priorities going forward.

4. What plans does Newark have for enhancing the digital marketplace in 2022, and why?

I’ve mentioned already that the trend towards digital has been greatly accelerated by the Covid-19 pandemic and how our digital transformation journey is a key focus going into 2022. Two projects in particular worth mentioning are the brand-new content management system and our investment in major headless commerce developments. These, in turn, will create a world-class experience for our users, personalizing and curating both content and product based upon the user’s own unique experience of our sites. Our global digital platforms will become more flexible and efficient with better integration, all of which is being designed with our customers in mind.

The vast majority of our customers begin their research journey online and over 70% of our global orders are then placed through digital channels. There is no doubt of the ongoing importance of the digital marketplace.

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