MSC Industrial Supply Co. is leaning heavily into artificial intelligence as it looks to modernize its operations, sharpen customer engagement, and improve productivity across a softening industrial landscape. From AI-powered marketing automation and ecommerce personalization to predictive inventory planning and enhanced customer service, the $4.2 billion distributor is embedding artificial intelligence into every corner of its business.
“Our customer care center is harnessing advanced technology to better execute on opportunities to both upsell and cross-sell,” said president and chief operating officer Martina McIsaac during the company’s recent fiscal Q2 2025 earnings call. “We’re increasing our use of marketing automation and AI to support our sellers.”
The technological push comes as MSC’s financial performance continues to reflect broader weakness in industrial demand. Net sales for the quarter fell 4.7% year over year to $891.7 million. Still, executives emphasized that recent AI and digital investments are positioning the company to rebound as markets stabilize.
One of the most visible deployments of AI is on MSC’s ecommerce platform, MSCDirect.com. Recent upgrades included a rebuild search algorithm designed by technical experts to better understand product attributes, customer behavior, and industry terminology. The company also launched new comparison tools and a single-page checkout process that reduced clicks by about 50%.
“We want the site experience to reflect the technical expertise that MSC delivers to our customers every day,” said CEO Erik Gershwind. “Achieving this requires a search platform built by people who understand the products and our customers’ buying journey.”
Gershwind said that while it’s still early, key performance indicators are trending positively. “We’re seeing increases in new customer acquisition, in mscdirect.com traffic, average daily website revenues, and improvements in several website KPIs,” he noted.
AI is also driving content strategy. A newly launched page featuring cost-savings case studies—backed by AI-driven content recommendations—saw traffic surge 60-fold over the previous three-month period, according to McIsaac.
Behind the scenes, MSC is using artificial intelligence to optimize inventory planning, reduce freight costs, and enhance demand forecasting. The company’s network optimization initiative is expected to deliver $10 million to $15 million in annualized savings by fiscal 2026, in part by using AI to place inventory closer to customers and minimize split or expedited shipments.
“We are acting on opportunities to optimize our management of inbound and outbound freight through more sophisticated demand planning,” McIsaac said.
MSC is also leveraging AI in collaboration with Verint, integrating customer experience automation tools into its operations. The platform is designed to expand self-service capabilities, surface customer insights in real time, and increase the capacity of customer support agents through specialized bots and analytics.
While AI is a central focus, MSC is also deploying digital tools to manage risk and mitigate cost pressures tied to rising tariffs. The company sources about 10% of its cost of goods sold from China but said only a portion involves direct importation. The rest comes through branded suppliers, many of whom are still calculating the impact of overlapping duties.
“The increase that we took in late March was small, and it was mainly covering items where we are the importer of record,” said chief financial officer Kristen Actis-Grande, who estimated the price effect at about 0.5 percentage points. “We don’t have a lot of firm information from our suppliers yet on cost or timing, which is obviously a key variable in our modeling.”
To help customers manage tariff exposure, MSC is promoting its inventory of over 200,000 Made in USA products, including 40,000 exclusive private-label items. McIsaac said those products, along with MSC’s AI-enabled productivity tools, give customers an edge in a volatile pricing environment.
While MSC expects Q3 sales to remain flat to down 2% year over year, Gershwind said the company’s AI and digital transformation efforts are already improving execution and setting the stage for long-term growth.
“We’re focused on delivering what we say we’re going to deliver,” he said. “We’ve got a solid foundation in place, and the leading indicators are encouraging. As demand conditions normalize, we believe these investments will allow us to outperform.”
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