Dee Merriwether: What we’ve said and what D.G. set out reiterate that is we’ve had some onetime benefits if you look at this year. Earlier in the year, we had a freight accrual-related benefit. We had a supplier rebate benefit that we won’t see going forward. And then this product mix, which is related to supplier related services — not supplier, services-related project benefit. When you pull all that together, that’s like a 40 basis point headwind year-over-year that we would expect. But outside of those things, we feel like we will be able to maintain relatively stable gross margins.
Nigel Coe : Okay. That’s helpful. And then just a quick one on the Zoro gross margins because as you burn off B2C focus on B2B, I thought B2B gross margins would have been higher than B2C. So therefore, you actually get a gross margin mix up. So just wanted to understand that dynamic.
D.G. Macpherson: In Zoro, that’s not the way it works. It’s basically one price and spot discounts in some cases. But we don’t have differentiated pricing for business to consumers.
Operator: Our next question comes from Steve Volkmann with Jefferies.
Stephen Volkmann : I wanted to go back to something you said, D.G. I think you said you didn’t expect any cost increases or pressures in ’24. I’m not sure exactly how you put that. But are we thinking that cost and price are sort of flat in ’24?
D.G. Macpherson: Well, we haven’t really talked about that yet. But we do know that we’re not seeing as much product cost pressure as we’ve seen in the last two years. And there are certain categories where costs will be down that are commodity related and certainly will be up. But generally, we’re not seeing a lot of cost pressure. We’ll talk about price cost and the actual numbers at the end of the year for next year.
Stephen Volkmann : Okay. Fair enough. And in your long-term algo you talked about leveraging on SG&A, but we didn’t actually do that this quarter. I guess we’re making some investments. Do those continue for a number of quarters? Or how do we think about the sort of trajectory there?
D.G. Macpherson: Yes. I mean we’re going to continue to invest in the business, but we do believe that we will have consistent over — in any quarter, you may not see it, but over time, we will have SG&A leverage as we continue to find ways to improve our cost position for us to investing into this.
Operator: Our next question comes from Chris Dankert with Loop Capital Markets.
Chris Dankert : I hate to keep harping on Zoro here, but I’m curious, again, you talked about a couple of different initiatives. But I mean, is there a friction in that system that we need to pull out? Or kind of what can you really get that customer acquisition up? Given SKU count has been moving up and doing well, what else kind of has to happen to the system perhaps on a more holistic basis?
D.G. Macpherson: Yes, I would reiterate that I think on the customer acquisition piece, which the product breadth really does help, we’ve actually done quite well. And it’s after that, where we’re trying to get customers to become repeat customers where we’ve done well in some cases, but we need to improve that part of the model. And again, not to oversimplify that you use the product breadth to get new customers in, and then you have to become intimate with these customers in some way to get them to repeat buy, and that’s really what we’re focused on doing.
Chris Dankert : Got it. And just as far as like benchmarking, given the greater cyclicality in that business, how should we be thinking about growth there beyond just this year and some of the challenges we’ve seen?
