Hy-Vee will benefit from the nearly 600,000 shoppers in Instacart’s network that can pick up, pack and deliver orders, Instacart said.

The retailer is also able to accept EBT SNAP online payments through Instacart.

Instacart and Hy-Vee first worked together in 2018. At the time, Hy-Vee introduced same-day delivery through the Instacart app, with delivery in as little as an hour.

Hy-Vee ranks No. 199 in the Top 1000. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Instacart fulfillment as a service

Hy-Vee was able to integrate Instacart’s FaaS into its existing ecommerce operation using an API, the retailer said. Ecommerce operations platform company UpShop facilitated the integration between Hy-Vee and Instacart, the fulfillment operator said.

“We’re proud to strengthen our partnership with Hy-Vee and equip them with the technology and tools they need to meet customers’ needs,” Ryan Hamburger, vice president of retail partnerships at Instacart said in a press release. “Our goal is to empower our partners and offer seamless and personalized shopping experiences. We’ve spent more than a decade focusing on the care and craft of grocery and are continuing to push the envelope by creating even more fulfillment solutions that help our retail partners grow and meet the evolving needs of their customers and businesses.”

Instacart also just announced the addition of Whole Foods to the platform in 14 markets across Canada. Whole Foods is owned by Amazon, which ranks No. 1 in the Top 1000. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party gross merchandise value (GMV).

Where does Hy-Vee operate?

Hy-Vee has more than 550 locations across eight states in the Midwest, with headquarters in West Des Moines, Iowa. It has 75,000 employees. The supermarket chain is employee-owned. 

Hy-Vee records $13 billion in annual sales, according to the grocer’s website.

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AI will give Kroger customers a better experience through clearer and more informative product listings, the grocer said in a press release. Meanwhile, third-party sellers on the marketplace will be able to use AI for content management and copy optimizations to improve Search Engine Results Pages (SERPs).

“The Kroger Marketplace involves a complex matrix of elements that need to be effectively managed to deliver a seamless customer experience online,” Michael Murphy, group vice president of analytics and execution at Kroger, said in a statement. “From product copy and ratings to reviews and taxonomy, customers are searching out more information than ever before and providing what they need, when they need it is important. We look forward to working with Intelligence Node to deliver an amazing customer experience while empowering our sellers to improve their business performance.”

Kroger ranks No. 8 in the Top 1000, Digital Commerce 360’s ranking of North America’s leading retailers by online sales. 

Integrating AI with Kroger’s other tech providers

Intelligence Node’s technology will work with Mirakl, which provides the platform for Kroger’s marketplace. 

“We look forward to supporting Kroger’s growth plans with our ability to provide content audit, optimization, and execution directly within the Mirakl platform to help improve shopper conversion and seller recruitment and retention,” Intelligence Node cofounder and CEO Sanjeev Sularia said.

Mirakl also provides ecommerce platforms for Best Buy, Macy’s and Saks Fifth Avenue.

Best Buy, Macy’s and Saks rank No. 7, No. 17 and No. 28, respectively.

Kroger online marketplace

Kroger launched its marketplace in 2020 as a bid to compete with Amazon and Walmart. 

Walmart ranks No. 2 in the Top 1000. Amazon ranks No. 1 in the Top 1000. Walmart is also No. 9 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces. Amazon is No. 3 in marketplaces. Kroger does not rank in the marketplace database.

Kroger’s marketplace began as an extension of Kroger Ship, launched in 2018. Kroger Ship is an ecommerce platform for non-perishable grocery items from third-party sellers. The marketplace added an additional 50,000 items. Those were mostly non-grocery products across categories including specialty items, toys and housewares.

The online grocery retailer has reported digital sales growth for several quarters in a row. Most recently in its third fiscal quarter of 2023 ended Nov. 4, Kroger digital sales grew 11% year over year. Delivery sales grew 11% over the same period. Digital engaged households grew 13%, Kroger said. 

Kroger chief financial officer Rodney Millerchip called digital sales a “growth engine” for the grocery retailer. “Everything we continue to see gives us that belief it will continue to be an opportunity to drive deeper customer engagement and growth,” he told investors in November.

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Eventually, Uber acquired Drizly in 2021 for $1.1 billion. At the time, it was Uber’s second-biggest acquisition to date behind its $2.65 billion Postmates deal. That same year, though, Uber also acquired the Chile-based grocery-delivery service Cornershop for $1.4 billion. In addition, Uber subsidiary Uber Freight went on to acquire Transplace for $2.25 billion.

Cornershop will also shut down as a part of the latest round of changes at Uber, CNN reported.

Uber’s reasoning behind shutting down Drizly

Monday’s news that Drizly would be shuttered was first reported by Axios, which quoted a statement from Uber’s senior leadership. The company indicated a desire to focus its efforts behind Uber Eats.

“After three years of Drizly operating independently within the Uber family, we’ve decided to close the business and focus on our core Uber Eats strategy of helping consumers get almost anything — from food to groceries to alcohol — all on a single app,” Pierre-Dimitri Gore-Coty, senior vice president of delivery at Uber, told Axios, according to the report.

Gore-Coty called Drizly an “original industry pioneer” in the delivery space for alcoholic beverages.

Drizly’s time under Uber

Uber allowed Drizly to operate as its own brand and app following the acquisition. The service notably used a different approach from Uber Eats, which hires contract delivery workers. Instead, Drizly provided a system for participating liquor stores to fulfill their own incoming orders.

At the end of 2023, Drizly ranked No. 40 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the top 100 online marketplaces.

FTC action against Drizly

Drizly ran into problems when a cybersecurity incident from 2018 came to light. According to the original complaint, insufficient security at the company resulted in “a malicious actor” gaining access to Drizly’s customer files, “comprising more than 2.5 million records.” The hack ultimately led to an order from the Federal Trade Commission that placed limits on the types of customer data that Drizly could continue to collect and retain.

Drizly’s partners and customers

As of Monday, Drizly’s website still stated that it partnered with “thousands of retailers in more than 1,400 cities” and that its service was available to more than 100 million customers in the U.S. and Canada.

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Signifyd provides fraud prevention services to web merchants. Its network includes 115 retailers in the 2023 Digital Commerce 360 Top 1000 ranking of North America’s leading online retailers. The vendor’s data comes from transactions across thousands of ecommerce websites and 600 million unique shoppers.

Average order value grew 3% year over year for the three-month holiday season, Signifyd found. Meanwhile, fraud attempts declined slightly, down 1%.

Online holiday spending habits

Online holiday shopping started early this year and continued strong through the end of the season, Signifyd found. That’s contrary to some predictions that early season sales would pull spending forward and December sales numbers would be modest. 

“Both we and our merchants were pleasantly surprised by the staying power of the consumer throughout what has typically been the peak holiday period,” Signifyd chief customer officer J. Bennett said in a statement. “This felt like a return to normalcy, with consumers waiting for better deals later in the season. When retailers ultimately offered those deals, consumers responded in a big way.” 

Spending resembled pre-COVID shopping patterns, peaking from mid-November to Dec. 20, Bennett said. 

Growth increased over the three months Signifyd counted as part of the holidays. October sales grew 4% year over year, November sales grew 8%, and December sales were up 11%, it found. That’s the opposite of the trajectory of Signifyd’s predictions of 7%, 5% and 3%, respectively.

Some of the December growth was due to late-season discounts, according to Siginifyd. 23% of all online sales in December used a discount code, a 14% increase from December 2022. 

Online sales by category

Online grocery sales recorded the largest year-over-year change in Q4, Signifyd found. They increased 24% over 2022 levels. Alcohol, tobacco and cannabis sales also showed a significant increase, up 19%. Leisure and outdoor sales grew 11% and electronics sales grew 9%. 

Signifyd also shared sales growth by category in December, the month with the largest year-over-year increase in online sales. Grocery again led growth, up 27% from online grocery sales in December 2022. Electronics were the next-highest category, growing 19% year over year. Leisure and outdoor and luxury sales grew 14% and 12%, respectively.

How do Signifyd’s results compare to other data?

Signifyd reported a larger increase in U.S. online holiday sales than Adobe Analytics. Adobe, however, measures a shorter holiday season encompassing November and December. It found that sales grew 4.9% year over year, based on 1 trillion visits to U.S. retail sites, 100 million SKUs and 18 categories. 

Signifyd’s findings aren’t far off from Adobe’s. Signifyd found that November online sales grew 8% year over year, while Adobe recorded a 6% increase.

Despite slightly different numbers, the technology companies noted many of the same categories driving growth. Signifyd names grocery as the top-growing category during its holiday period. Adobe found that grocery was the fourth-largest of its 18 categories, accounting for $19.1 billion in sales in November and December. Electronics sales also grew significantly in December, per Signifyd. Adobe found electronics were the largest single category over the holidays, responsible for $50.8 billion in sales.

Mastercard SpendingPulse reported a figure in the middle of Adobe’s and Signifyd’s. Online sales grew 6.3% between Nov. 1 and Dec. 24, the credit card company found.

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That data excludes automotive sales. Mastercard SpendingPulse says it measures in-store and online retail sales across all forms of payment and is not adjusted for inflation.

“This holiday season, the consumer showed up, spending in a deliberate manner,” said Michelle Meyer, chief economist at the Mastercard Economics Institute. “The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most.”

Did online holiday sales grow in 2023?

Online holiday sales in 2023 grew from Nov. 1 through Christmas Eve, Mastercard found, and so did in-store sales.

And to give more detail, online retail spending increased at a faster pace than in-store spending. In-store sales grew 2.2% year over year, according to Mastercard SpendingPulse. Yet online retail sales increased 6.3% year over year in the same period, taking “a considerably larger portion of total retail spending.”

“Retailers started promotions early this season, giving consumers time to hunt for the best deals and promotions,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “Ultimately it was about getting the most bang for your buck as consumers spent on a variety of goods and services, resurfacing spending trends from before the pandemic.”

Online holiday sales growth by category

Mastercard SpendingPulse broke out year-over-year data for key retail categories. It did not differentiate online and in-store sales growth and declines. Instead, it provided year-over-year changes in total sales for each category.

Among the five categories it broke out, restaurants grew the most, at 7.8%. Apparel grew 2.4%, closely followed by grocery at 2.1%.

That grocery sales growth extended to web sales as well. Online sales accounted for 11.7% of total weekly grocery spending in the last week of November, according to data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey. United States online grocery sales reached $8.1 billion in November. That’s 5.2% growth over November 2022’s online grocery sales, which reached $7.7 billion.

Conversely, Mastercard found, electronics sales decreased 0.4% year over year, and jewelry sales decreased 2.0%.

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That’s down from the 158.5 million consumers who shopped on Super Saturday in 2022, when it fell on Dec. 17. 2022 was a record year for Super Saturday shoppers since the NRF started tracking the date in 2016. 

“Traditionally, Super Saturday marks the final major shopping holiday of the year,” the NRF President and CEO Matthew Shay said in a statement. “While most consumers still have plenty of shopping left to do, retailers are prepared both online and in stores with gifts, decorations and other items that people need to make this season fun and memorable.”

The NRF’s prediction is based on a survey of 7,973 adult consumers conducted from Dec. 1-6.

Super Saturday vs. Cyber 5

Super Saturday will likely record fewer shoppers this year, a break from other major shopping holidays in 2023. A record 200.4 million U.S. consumers shopped between Thanksgiving and Cyber Monday, beating last year’s record of 196.7 million, per the NRF. The results surpassed the NRF’s prediction of 182 million shoppers by more than 18 million.

Super Saturday is for last-minute shoppers

Many consumers will be nearly done with their shopping this year, as Super Saturday falls the day before Christmas Eve.

“This year, Super Saturday is truly aligned for last-minute shoppers,” Prosper Insights & Analytics executive vice president of strategy Phil Rist said in a statement. “A majority of consumers also plan on purchasing their last gift in the week leading up to Christmas.” 

Neil Saunders, managing director of retail at analysis firm GlobalData, said the same.

“Super Saturday will be a busy day, but a lot of consumers seem to have shopped earlier this year,” he says. “So, for most, the day is likely to be used for last-minute gifts and quick purchases rather than a day of intense shopping.”

Due to the time crunch before Christmas, more consumers are planning to shop in stores this year.

“The day will mostly be about stores as many shoppers will be uncomfortable buying for online delivery so close to Christmas Day. I expect malls and shops to be pretty busy,” Saunders says.

53 million people (37% of Super Saturday shoppers) plan to shop exclusively in stores this year, up from 44 million last year, according to the NRF. 31 million consumers plan to shop exclusively online. The largest group, 58 million people, plan to shop through both channels.

When the NRF’s survey was conducted in early December, consumers were still on the hunt for about half (49%) of their planned holiday purchases. And Super Saturday might be the last shopping day before Christmas, but for many, it’s not the end of holiday shopping. 70% of consumers told the NRF they plan to shop the week after Christmas. Top reasons for shopping the week after Dec. 25 include taking advantage of holiday sales (48%), using gift cards (26%) and returning or exchanging unwanted items (16%).

How retailers are preparing

Some retailers make a final big push leading up to Super Saturday as consumers search for gifts at the last minute. Delivery app Instacart teamed up with some retailers to hold its first “‘Tis a Big Deal Week” between Dec. 17 and Dec. 23. Participants including Bath & Body Works, Best Buy and Lowe’s are offering 20% off $50 or more orders. The promotions could help them capture some of the last Christmas season spending. 

Because of its close proximity to Christmas this year, Super Saturday will also likely be busy for grocery retailers, Saunders says.

“Many will buy their provisions, especially fresh and perishable items, on that day,” he says.

“Super Saturday will be a big day for food and groceries, last-minute gifts such as beauty and fragrance, essentials like wrapping paper, and apparel both as gifts and self-purchases. Gift cards should also do well on the day,” Saunders expects. 

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Parentheses indicate the merchant’s ranking in the Top 1000.

Adobe Inc. (vendor to the Top 1000)

Adobe reported revenue grew 12% year over year to $5.05 billion in its fiscal fourth quarter ended Dec. 1. Net income grew 26% to $1.48 billion. Despite the strong quarter, forecasts of $21.3 billion to $21.5 billion in 2024 revenue came in below analyst expectations.

Adobe provides analytics technology to 203 Top 1000 retailers, website design and development tools to 100 and an ecommerce platform to 84. The technology vendor also shared online sales data, finding that Cyber 5 online sales grew 7.8% to $38.0 billion in 2023.

Amazon.com Inc. (No. 1)

Amazon recorded its highest operating income ever in its fiscal third quarter ended Sept. 30. Operating income nearly quadrupled year over year, growing 343%.

Read more about Amazon’s earnings here.

Costco Wholesale Corp. (No. 6)

Costco said net sales grew 6.1% to $56.72 billion in its first fiscal quarter of 2024 ended Nov. 26. Ecommerce comparable sales grew 6.3% in the same period. E-gift cards, snacks and pet items were all strong in the ecommerce channel, the retailer said.

Read more on Costco’s earnings here. 

Scholastic Corp. (No. 95)

Scholastic reported revenue declined 4% in its fiscal second quarter of 2024 ended Nov. 30.

“Second-quarter results came in below expectations for profit growth, however, largely reflecting lower than forecast participation and spending in our School Reading Events division, which we expect to continue for the remainder of this school year,” CEO Peter Warwick said in a statement. The educational retailer pointed to strength in sales of new editions of popular book franchises including “The Harry Potter Wizarding Almanac” and “The Ballad of Songbirds and Snakes.” 

Target Corp. (No. 5)

Third-quarter sales declined 4.9% for the mass merchant, to $25 billion from $26.12 billion in its fiscal third quarter ended Oct. 28. Meanwhile, Target online sales decreased 6% year over year. Moreover, Target’s online sales declined 6.7% year over year for the first nine months.

Read more about Target’s earnings here.

Vera Bradley Retail Stores LLC (No. 277)

Vera Bradley recorded a revenue decline of 5% to $115.0 million in its third fiscal quarter of 2024 ended Oct. 28. Direct revenue through Vera Bradley stores declined due to store closures and weak demand in outlet locations, the retailer said. Sales through specialty and department stores increased year over year. The digitally native Pura Vida segment declined 18.3% to $17.8 million due to a drop in ecommerce sales, partially offset by in-store growth, the retailer said.

Walmart Inc. (No. 2)

Walmart reported that U.S. online sales grew 24% for its fiscal 2024 third quarter ended Oct. 27. Global ecommerce sales grew 15% over the same period, while international ecommerce declined 3%.

U.S. comparable sales grew 4.9%, and total revenue grew 5.2% to $160.8 billion.

Read more about Walmart’s earnings here.

So what does it mean?

• Costco is back to growing its online business and has plans to improve its website user experience, a sign that the membership retailer sees a future in ecommerce.
• While consumers are still spending on groceries, more discretionary items like purses and books are taking a backseat, as evidenced by Vera Bradley and Scholastic results.

Ecommerce earnings calendar

Here’s when to expect other ecommerce earnings this quarter:

• Amazon.com Inc.: Oct. 26
• Best Buy Co Inc.: Nov. 21
• Chewy Inc.: Dec. 6
• Costco Wholesale Corp.: Dec. 14
• The Gap Inc.: Nov. 16
• The Home Depot Inc.: Nov. 14
• Lowe’s Cos Inc.: Nov. 21
• Macy’s Inc.: Nov. 16
• Target Corp.: Nov. 15
• Walmart Inc.: Nov. 16

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In total, Costco reported $56.72 billion in Q1 sales. That’s a 6.1% increase from $53.44 billion in the prior fiscal year’s first quarter. Costco’s net income in the quarter was $1.59 million, up from $1.37 million the prior year.

Costco is No. 6 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers.

Costco ecommerce sales and fulfillment in Q1

Although Costco did not provide a dollar amount for its ecommerce sales, it said they increased 6.3% year over year in its fiscal Q1. This marks the first quarterly year-over-year increase in Costco ecommerce sales in five fiscal quarters, said Richard Galanti, chief financial officer, on an earnings call with investors. He added that ecommerce “showed strength in several areas.” Costco did not say how much ecommerce sales were as a percentage of total sales in Q1.

In the food department, online sales of appliances grew in the mid-20s percentage range year over year, Galanti said. E-gift cards, pet items and snack items grew in the mid-teen percentage range. Online sales of TVs grew in the high single digits, he said.

Also in the quarter, traffic and shopping frequency increased 4.7% worldwide and 3.6% in the United States, Galanti said on the call. Costco’s average transaction decreased 0.9% worldwide and 1.6% in the United States, Galanti said.

He also said Costco Logistics completed more than 800,000 deliveries of online orders in Q1. That’s up 17% year over year.

Galanti referred to some products available online from Costco as “wow items.” That includes selling 1-ounce gold bars, which are member-exclusive items. Costco has sold more than $100 million in gold during the quarter, Galanti said.

In other rarities, he said Costco sold a Babe Ruth autographed index baseball card for $20,000. Costco is also selling a Mickey Mantle autographed 1951 rookie card “in nearly perfect condition” for $250,000.

Costco mobile app and website performance

Galanti said Costco did not make any “big enhancements and changes” to its site leading up to the Thanksgiving holiday. However, he said, the mobile site had 100% availability during the Cyber 5 period from Thanksgiving through Cyber Monday.

Costco app downloads reached 2.75 million in the quarter, Galanti said. Total Costco app downloads now stand at 30.5 million, he said. That’s a 10% increase in the quarter. It also followed a 40% increase in Costco’s fiscal 2023 compared to the prior year.

Costco site traffic approached 500 million visits in Q1, he said, an increase of “just under 10%.” Average order value also increased 2.5%, Galanti said.

How many members does Costco have?

Costco ended its fiscal Q1 with 72 million paid household members. That’s up 7.6% year over year. The number of cardholders also increased, up 7.1% from last year to 129.5 million.

At the end of Q1, Costco had 33.2 million paid executive members. That’s up by 939,000 since the end of the previous fiscal year, which ended Sept. 3, 2023.

Costco executive members now represent more than 46% of the retailer’s paid members, Galanti said, and more than 73% of Costco worldwide sales. Renewal rates in the United States and Canada were 92.8%, and worldwide, it was 90.5%. Both rates are up 0.1% from the end of Costco’s Q4 2022.

Piece of the Thanksgiving-week pie

Galanti said he received several calls about how many pies Costco sold leading up to Thanksgiving. In the U.S., the mass merchant sold 2.9 million pumpkin pies, as well as more than 1.3 million apple and pecan pies, he said.

And in terms of a slice of the Cyber 5 sales pie, Costco ecommerce grew in the mid-teens year over year, Galanti said.

Along with Amazon.com Inc.’s main website, Costco was the only top holiday retailer to gain traffic share during the Cyber 5, according to a Digital Commerce 360 analysis of Similarweb data. Its share of Cyber 5 traffic among Top 1000 retailers grew modestly to 1.7% in 2023 from 1.6% last year.

How many stores does Costco have?

Costco currently operates 871 warehouses. 600 are in the United States and Puerto Rico, and 108 are in Canada. Internationally, Costco has:

• 40 warehouses in Mexico
• 33 in Japan
• 29 in the United Kingdom
• 18 in South Korea
• 15 in Australia
• 14 in Taiwan
• Five in China
• Four in Spain
• Two in France
• One each in Iceland, New Zealand and Sweden

Furthermore, Costco also operates ecommerce sites in:

• The U.S.
• Canada
• The U.K.
• Mexico
• South Korea
• Taiwan
• Japan
• Australia

Costco earnings

For the fiscal first quarter ended Nov. 26, 2023, Costco reported:

• Net sales increased to $56.72 billion. That’s up 6.1% from $53.44 billion in the prior fiscal year’s first quarter.
• Costco’s net income in the quarter was $1.59 million. That’s up from $1.37 million the prior year.
• Costco ecommerce sales increased 6.3% year over year.

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The Belgium-based brewer owns such brands as Budweiser, Stella Artois and Corona. It says gross merchandise value transacted through BEES increased 27% year over year in the third quarter to $10.4 billion. That accounts for about 66% of AB InBev’s total Q3 revenue of $15.57 billion. In addition, it said BEES had a monthly active user base of 3.4 million users as of Sept. 30. That’s up about 10% from 3.1 million a  year earlier.

AB InBev launched the BEES digital platform in Brazil in 2020 and now does business with over 6 million companies across 25 countries, selling about 500 brands.

A B2B marketplace for beer and non-beer products

Most of AB InBev’s sales are to retailers that order beer brands online through the BEES digital platform, which includes a mobile app designed to show retail buyers personalized product recommendations and let them schedule deliveries and manage orders and deliveries. But the brewer is also reporting fast growth through the BEES marketplace for beer and non-beer products from third-party sellers, including major brand manufacturers such as Kraft Heinz.

Michel Doukeris, CEO, AB InBev

AB InBev CEO Michel Doukeris said on a third-quarter earnings call with investment analysts that the BEES third-party marketplace generated Q3 revenue of “approximately $420 million in GMV, representing approximately $1.7 billion on an annualized basis.” That puts the BEES marketplace on course to double gross merchandise sales this year, up from the $850 million it recorded in full-year 2022. AB InBev notes that 65% of all BEES customers are purchasing products on the marketplace.

Not all BEES channels showed year-over-year growth. Q3 direct-to-consumer sales of $125 million on the digital platform increased 8.7% from $115 million in Q2 but fell by about two-thirds from $385 million a year earlier.

AB InBev’s overall Q3 revenue grew 5% year over year to $15.57 billion from $15.09 billion.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

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