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Ecommerce earnings recap: What you missed from Canada Goose, PetMed Express and more

Mary Meisenzahl — Fri, 09 Feb 2024 17:55:55 +0000

More retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America reported ecommerce earnings results for the most recent fiscal quarter. Retailers reported mixed results across industries including apparel, pets and beauty. Here’s the ecommerce earnings summary you need to know from this quarter. Read more ecommerce earnings coverage here.

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

Amazon.com Inc. (No. 1)

Amazon beat expectations with earnings for its fiscal fourth quarter ended Dec. 31, 2023. Its net sales in the quarter grew 14% year over year to $170.0 billion.

Full-year sales grew 12% to $574.8 billion in 2023, up from $514.0 billion in 2022.

Read more about Amazon’s earnings here.

Alibaba Group

Alibaba’s revenue grew 5% to $36.67 billion in its third quarter ended Dec. 31.

Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by GMV. Tmall ranks No. 2. Taobao and Tmall grew their combined revenue 1% to $17.43 billion.

Bark (No. 186)

Bark reported revenue declined 6.9% to $125.1 million in its fiscal third quarter ended Dec. 31. Results were at the high end of Bark’s expectations. The retailer attributed the sales decline to fewer total orders due to a decrease in subscribers. Direct-to-consumer (DTC) sales, which make up the bulk of revenue, declined 7.6%. However, improvements to Bark’s website are driving increases in traffic and conversion, the retailer said.

Canada Goose (No. 218)

Canada Goose said total revenue grew 6% to $609.9 million in its fiscal third quarter ended Dec. 31. DTC revenue grew 14% due to growing in-store retail sales, partially offset by a decline in ecommerce. Wholesale sales, meanwhile, declined 28%. Canada Goose is evaluating its online product assortment to potentially make room for new categories going forward, said Jonathan Sinclair, chief financial officer.

The Container Store (No. 347)

The Container Store net sales declined 14.8% to $214.9 million in its fiscal third quarter ended Dec. 30. Online sales declined even more drastically, down 26.3% year over year. Website-generated sales, which include those designated for curbside pickup, declined 15.8%, accounting for 21.8% of net sales in the quarter. That’s flat with Q3 last year, the retailer said.

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, 2023. 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.

E.l.f. Cosmetics Inc. (No. 951)

E.l.f. Reported it grew net sales 85% to $270.9 million in its fiscal third quarter ended Dec. 31. Online sales made up 24% of total revenue, compared to 18% in the year-ago period. Loyalty members are a driving force behind online sales growth, the retailer said, accounting for nearly 80% of online sales. The Beauty Squad loyalty program has 4.5 million members, and grew 30% year over year, e.l.f. said.

Estee Lauder (No. 43)

Estee Lauder reported net sales declined 7% to $4.28 billion in its second fiscal quarter ended Dec. 31. The retailer attributed much of the sales decline to waning demand in China. It will lay off 3% to 5% of its workforce in 2024.

Mattel (No. 205)

Mattel reported net sales grew 16% to $1.6 billion in its fiscal fourth quarter ended Dec. 31, while sales were flat for the year. Dolls, vehicles, games and building sets were the most successful categories, the retailer said.

“We expect the toy industry to decline in 2024, although at a lesser rate than 2023. The anticipated decline is due to a lighter toy theatrical film slate and the impact of the shift in consumer spending patterns towards experiences and services, which we believe will moderate over the year,” CEO Ynon Kreiz told investors.

PetMed Express Inc. (No. 354)

PetMed Express reported net sales for its fiscal third quarter ended Dec. 31 grew 11% year over year to $65.3 million. Recurring orders through the AutoShip & Save and PetPlus programs made up the majority of sales, accounting for 52.2% of revenue. That’s an increase from 42.3% of revenue in the year-ago period.

The retailer noted that pet food is a small but fast-growing part of the business. PetMed Express recently added the brand Hill’s Science Diet and has plans to pursue more premium pet food partnerships in the future.

Ralph Lauren (No. 78)

Ralph Lauren said revenue grew 6% to $1.9 billion in its fiscal third quarter ended Dec. 30. Global direct-to-consumer (DTC) same-store sales grew 9% over the same period. Gross profit was $1.3 billion, the retailer said.

Tapestry (No. 44)

Tapestry reported a 3% increase in net sales to $2.08 billion in its fiscal second quarter ended Dec. 30. Online sales grew in the single digits, the retailer said, making up one-third of total revenue. Direct-to-consumer revenue grew 4% over the period. Tapestry also opened a new fulfillment center in Las Vegas as part of a plan to grow omnichannel capabilities, the retailer said.

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 of its fiscal year.

Read more about Target’s earnings here.

Under Armour Inc. (No. 97)

Under Armour reported 2% growth in ecommerce revenue during its fiscal 2024 third quarter, which ended Dec. 31, 2023. Total revenue declined 6% to $1.5 billion.

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.

The Walt Disney Company Ltd. (No. 100)

Disney said revenue for its fiscal first quarter ended Dec. 30 was flat from the year-ago period at $23.5 billion. DTC revenue, which includes the company’s streaming channels, grew 15% to $5.5 billion in the quarter. The DTC segment led to an operating loss of $138 million, but that’s a decrease of 86% from the loss in Q1 of 2023. The company said it projects streaming to become profitable in fiscal 2024.

So what does it mean?

The pet industry is subject to the same troubles facing other retailers. PetMed Express reported success with the same strategy that’s been successful for Chewy based on food and medications. Meanwhile, Bark felt a pullback in more discretionary pet items.
e.l.f.’s 85% sales growth on top of the 49% it grew in Q3 2023 shows that the cosmetics retailer isn’t slowing down as it gains name recognition and expands on social media platforms.

Ecommerce earnings calendar

Here’s when other ecommerce earnings are scheduled to report this quarter:

Amazon.com Inc.: Feb. 1
Best Buy Co Inc.: Feb. 29.
Costco Wholesale Corp.: Dec. 14
The Home Depot Inc.: Feb. 20
Lowe’s Cos Inc.: Feb. 27
Target Corp.: March 5
Walmart Inc.: Feb. 20

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Estee Lauder announces layoffs in Q2 earnings

Mary Meisenzahl — Wed, 07 Feb 2024 18:58:26 +0000

The Estee Lauder Cos. Inc. will lay off 3% to 5% of its global workforce this year, it said in a Feb. 5 second-quarter earnings call. Those job cuts will impact up to 3,100 of the beauty retailer’s 62,000 employees, The Wall Street Journal reported.

Layoffs are part of a multi-year plan to rebuild profit margins in 2025 and 2026, Estee Lauder said.

“We are focused on strategically leveraging our strengths to accelerate our return to more sustainable profitable growth while elevating our consumer activations and increasing our operating agility,” chief financial officer Tracey Travis said. “The restructuring program is designed to right-size and streamline select areas within our organization, which unfortunately necessitates us making the difficult decision of an expected net reduction in positions globally of 3% to 5%.”

Estee Lauder ranks No. 43 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales.

Wayfair (No. 10 in the Top 1000), Amazon (No.1), Macy’s (No. 17) and Levi Strauss (No. 191) all also announced recent layoffs.

What were Estee Lauder’s financial results?

Estee Lauder reported net sales declined 7% to $4.28 billion in its second fiscal quarter ended Dec. 31.

Skin care made up the largest portion of sales, accounting for $2.17 billion in the quarter. That was a decline of 10% from $2.43 billion in the year-ago period. Makeup sales also declined, down 8% year over year to $1.17 billion. Fragrance sales grew slightly to $737 million from $734 million. Meanwhile, hair care sales declined 5% to $173 million.

The retailer attributed much of the sales decline to waning demand in China.

“This decline was primarily driven by the slowdown of overall prestige beauty in mainland China,” CEO Fabrizio Freda said in a statement. Online sales in China also declined, with worse than expected performance on Double 11 Day, also known as Singles Day, on Tmall. Tmall is an Alibaba-owned marketplace. Tmall is No. 2 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Brick-and-mortar sales increased in China, but they were more than offset by the online decline.

Net sales in the Asia Pacific region fell 7% year over year, and the retailer lost some market share there, Freda said. Net sales in the Americas declined 1%. That was driven by decreasing demand in North America, partially offset by growth in South America. In Europe, the Middle East, and Africa, net sales declined 14% in the period. Part of the decline is due to rightsizing inventory levels, Estee Lauder chief financial officer Tracey Travis said, with 2% attributable to “business disruptions in Israel and other parts of the Middle East.”

Estee Lauder earnings

For the fiscal second quarter ended Dec. 31, 2023, Estee Lauder reported:

Net sales declined 7% to $4.28 billion.
Gross profit declined 8% to $3.13 billion.

For the six months ended Dec. 31, 2023, Estee Lauder reported:

Net sales declined 9% to $7.80 billion.
Gross profit declined 12% to $5.57 billion.

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

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Ecommerce earnings recap: What you missed from Amazon, Tractor Supply and more

Mary Meisenzahl — Fri, 02 Feb 2024 20:58:25 +0000

More retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America reported ecommerce earnings results for the most recent fiscal quarter. Retailers reported mixed results on demand returning to normal levels. Here’s the ecommerce earnings summary you need to know from this quarter. Read more ecommerce earnings coverage here.

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

Amazon.com Inc. (No. 1)

Amazon beat expectations with earnings for its fiscal fourth quarter ended Dec. 31, 2023. Its net sales in the quarter grew 14% year over year to $170.0 billion.

Full-year sales grew 12% to $574.8 billion in 2023, up from $514.0 billion in 2022.

Read more about Amazon’s earnings here.

Boot Barn Inc. (No. 366)

Boot Barn reported that net sales grew 1.1% to $520.4 million in its fiscal third quarter ended Dec. 30. Ecommerce same-store sales declined 11.5%, and retail same-store sales declined 9.4%.

“Our online channel has felt pressure due to less efficient online marketing spend, partly caused by an increase in digital spend by a handful of vendors and competitors,” CEO Jim Conroy said. “Our objective continues to be to maximize profitability for our online business, so we will remain disciplined with our digital spend so as not to erode earnings and our desire to grow the top-line sales,” he said. The retailer expects further ecommerce declines next quarter.

Columbia Sportswear Co. (No. 149)

Columbia reported net sales declined 9% to $1.1 billion in its fiscal fourth quarter ended Dec. 31. Net sales declined 1% for the full year. U.S. net ecommerce sales declined by a high single-digit percent, the retailer said without specifying further.

“Softer consumer traffic and weather weighed on results. Our DTC business performed well during peak sales windows like Black Friday and Cyber Monday, but fell off during non-peak periods,” CEO Tim Boyle said.

Costco Wholesale Corp. (No. 6)

Deckers Brands (No. 74)

Deckers reported revenue grew 16% to a record $1.56 billion in the fiscal third quarter ended Dec. 31.

“Our brands delivered Deckers’ largest quarter in history, with record revenue and earnings as both HOKA and UGG drove exceptional performance in the quarter, led by our DTC channel and high levels of full-price selling,” CEO Dave Powers said in a statement.

Pitney Bowes (shipping carrier to the Top 1000)

Pitney Bowes announced revenue declined 4% to $872 million in its fiscal fourth quarter ended Dec. 31. Full-year revenue declined 8% to $3.3 billion. Revenue from global ecommerce declined 7% in the fourth quarter to $381 million and was down 14% for the full year. Meanwhile, domestic parcel volume grew, it said.

Pitney Bowes is a shipping carrier to 104 retailers in the Top 1000.

Sally Beauty Supply LLC (No. 523)

Sally Beauty said consolidated net sales declined 2.7% to $931 million in its fiscal first quarter ended Dec. 31. Comparable sales declined 0.8% during the period. Online sales remained flat with the year-ago period, comprising $91 million in sales.

The beauty retailer reported some improvements in demand, with a return to normalcy among customers over the holiday season.

Skechers USA Inc. (No. 302)

Skechers said sales for the fiscal fourth quarter ended Dec. 31 grew 4.4% to $1.96 billion. Annual sales grew 7.5% to a record $8.0 billion. Direct-to-consumer sales, which encompass ecommerce, grew 20.3% in Q4 and 24.3% for the whole year. Meanwhile, wholesale sales declined 8% for both the fourth quarter and full year.

Online DTC sales recorded double-digit growth, Skechers said.

“The momentum in our direct-to-consumer segment is indicative of strong consumer demand driven by the combination of our fresh and innovative product paired with effective brand marketing. We are excited about our omnichannel growth opportunities as we continue to deliver on our strategy to expand our direct-to-consumer presence worldwide,” said John Vandemore, chief financial officer.

United Parcel Service Inc. (shipping carrier to the Top 1000)

UPS consolidated revenue declined 7.8% to $24.9 billion in its fiscal fourth quarter ended Dec. 31. Consolidated operating profit declined 22.5% during the same time period to $2.5 billion. The carrier said it will eliminate 12,000 jobs this year as a plan to generate $1 billion in cost savings as revenue and package volume decline.

532 online retailers in the Digital Commerce 360 Top 1000 use UPS for their fulfillment — either exclusively or in combination with other carriers.

Target Corp. (No. 5)

Read more about Target’s earnings here.

Tractor Supply Co. (No. 99)

Tractor Supply reported net sales declined 8.6% to $3.66 billion in its fiscal fourth quarter ended Dec. 30. The retailer did not share ecommerce sales for the quarter but said annual online sales topped $1 billion for the first time in 2023. It also reached 7 million mobile app downloads, with 2 million of those downloads in 2023.

“We continue to capitalize on opportunities to accelerate our growth,” CEO Hal Lawton told investors. “Between our website and our mobile app, we have more visitors online now than we do in our stores. These digital assets are essentially the front door to Tractor Supply. We’ll be focused this year on improving our digital customer experience and capability as we look to accelerate conversion rate.”

Lawton cited poor weather, high interest rates and inflation as headwinds facing Tractor Supply and impacting consumer demand.

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.

1-800-Flowers.com Inc. (No. 47)

1-800-Flowers revenue declined 8.4% to $822.1 million in the second fiscal quarter ended Dec. 31. Ecommerce revenue declined, but slightly more slowly. It was down 6.6% to $738.4 million. Average order value grew 3% year over year as higher-income consumers became a larger percentage of the customer base and tended toward more expensive gifting purchases, the retailer said. Meanwhile, lower-income consumers continued to be impacted by macroeconomic pressure and cut back spending.

During the first half of our fiscal year, we have been prudent with our marketing spend in a challenging consumer environment in which we didn’t see an adequate return on investment,” president Thomas Hartnett said.

So what does it mean?

UPS and Pitney Bowes both recorded declining revenue during the peak holiday season. UPS is still grappling with the fallout of its near strike last year and recovering volume it lost during that period.
Footwear retailers Skechers and Deckers both recorded significant growth in their most recent quarters, with major gains in DTC sales. Other apparel retailers did not report the same gains in consumer demand.

Ecommerce earnings calendar

Here’s when other ecommerce earnings are scheduled to report this quarter:

Amazon.com Inc.: Feb. 1
Best Buy Co Inc.: Feb. 29.
Costco Wholesale Corp.: Dec. 14
The Home Depot Inc.: Feb. 20
Lowe’s Cos Inc.: Feb. 27
Target Corp.: March 5
Walmart Inc.: Feb. 20

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Ecommerce and retail stories to watch at CES

Mary Meisenzahl — Mon, 08 Jan 2024 22:13:09 +0000

Technology companies are gathering in Las Vegas this week for the annual Consumer Electronics Show (CES). Executives from these companies will discuss topics that are essential to ecommerce in 2024, including artificial intelligence (AI), cyber security, augmented reality (AR) and other retail technologies.

CES 2024 is put on by the Consumer Technology Association from Jan. 9 through Jan. 12.

These are the key stories to take note of.

Walmart CEO’s keynote

Walmart CEO Doug McMillon will give the keynote speech on the first day of the technology conference. McMillon will “share Walmart’s vision to design and build technology that will usher in the next generation of retail,” CES says of the speech.

He is slated to discuss new ways Walmart will use technology in 2024 and beyond, both in stores and online.

The talk will be watchable via livestream at 2 p.m. PST.

Walmart ranks No. 2 in the 2023 Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales. It also ranks No. 9 among marketplaces by gross merchandise value.

Newegg’s TikTok Shop

Newegg is using CES to further test and grow its presence on TikTok Shop. The technology retailer will be part of a shopping event titled “TikTok Shop: Live from CES 2024.” A host from Newegg will share deals on retail products through TikTok’s ecommerce platform at 3:30 p.m. PST on Jan. 11.

The retailer was an early participant when TikTok launched ecommerce in the U.S. earlier this year. Newegg ranks No. 57 in the Top 1000.

Ecommerce customer loyalty

Another panel for Wednesday will cover the future of ecommerce, “focusing on the importance of authenticity, trust, and security in a world where these values are fleeting — and increasingly sought after,” according to a press release.

Speakers from Target, Microsoft, and Adobe will address how retailers can pursue relationships with customers that keep them coming back for the long term. They will also discuss retail media networks and how they impact both B2B and B2C commerce. The CEO of video commerce platform Firework will also discuss the implications of live shopping.

L’Oreal keynote

L’Oreal is the first beauty company to have a keynote speaker at CES this year with Nicolas Hieronimus. He will discuss how technology is transforming the business, which is now physical, digital and virtual. For example, Hieronimus will discuss ways L’Oreal is already using technology to better reach customers, like AI-powered mobile applications that provide skin care guidance and augmented reality makeup try-on capabilities.

Instacart announces AI-powered advertisements

Instacart announced new technology capabilities on its smart carts at CES.

The grocery delivery company debuted ads on Caper Carts. Instacart describes them as AI-powered smart carts that will make personalized recommendations through advertisements. Recommendations will be based on the time of year, ongoing promotions, and other products already in the customer’s cart, Instacart says. For example, shoppers might receive advertisements for candy ahead of Valentine’s Day, or see an ad for ice cream if they purchase ice cream cones.

“We’re excited to introduce the next phase of this work with a new advertising solution that will further enable thousands of CPG brands to connect with high-intent customers with measurable results — in all the ways people choose to shop,” said Fidji Simo, CEO and Chair of Instacart, in a press release. The first carts with these ads will launch soon, Instacart says. The delivery company plans to have thousands of carts working by the end of the year.

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Online grocery sales grow year over year in November

Abbas Haleem — Wed, 20 Dec 2023 19:21:44 +0000

Online sales accounted for 11.7% of total weekly grocery spending in the last week of November, new survey data shows.

United States online grocery sales reached $8.1 billion in November, according to data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey. That’s 5.2% growth over November 2022’s online grocery sales, which reached $7.7 billion. Online grocery sales were divided into three key categories: delivery, pickup, and ship-to-home.

Is the online grocery market growing?

Survey data found that mass merchants surpassed supermarkets to become the primary retail destination — online and offline — for most households. In November, 42% of U.S. households used a mass merchant (for example: Walmart or Target) for most of their in-store or online grocery purchases, data showed. That’s a reversal from May when 42% of U.S. households reported using supermarkets as their primary stores.

“The current economic realities and omnichannel strategies are aiding mass retailers in attracting more customers today,” said David Bishop, partner at Brick Meets Click. “The price advantage that a mass rival, such as Walmart, enjoys is motivating cash-strapped households to shift where they shop, and mass customer engagement strategies are making it easier for those customers to shop the way they want.”

Year-over-year changes in fulfillment choice

Brick Meets Click and Mercatus define pickup as including in-store, curbside, lockers and drive-up. Delivery includes those from first- and third-party providers. Ship-to-home includes common and other parcel carriers.

In both 2023 and 2022, the pickup option brought in $3.6 billion in November online grocery sales. Delivery grew to $3.2 billion in online sales in 2023. That’s up from $2.9 billion in November 2022. Ship-to-home sales grew slightly to $1.3 billion in 2023. That’s an increase from $1.2 billion last year.

Online grocery sales among Top 1000 retailers

The Food/Beverage category of Top 1000 retailers — which includes grocers such as The Kroger Co. and Albertsons Inc. — brought in an estimated $31 billion in online sales in 2022. Notably, the category does not include mass merchants such as Walmart or Target. The Top 1000 is Digital Commerce 360’s ranking of the largest online retailers in North America by annual web sales.

The growth in online grocery sales among Food/Beverage retailers has been consistent for the last five years but, because of the COVID-19 pandemic, surged in 2020. That year, online grocery sales from Food/Beverage retailers more than doubled to $27.1 billion from $13.4 billion in 2019. The Food/Beverage category of the Top 1000 then had the largest compound annual growth rate (CAGR) from 2019 through 2022 — 32.4%. The Top 1000 category with the next-highest CAGR in that time frame was Health/Beauty, at 26.5%. On the low end, the Office Supplies category had the slowest growth at 7.4%.

Moreover, the grocery/fresh food subcategory grew faster than any other subcategory within the Food/Beverage from 2019 through 2022. It also outpaced growth for the category as a whole (34.8% for the subcategory versus 32.4% for the entire category). Then, Food/Beverage online sales grew by only 3.4% in 2022 as many consumers returned to shopping for food in supermarkets.

It’s also worth noting that growth in online sales of food and drink did not begin with the pandemic. In the three-year period from 2016 to 2019, Top 1000 sales in the Food/Beverage category posted a 32.7% CAGR.

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Instacart teams up with retailers to woo last-minute holiday shoppers

Mary Meisenzahl — Wed, 20 Dec 2023 14:45:32 +0000

Delivery app Instacart teamed up with some retailers to hold its first “Tis a Big Deal Week” between Dec. 17 and Dec. 23. Participating retailers are offering 20% off orders of $50 or more. The promotions could help them capture some of the last Christmas season spending.

Several retailers working with Instacart on the promotions are part of the Top 1000, Digital Commerce 360’s ranking of retailers in North America by online sales.

Retailers include:

Bath & Body Works (No. 56 in the Top 1000)
Best Buy (No. 7)
The Body Shop
The Container Store (No. 346)
Kiehl’s
Lowe’s (No. 12)
Michaels (No. 111)
Petco (No. 92)

Instacart is just one last-minute holiday fulfillment option

With less than a week left until Christmas, some retailers are promoting omnichannel fulfillment and shipping from local stores via Instacart to assure customers that they’ll receive purchases on time.

Instacart’s promotion ahead of the holiday says that explicitly. “Perfect for last-minute gift-givers, customers can ‘skip the ship’ and save with Instacart’s same-day delivery in as fast as an hour, ensuring gifts arrive in time for Christmas,” the delivery company’s release says.

That’s on trend with how other retailers are approaching the week leading up to Christmas, says Neil Saunders, managing director of retail at analysis firm GlobalData.

“BOPIS will be used extensively both in terms of orders placed for collection and the collection of orders placed earlier in the week,” he says. “Consumers are comfortable ordering for collection in store right up to the last minute. For many, BOPIS is a way of getting organized with last-minute shopping as it saves them having to traipse round stores finding things they need.”

Two of the biggest ecommerce retailers, Walmart and Target, are also promoting omnichannel fulfillment. Walmart’s same-day curbside pickup and delivery will both run through Dec. 24 at 4 p.m., with an order deadline of 12 p.m. that day. Walmart also offers express delivery, which arrives in two hours. That service will also run through 4 p.m. on Christmas Eve. Target customers can place curbside and BOPIS (buy online, pick up in store) orders as late as 6 p.m. on Christmas Eve. The deadline to receive an order by delivery is 4 p.m. on Dec. 24, with delivery through Target’s Shipt service in as little as one hour.

Retailer strategy behind pre-holiday Instacart offers

“Retailers will be assessing their inventory positions and will be discounting heavily on seasonal items” on Super Saturday and the final few shopping days before Christmas, Saunders says. “If things like holiday décor and decorations and sundries like wrapping paper and cards have not sold by Saturday, they will be keen to shift them.”

These last-minute purchases will primarily be impulse buys, likely in the beauty and fragrance and apparel categories, alongside gift cards, he says.

Pet items can also fall into this category.

“We are proud of our longstanding partnership with Instacart to increase access to Petco’s curated selection of products supporting pets’ whole health,” Petco told Digital Commerce 360 in a statement. “With most of our Merry Makings gifts for all pet types under $20 at Petco stores and online, as well as special discounts for Instacart shoppers checking off their gift lists between now and Dec. 23, we are helping pet parents focus on what matters most — making memories together.”

A final sales push can be an opportunity to clear holiday inventory, like Christmas-themed pet toys and apparel.

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TikTok becomes a driving force behind holiday shopping decisions

Mary Meisenzahl — Wed, 13 Dec 2023 22:15:11 +0000

TikTok is playing a key role in holiday shopping decisions this year. The short-form video app’s popularity, especially among young consumers, has driven sales and pushed popular products out of stock. Now, experts say TikTok is a key part of how many consumers decide what to buy this holiday season, both for themselves and others.

Social media platforms, including TikTok, drove 5.72% of total web traffic to retailers in the Top 1000 in November, from 5.63% in November 2022, based on Digital Commerce 360 analysis of Similarweb data. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales. That represents a fairly large range, with significant differences by category.

Jewelry and apparel retailers receive far more traffic share through social media than the average, 12.96% and 11.15%, respectively. Both categories have grown traffic from social media year over year, up from 11.26% and 9.04%, respectively. Health and beauty, one of the most popular categories on TikTok, ranked third in social media referrals, with 7.38% of web traffic in November, increasing from 5.92% in 2022.

How is TikTok impacting holiday shopping?

Social media virality is a key factor in consumers’ purchasing decisions, says Ellyn Briggs, brands analyst at Morning Consult.

“Roughly half of Gen Z adults (46%) and millennials (50%) say a product going viral is important to them when considering whether or not to purchase it,” she says, citing decision intelligence at Morning Consult.

TikTok, more than any other app right now, is synonymous with viral marketing, according to Briggs.

“TikTok users have proven themselves to be voracious consumers,” Briggs says. These users have “notably higher purchase consideration” for most brands than U.S. adults as a whole, according to Morning Consult data. And that consumption extends beyond online shopping to purchases in stores, too. TikTok users are more likely than the general public to say they enjoy shopping in stores. They’re also 7 percentage points more likely to be Amazon Prime members than all adults, Morning Consult found.

TikTok is essentially a shopping guide for consumers who are already primed to spend more than the average person, both in stores and online, Briggs says. It’s also a form of brand discovery for Gen Z, a group more likely to say it is open to purchasing from new brands than any other generation, at 77%.

Those findings are echoed by Insider Intelligence, which reports that 53% of U.S. adults between 18 and 29 years old use TikTok for product discovery. Those consumers are more reluctant to actually purchase through the platform, however. Just 8% of that age group said they would buy through a TikTok shop if it was an option.

Who is using TikTok for shopping?

Young people are the most likely consumers to make purchasing decisions based on TikTok, Briggs says.

“TikTok is one of Gen Z’s most-used social media platforms, and it’s their favorite for following influencer content,” Briggs says.

Within that cohort, there’s a sharp divide by gender, with women much more likely to use TikTok and make purchases based on that usage. 75% of Gen Z women use TikTok, according to Morning Consult’s data. 62% of Gen Z men use the app. TikTok has grown 21% among Gen Z since Morning Consult conducted the same study in 2020.

Female Gen Z TikTok users are most likely to engage with “haul” videos, in which a creator shares products they’ve purchased. These videos are the most likely type of content to drive a purchase from a Gen Z consumer, per Morning Consult. 42% of Gen Z consumers say they’ve purchased a product based on viewing a haul video. Nearly a third of Gen Z TikTok users say they’ve purchased a product because of a “get ready with me” video and “routine” videos, both of which typically show a creator using skin care and beauty products.

TikTok users are particularly prone to purchasing clothes and beauty products shown on TikTok. 49% of female Gen Z respondents said they’ve purchased clothes because they were sponsored by an influencer, and 53% said the same about beauty products. It’s no surprise that those two categories are some of the most popular on TikTok, Briggs says.

How are retailers reacting?

Retailers are paying attention to TikTok as a channel to drive sales thanks to the platform’s undeniable impact.

“TikTok has proven itself as a must-invest media channel over the last few years, at least for any brands trying to reach a young audience,” Briggs says.

She points to e.l.f. Cosmetics (No. 950 in the Top 1000), Charlotte Tilbury, Crocs (No. 104) and Skims (No. 218) as a few examples of retailers that successfully grew brand awareness, favorability, and sales through TikTok.

32% of respondents in a Digiday poll of 400 brand and retail professionals in November 2023 say TikTok is “extremely valuable” for revenue. That’s up from just 8% in 2022. 60% said TikTok will play an important role in holiday marketing, up from 55% in 2022. Those retailers are putting money behind their answers: 78% say they allocated funds for TikTok marketing in Q3 2023, up from 54% in Q1 of the same year. 35% of retailers also said they’re purchasing ads on TikTok, an increase from 24% last year.

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Consumers spend longer making holiday purchase decisions in 2023, new data shows

Abbas Haleem — Wed, 13 Dec 2023 21:26:37 +0000

Consumers are spending more time exploring retailers’ websites this holiday season, according to data from the ecommerce personalization platform Nosto.

Shoppers are taking longer this year to decide what they want to purchase, according to Nosto. The company analyzed more than 112 million website visits between Black Friday and Cyber Monday, the period known as the Cyber 5. The visits were to 1,127 online stores that use Nosto’s platform, including merchants based in North America, the United Kingdom and other parts of Europe, Latin America and the Asia Pacific region.

Nosto consumer insights from online holiday shopping

Online shoppers viewed 22% more pages on retailers’ websites per visit during the Cyber 5 in 2023 than they did in 2022, according to Nosto. They also spent 10% longer on each page, the data showed.

Compared with the same period in 2022, online shoppers were more than five times as likely this year to click on retailers’ on-site product recommendations. They were 81% more likely to click on personalized content that retailers showed on their ecommerce sites, and 13% more likely to click through product recommendations retailers sent via email marketing.

“Shoppers are definitely putting more time and effort into their holiday shopping, meaning that the retailers who make it easier for them to find the right products are reaping the benefits,” said Jan Soerensen, general manager for North America at Nosto.

Nosto attributes a 4.41% year-over-year increase in sales to the longer browsing time. Similarly, it also attributed a 4.1% increase in average order value for the online retailers to the increased time.

Understanding traffic growth by category, channel

Nosto found that traffic grew year over year among the health and beauty, fashion and accessories, and sporting goods and hobbies categories. Although the highest year-over-year traffic increase was among fashion and accessories brands that Nosto tracks (26.38% growth), the health and beauty category had the largest increases among the three when it came to both sales and average order value (AOV) increases.

Health and beauty online retailers that Nosto tracks increased sales 14.52% as AOV grew 11.21%. Fashion and accessories retailers using the platform increased sales 4.56% as AOV rose 4.27% year over year. Sporting goods and hobbies retailers increased traffic 23.03%, lifting sales 12.85% year over year as AOV grew 7.84%

All the while, mobile commerce accounted for nearly three-quarters of all traffic (74%) to online retailers using the Nosto platform during the Cyber 5. Mobile ecommerce sales represented 62% of total sales among online retailers Nosto tracks.

“However, consumers are still using desktops for their highest-value purchases, with this channel seeing an AOV of $141.59 (USD) compared with $109.01 on mobile,” Nosto said in a press release.

This mobile-majority share of ecommerce sales during the Cyber 5 falls in line with data from Adobe Analytics. Adobe found that Thanksgiving “set a new bar” for mobile shopping. 59% of Thanksgiving online sales came from a smartphone, compared with 55% in 2022, according to Adobe. And mobile shopping carried on strong through the Cyber 5, with 51.8% of online sales coming from smartphones. That’s up from 49.9% during the 2022 Cyber 5 period.

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Ecommerce earnings recap: What you missed from Chewy, Land’s End, Footlocker and more

Mary Meisenzahl — Fri, 08 Dec 2023 17:36:08 +0000

More retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America reported ecommerce earnings results for the most recent fiscal quarter. Although ecommerce sales results vary widely, retailers made it clear that online sales are a priority, with investments in fulfillment and customer experience. Here’s the ecommerce earnings summary you need to know from this quarter. Read more ecommerce earnings coverage here.

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

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.

Academy Sports and Outdoors Inc. (No. 136)

Net sales declined 6.4% to $1.4 billion in its fiscal third quarter ended Oct. 28. Online sales made up 9.4% of total sales, down slightly from 9.5% penetration in Q2.

“Our sales and net earnings for the third quarter came in below expectations, primarily driven by weakening consumer sentiment coupled with above-normal temperatures that negatively impacted demand for Fall product,” CEO Steve Lawrence said in a written statement.

Big Lots Inc. (No. 253)

Big Lots reported net sales declined 14.7% to $1.0 billion in its fiscal third quarter ended Oct. 28. Comparable sales declined 13.2%. Despite the sales decrease, Big Lots is on track to record year-over-year growth in Q4 for the first time in three years, the retailer said. The retailer did not share online sales data, but CEO Bruce Thorn says it has plans to improve listings of big-ticket furniture items and seasonal products online.

Chewy Inc. (No. 13)

Chewy net sales grew 8.2% to $2.74 billion in its fiscal third quarter ended Oct. 29. Autoship subscription orders remain the bulk of the business, growing 13% and making up 76% of net sales. About 85% of sales are consumable products like food and medications, Chewy said, and consumers are not trading down to non-premium alternatives. More discretionary categories like treats and toys have slowed, though, the retailer says.

Designer Brands Inc. (No. 77)

Designer Brands reported net sales declined 9.1% to $786.3 million in its fiscal third quarter ended Oct. 28. Comparable sales declined 9.3%.

“This quarter, we were impacted by a footwear market that contracted for the first time since COVID coupled with unseasonably warm weather, which significantly reduced customer demand for shoes and pressured our heavily seasonal assortment,” CEO Doug Howe said in a written statement.

Howe says he does not foresee pressure alleviating in the near term.

Dollar General Corp. (No. 724)

Dollar General net sales increased 2.4% to $9.7 billion in its fiscal third quarter ended Nov. 3. Growth was primarily driven by new store openings, the retailer said, while same-store sales declined 1.3%.

Average transaction amount declined as Dollar General consumers are squeezed by high prices across the economy, causing them to purchase less, CEO Todd Vasos told investors. Meanwhile, operating profit decreased by 41.1%.

Five Below Inc. (No. 581)

Five Below grew net sales 14.2% to $736.4 million in its fiscal third quarter ended Oct. 28. Much of the growth is attributable to the 74 new stores it opened in the quarter. Comparable sales grew 2.5%.

Online penetration remains low, says CEO Joel Anderson. Sales of discretionary categories including games, toys, and Halloween items were strong, the discount retailer says.

Foot Locker Inc. (No. 51)

Foot Locker’s total sales declined 8.6% to $1.9 billion in its fiscal third quarter ended Oct. 28. Comparable store sales declined similarly, down 8.0% “driven by ongoing consumer softness,” the retailer said in a statement.

Online comparable sales declined 5.6% over Q3 2022, mostly due to Foot Locker shuttering its East Bay online brand. Excluding East Bay, ecommerce comparable sales grew 0.4%. Online sales made up 17% of total sales in the quarter.

J. Jill Inc. (No. 247)

J. Jill reported net sales declined 0.1% to $150.1 million in its fiscal third quarter ended Oct. 28. Direct-to-consumer net sales declined 0.5%, making up 45.3% of total sales. The retailer also noted an increase in return rates due to customers becoming more discerning with discretionary spending.

Joann Inc. (No. 308)

Net sales at Joann declined 4.1% to $539.8 million in its fiscal third quarter ended Oct. 28. Online sales grew 11.5%, accounting for 13.1% of total sales.

“Our ecommerce performance was particularly strong, with double-digit quarter growth as we delivered a better and faster consumer experience and benefitted from site enhancements driving increased conversion,” CEO Chris DiTullio said in a written statement.

The crafts retailer is growing an Ohio fulfillment center with hopes of lowering fulfillment costs.

Kirkland’s Inc. (No. 519)

Kirkland reported net sales declined 9.2% to $116.4 million in its fiscal third quarter ended Oct. 28. Online sales declined 8.5%, driven by decreases in average ticket and traffic. Declines were partially offset by an increase in conversion, the home decor retailer said. Furniture and wall decor sales flagged in the quarter, while early Christmas sales were strong, Kirkland said.

Land’s End (No. 79)

Net revenue at Land’s End declined 12.5% to $324.7 million in its fiscal third quarter ended Oct. 27. Ecommerce net revenue declined 13.2% to $249.2 million, or 9.7% excluding Land’s End Japan, which closed at the end of fiscal 2022. Despite overall declines, almost every women’s category grew sales double digits online in Q3, Land’s End said.

U.S. ecommerce gross profit grew 7% due to reduced promotions and better inventory management, the retailer said.

Petco Health and Wellness Company, Inc. (No. 92)

Petco comparable sales remained flat year over year in its fiscal third quarter ended Oct. 28. Revenue from consumables and services grew 1.8% and 15.0%, respectively. That was offset by an 8.8% decline in the companion animal business, leading to a 0.5% decline in net revenue to $1.49 billion.

The pet retailer recorded revenue growth in its digital business, it said without sharing specifics. BOPIS (buy online, pick up in store) and same-day delivery both grew in the quarter, Petco said.

Rent the Runway Inc. (No. 311)

Rent the Runway recorded a 6.3% decrease in net sales in its fiscal third quarter ended Oct. 31. Average active subscribers grew 4% to 134,646 over the year-ago period, while total subscribers remained flat.

Rent the Runway is expected to resume growing as it addresses a lack of inventory preferred by its members, CEO Jennifer Hyman said. Net loss in the quarter was $31.5 million, with plans to break even in 2024, Hyman says.

Stitch Fix Inc. (No. 42)

Stitch Fix reported net revenue declined 18% to $364.8 million in its fiscal first quarter of 2024 ended Oct. 28. The online styling service said net active membership declined 15% year over year, and net revenue per active client decreased 6%. Stitch Fix is also implementing generative AI in stylist notes to clients, and scaling its AI buying tool with plans to be used in 50% of orders by the end of fiscal 2024.

Target Corp. (No. 5)

Read more about Target’s earnings here.

Ulta Beauty Inc. (No. 46)

Ulta recorded a net sales increase of 6.4% to $2.5 billion in its fiscal third quarter ended Oct. 28. Comparable sales, including ecommerce, grew 4.5%, driven by 10% growth in online sales.

Ulta noted a 5.9% increase in transactions and 1.4% decrease in average ticket. The beauty retailer expects the online business to grow faster than its brick-and-mortar stores in 2024.

Victoria’s Secret & Co. (No. 52)

Victoria’s Secret net sales declined 4.0% to $1.3 billion in its fiscal third quarter ended Oct. 28. Online sales made up 35% of revenue in the quarter, up from 30% in the year-ago period.

Average basket size and conversion online both grew. Growing the online business further is the top priority going forward, CEO Martin Waters told investors.

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.

Zumiez Inc. (No. 453)

Zumiez net sales declined 8.9% to $216.3 million in its fiscal third quarter ended Oct. 28. That was a result of fewer transactions, but an increase in transaction size, Zumiez says. The footwear retailer did not share specific online sales data, but digital results were “just a little bit better than our overall result,” Chris Work, chief financial officer, told investors.

So what does it mean?

Unseasonably warm weather was a challenge for retailers with specialized products. Academy Sports & Outdoors and Designer Brands executives both mentioned the impact of warm weather cutting into anticipated sales of winter gear.
Selling discounted products isn’t enough to stand out in a competitive retail environment with increasingly choosy customers. Dollar General still managed to grow sales, although at a reduced pace from the previous quarter. Big Lots sales remain down year over year.

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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How PartsSource is expanding its horizons

Paul Demery — Mon, 20 Nov 2023 22:33:54 +0000

When a hospital’s medical staff faces postponing a patient’s treatment because of equipment downtime, their void points to the premise on which medical products marketplace company PartsSource Inc. was founded in 2001 – “ensuring that health care is always on.”

A lot of customers are integrating their ERP or their maintenance management systems to PartsSource to really accelerate the purchasing process.

Mike Zamis, chief product officer

PartsSource Inc.

Mike Zamis, chief product officer, PartsSource Inc.

“That’s our tagline, and it works well for our business,” says Mike Zamis, the company’s chief product officer. The company specializes in finding and obtaining critical medical equipment and parts using an “evidenced-based” system of using marketplace data to match each healthcare facility client’s needs with the right equipment.

By using such data as known product quality and performance and supplier reliability, PartsSource says it helps more than 5,000 hospitals and over 15,000 clinical sites “achieve maximum savings and efficiencies” with over 4 million products and services from over 6,000 original equipment manufacturers and suppliers.

PartsSource’s medical products range from oxygen sensors priced at about $100 to hospital beds and medical imaging systems listed at thousands of dollars.

Zamis, who joined PartsSource four months ago and is a veteran of software-as-a-service technology for various types of business management applications, says PartsSource is looking to expand its growth strategy beyond its traditional core market.

“We are branching out from our core and moving into other elements that are naturally adjacent to what we do,” Zamis says. He mentions laboratories and life sciences as natural market extensions. Moreover, the company is pushing into non-medical products that all types of facilities as well as hospitals and health clinics use to maintain their operations.

More products, quicker purchasing process

In 2021, PartsSource added to its inventory over 1 million non-medical, facility-management products and now features items ranging from mops and hand-held power drill sets to safety vests used in disaster management.

As customers search for products, PartsSource monitors online purchasing activity and works with its suppliers to increase availability of any items in short supply.

It also works with customers to expedite the purchasing process.

“One of the best examples is a lot of customers are integrating their ERP or their maintenance management systems to PartsSource to really accelerate the purchasing process,” Zamis says, adding, “We’ve seen 95% decreases in the time it takes to process an order, literally going from 89 minutes to four minutes. You can punch out from your ERP and procurement software, go to PartSource.com, search, find and buy — and you’re done; you can move onto the next job.”

PartsSource.com lets buyers search for products by such criteria as category, original equipment manufacturers (OEMs) and models.

PartsSource uses the information it compiles and analyzes on product sales, usage and quality records to recommend particular products depending on a customer’s needs. The result, Zamis says: “We’ve seen a six-times increase in quality, in terms of the parts they buy.”

PartsSource also provides through it PartsSource Pro program a digital operations dashboard that lets clinical engineering teams better plan their operations by viewing such information as product order status, shipping information and the on-time delivery rates of individual vendors.

A growth area: selling services

PartsSource, a portfolio company of private equity firm Bain Capital, is also forging into services to complement its core business of supplying medical equipment and parts.

An equipment repair reservices program PartsSource launched in 2021 includes same-day or next-day repair and preventive maintenance for imaging equipment, such as X-Ray and CT scan machines, and biomedical products such as patient-monitoring and respiratory equipment. It also provides access to ongoing technical support for large equipment installation projects.

PartsSource expanded its services market significantly last year with the launch of its service contract management program, which helps hospitals and their clinical engineering teams manage equipment service contracts to keep their facilities and operating rooms stocked with properly functioning medical equipment.

“It is a big area of growth for us,” Zamis says.

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

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