Mass Merchant | Digital Commerce 360 https://www.digitalcommerce360.com/topic/mass-merchant/ Your source for ecommerce news, analysis and research Thu, 15 Feb 2024 22:30:57 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.digitalcommerce360.com/wp-content/uploads/2022/10/cropped-2022-DC360-favicon-d-32x32.png Mass Merchant | Digital Commerce 360 https://www.digitalcommerce360.com/topic/mass-merchant/ 32 32 Mexican antitrust commission: Amazon, Mercado Libre hinder effective competition https://www.digitalcommerce360.com/2024/02/15/mexican-antitrust-commission-report-amazon-mercado-libre-effective-competition/ Thu, 15 Feb 2024 21:48:25 +0000 https://www.digitalcommerce360.com/?p=1317509 Amazon and Mercardo Libre both face regulatory scrutiny, following the release of new findings in Mexico. A report from the Federal Economic Competition Commission (COFECE) — an agency in the Mexican government responsible for regulating anti-competitive behavior — found that Amazon and Mercado Libre control too much of the ecommerce market’s sales and transactions in […]

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Amazon and Mercardo Libre both face regulatory scrutiny, following the release of new findings in Mexico.

A report from the Federal Economic Competition Commission (COFECE) — an agency in the Mexican government responsible for regulating anti-competitive behavior — found that Amazon and Mercado Libre control too much of the ecommerce market’s sales and transactions in the country, impeding new merchants from successfully entering the market.

Amazon and Mercado Libre are the largest online marketplaces in Mexico. Together, the report says, they control more than 85% of online marketplace sales and transactions in the country.

“We are aware of this preliminary report and are closely collaborating with COFECE,” Amazon said in a statement.

Mercado Libre issued a statement saying it was analyzing COFECE’s preliminary report, which the marketplace described as the start of the process. It also pledged its cooperation.

Amazon.com Inc. is No. 3 in the Global Marketplaces Database. MercadoLibre Inc. is No. 8. The Digital Commerce 360’s database ranks the largest online marketplaces around the world based on third-party gross merchandise value (GMV).

Amazon, Mercado Libre investigated in antitrust report

“There are no conditions of effective competition in the marketplace service market for sellers,” according to a translation of the preliminary opinion in the COFECE antitrust report. The report cites an investigation the commission held from March 31, 2023, to Oct. 27, 2023.

The report found that in Mexico, Amazon and Mercado Libre also:

  • Have the ability to set prices
  • Create barriers to entry into the market
  • Exert significant competitive pressure over smaller competitors

It says although there are some competitors in the market, most of them are much smaller in size compared to Amazon and Mercado Libre. As such, the smaller competitors’ ability to exert competitive pressure is not significant, the regulator asserted. Additionally, it states that Amazon and Mercado Libre are the only competitors that have systems for collecting and processing large volumes of data. Those systems allow the companies to offer sellers various tools within their platforms. The tools then incentivize sellers to remain on the marketplaces. That ensures a sufficient number of users to generate and maintain industry effects, according to the report.

COFECE report proposes corrective measures

Among the barriers to competition cited, COFECE identified that Amazon and Mercado Libre artificially influence buyer behavior by offering streaming services in their loyalty programs. As a corrective measure, COFECE proposes the marketplaces dissociate streaming services from their memberships and loyalty programs.

Another barrier to competition is the lack of transparency in offer management. It asserts that Amazon and Mercado Libre’s marketplaces use algorithms to manage offers. The regulator is concerned that a lack of transparency in that process could undermine efficient market functioning.

“COFECE also orders Amazon and Mercado Libre to take all necessary and sufficient actions to ensure that sellers can find comprehensive information about the variables and weighting factors they consider in selecting the featured offer,” according to a Mexico Business News report on the COFECE findings and corrective measures.

Also at issue is the idea that a preference for proprietary logistics solutions creates a third obstacle for market competitors.

“Amazon and Mercado Libre give preferential treatment to products from sellers who use their fulfillment services,” the report said, according to Mexico Business News.

“A seller would be unable to hire a single company that offers fulfillment in a comprehensive manner, and from there participate in various sales channels,” the report said.

As a solution, COFECE proposes that the marketplaces modify the criteria for the “Prime” and “Full” labels on products eligible for delivery using the marketplaces’ fulfillment networks. It suggests modifying the criteria so the labels are not exclusively or preferentially assigned to sellers who use the marketplaces’ fulfillment services.

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Hy-Vee will offer same-day delivery with Instacart https://www.digitalcommerce360.com/2024/02/14/hy-vee-will-offer-same-day-delivery-with-instacart/ Wed, 14 Feb 2024 14:20:35 +0000 https://www.digitalcommerce360.com/?p=1317342 Hy-Vee will partner with Instacart on same-day delivery, the retailer announced Feb. 8. The grocery chain will use Instacart’s fulfillment-as-a-service (FaaS) capability across its ecommerce channels, including Hy-Vee.com, WholeLotta.com, HyveeDeals.com, ShopPetShip.com and the Hy-Vee app. The relationship with Instacart will allow Hy-Vee to expand its delivery capacity to meet growing demand, it said. Hy-Vee will […]

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Hy-Vee will partner with Instacart on same-day delivery, the retailer announced Feb. 8. The grocery chain will use Instacart’s fulfillment-as-a-service (FaaS) capability across its ecommerce channels, including Hy-Vee.com, WholeLotta.com, HyveeDeals.com, ShopPetShip.com and the Hy-Vee app. The relationship with Instacart will allow Hy-Vee to expand its delivery capacity to meet growing demand, it said.

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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Online grocery sales grow in January to start the year https://www.digitalcommerce360.com/2024/02/12/online-grocery-sales-january-positive-note/ Mon, 12 Feb 2024 22:30:26 +0000 https://www.digitalcommerce360.com/?p=1317257 Online grocery sales grew 2% year over year in January, but 2024 still began with mixed results, according to data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey. Survey data showed that the number of households that bought groceries online grew. However, there was a downward year-over-year trend in order frequency and […]

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Online grocery sales grew 2% year over year in January, but 2024 still began with mixed results, according to data from the monthly Brick Meets Click and Mercatus Grocery Shopping Survey.

Survey data showed that the number of households that bought groceries online grew. However, there was a downward year-over-year trend in order frequency and average order value (AOV), Brick Meets Clicks and Mercatus reported.

They conducted the survey at the end of January 2024 with 1,745 respondents who shop for groceries online. Results compare with those from a January 2023 survey of 1,735 online grocery shoppers.

January online grocery sales in the US

Brick Meets Click and Mercatus define the three receiving methods for online grocery sales as:

  • Delivery: Includes orders received from a first- or third-party provider like Instacart, Shipt or the retailer’s own employees.
  • Pickup: Includes orders received by customers either inside or outside a store or at a designated location/locker.
  • Ship-to-home: Includes orders that are received via common or contract carriers like FedEx, UPS, USPS, etc.

Ship-to-home online grocery sales grew 7.8% year over year to reach $1.5 billion in January. That makes it the only segment of the three to grow year over year, as delivery remained flat at $3 billion and pickup declined 1.9% to $4.0 billion. Ship-to-home also saw a larger order volume in January 2024 as well as a 7% AOV increase.

Still, pickup had the most sales of the three categories, finishing the month with nearly half (47.4%) of online grocery sales. Meanwhile, the 3% growth in AOV for online grocery sales opting for delivery did not offset the larger decline in order volume, Brick Meets Click said.

“When more than 10% of U.S. households have less money to spend on groceries this year than they did last year, changes in buying behavior are certainly expected,” said David Bishop, partner at Brick Meets Click. “The reduction in SNAP payments that took effect at the end of February 2023 is one of the factors driving the flight-to-value trend which we’ve observed and tracked since mid-2023.”

Amazon, Walmart and the online grocery sales arena

Walmart and other mass merchants continued to outperform the broader online grocery sales market, Brick Meets Click said. Mass merchants expanded their bass of monthly active users by almost 10%, according to Brick Meets Click data. They also grew AOV in January, helping to compensate for flat year-over-year order frequency.

At the same time, the number of monthly active users at supermarkets declined more than 5%, and the average number of orders fell at a larger rate, Brick Meets Click said without specifying that rate.

Amazon accounts for the largest share of ship-to-home online grocery sales, Brick Meets Click said. The retailer’s sales improved compared to 2023, “but those improvements need to be put into context,” Brick Meets Click added.

Amazon had lost a “large” number of monthly active users in January 2023, making the growth in January 2024 “driven partially by easier comparable results,” Brick Meets Click said.

“Overall, Amazon’s year-over-year MAU gains more than offset the drop in order frequency, and moderate AOV gains also helped drive its positive sales results,” Brick Meets Click said.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Walmart ranks No. 2.

“Competing online is only getting more challenging for regional grocers as customer expectations continue to increase,” said Mark Fairhurst, global chief growth officer at Mercatus. “So, beyond improving key elements of the experience, like fill rates, wait times, and product quality, regional grocers also need to work even harder to identify additional ways to help their customers save money.”

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Why Temu spends millions on Super Bowl commercials https://www.digitalcommerce360.com/2024/02/12/why-temu-spends-millions-on-super-bowl-commercials/ Mon, 12 Feb 2024 21:52:56 +0000 https://www.digitalcommerce360.com/?p=1317240 Growing ecommerce app Temu spent big on Super Bowl commercials this year.  The Chinese app bought air time for three commercials during the game and two after. Super Bowl advertising is some of the most expensive of the year. For Super Bowl LVIII, advertisers paid between $6.5 million and $7 million for a 30-second commercial, […]

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Growing ecommerce app Temu spent big on Super Bowl commercials this year. 

The Chinese app bought air time for three commercials during the game and two after. Super Bowl advertising is some of the most expensive of the year. For Super Bowl LVIII, advertisers paid between $6.5 million and $7 million for a 30-second commercial, CNN reported. Individual rates vary, however, depending on when an ad airs during the game and if an individual advertiser purchases multiple commercial spots. A Temu spokesperson declined to comment on how much the retailer spent.

Temu’s Super Bowl commercial featured the tagline “Shop like a billionaire.” In it, the animated protagonist buys a variety of household and apparel products priced under $10. The purchases are a sampling of the low-cost products Temu has become known for. The retailer also partnered with San Francisco 49ers running back Christian McCaffrey to promote $5 million in coupons and credits on Instagram ahead of the game, and an additional $10 million during the game, the spokesperson said.

Pinduoduo owns Temu, which launched in 2022 and isn’t yet reflected in Digital Commerce 360 rankings of the largest online retailers. Pinduoduo operates an app-only marketplace for Chinese consumers. Because it doesn’t operate an ecommerce website, it is not included in Digital Commerce 360’s Asia Database.

Rise of Temu and its Super Bowl ad buys

Temu first gained the spotlight one year ago during the Super Bowl in 2023. 

Last year, the retailer bought two Super Bowl commercials, its first introduction to many U.S. consumers. PDD had launched Temu just a few months earlier, in September 2022.

“Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” PDD said in a statement at the time.

That strategy seems to be working. Temu was the most downloaded app in the U.S. in 2023, and the eighth-most downloaded app in the world, according to analytics firm Sensor Tower. The retailer reached 51 million monthly active users in January, a nearly 300% year-over-year increase.

In May, Temu surpassed rival Shein’s monthly U.S. sales for the first time. In September, a report from Earnest Analytics found that Temu is taking market share from Dollar General and Dollar Tree. Temu is now the No. 4 most-visited retail website in the U.S., behind only Amazon, Walmart, and eBay, The Wall Street Journal reported based on Insider Intelligence research.

Shein Group Ltd. is No. 36 in the Asia Database. Dollar General ranks No. 725 in the 2023 Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. Amazon ranks No. 1, and Walmart ranks No. 2.

Temu’s ad strategy

Temu is spending heavily on advertising, prioritizing customer acquisition. The retailer outspent all advertisers except Amazon on Facebook in Q4 of 2023, Sensor Tower said. Temu grew its ad spending on Facebook 318%, and spending on Instagram grew 101%  year over year in the quarter, the firm said. 

J.P. Morgan estimates Temu will spend $3 billion on marketing in 2024.

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Ecommerce earnings recap: What you missed from Amazon, Tractor Supply and more https://www.digitalcommerce360.com/2024/02/02/ecommerce-earnings-recap-what-you-missed-from-amazon-tractor-supply-and-more/ Fri, 02 Feb 2024 20:58:25 +0000 https://www.digitalcommerce360.com/?p=1316677 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 […]

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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)

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.

Read more on Costco’s earnings here.

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.

Read more about UPS’ earnings here.

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.

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:

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Wellness category at Target expands with online portal and 1,000 new products https://www.digitalcommerce360.com/2024/01/25/target-wellness-category-expands-online-portal-1000-new-products/ Thu, 25 Jan 2024 16:48:53 +0000 https://www.digitalcommerce360.com/?p=1316216 Target announced Wednesday that it would add 1,000 new products in its wellness category, both in stores and online. The new push included a portal on its website and celebrity-backed brands such as Gwyneth Paltrow’s Goop, Kourtney Kardashian Barker’s Lemme and Ashley Tisdale’s Being Frenshe. Target’s wellness push Many of the products, which encompass beauty, […]

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Target announced Wednesday that it would add 1,000 new products in its wellness category, both in stores and online. The new push included a portal on its website and celebrity-backed brands such as Gwyneth Paltrow’s Goop, Kourtney Kardashian Barker’s Lemme and Ashley Tisdale’s Being Frenshe.

Target’s wellness push

Many of the products, which encompass beauty, exercise, self-care, supplements and other offerings, appear aimed at price-conscious consumers. The retailer emphasizes lifestyle aspirations and cost, with listings starting at $1.99.

Target is No. 5 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales. Goop is No. 157.

Part of Target portfolio now overseen by Rick Gomez

“Wellness has been redefined to encompass a more holistic way of living — and it’s also different for every person,” said Rick Gomez, who was recently named executive vice president and chief food, essentials and beauty officer at Target. “That’s why Target is delivering like no other retailer, offering guests the ultimate destination to support their wellness journey, whether that’s enjoying a non-alcoholic beverage from Sechey or stocking up on Bloom to get their daily greens.”

Gomez’s role expanded from his previous set of duties as chief food and beverage officer.

Target expects “hundreds” of the products included in the curated category to be exclusives for its stores and website. Brand examples cited include Ghia, Good & Gather, Being Frenshe, Blogilates, Seche and All in Motion.

Broad scope of products

Online, the wellness-themed portal shows apparel, meal planning and wearable tech. The portal leverages the wellness theme to promote products outside the core focus and at higher price points. These range from pet food and household cleaning products to Stanley Tumblers and Apple Watches.

Christina Hennington, Target’s chief growth officer, touted the beauty category as a leader for the retailer in its Q3 2023 earnings report.

In its wellness focus, Target is taking an expansive view of beauty as well.

“It is a lot more than just applying skin care. It’s how someone gets their best sleep and what tools they need to help facilitate that,” Target’s senior vice president of beauty and essentials Cassandra Jones told Glossy. “We’re also seeing our ‘nutrition and supplementation’ category continuing to grow.”

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Target names new chief operating officer https://www.digitalcommerce360.com/2024/01/19/target-names-new-chief-operating-officer/ Fri, 19 Jan 2024 17:40:21 +0000 https://www.digitalcommerce360.com/?p=1315858 Target announced the name of its new chief operating officer on Thursday. Michael Fiddelke will fill the role, as his predecessor John Mulligan retires. Mulligan, in the meantime, will take on a new advisory role at the retailer. Fiddelke has served as chief financial officer at Target since 2019. He will take over the chief […]

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Target announced the name of its new chief operating officer on Thursday. Michael Fiddelke will fill the role, as his predecessor John Mulligan retires. Mulligan, in the meantime, will take on a new advisory role at the retailer.

Fiddelke has served as chief financial officer at Target since 2019. He will take over the chief operating officer duties as of Feb. 4. He will also be responsible for his current duties until a replacement can be named, according to the company.

Target is No. 5 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.

Fiddelke’s new role as Target’s chief operating officer

“With his 20 years with the company, spanning roles across our business and most recently as our chief financial officer, Michael brings a diverse set of experiences and an end-to-end view of our business that will benefit Target and our continued growth well into the future,” said Brian Cornell, chair and CEO of Target, in a released statement. “I look forward to working alongside him as our new chief operating officer and appreciate his ongoing commitment as chief financial officer until his successor is named.”

The new role marks the latest step up in a two-decade career at the Minneapolis, Minnesota-based company for Fiddelke. The former Deloitte consultant is a graduate of Northwestern University’s Kellogg School of Management and first joined Target in 2003.

Fiddelke’s previous positions at Target

“I started with Target as an intern 20 years ago, and right away I knew I was joining a special company,” Fiddelke said. “With each position I’ve held across the organization, my appreciation for Target and the role we play in guests’ lives has only grown.”

The move follows time working in finance, merchandising, human resources and store operations. Fiddelke’s new portfolio of responsibilities will include oversite of Target’s 2,000 stores, global supply chain network, fulfillment services, network capacity planning, and enterprise operations, according to a press release.

“Operations are at the heart of how we serve our guests, and I’m looking forward to spending even more time with our team members in the field as we build for the future,” he stated.

Other leadership changes at Target

Target’s announcement also mentioned three additional high-level changes. Don Liu, the company’s chief legal and compliance officer, will retire after a successor can be identified. Liu, who first joined Target in 2016, will — like Mulligan — transition into a strategic advisory role.

In Target’s merchandising operations, Rick Gomez, who has been working as chief food and beverage officer at the retailer, will become chief food, essentials and beauty officer. Meanwhile, Jill Sando, who was already serving as chief merchandising officer, will transition to chief merchandising officer of apparel and accessories, home and hardlines. Both will continue to report directly to Target chief growth officer Christina Hennington in their new capacities.

The beauty category was a leader for Target, Hennington detailed, in Target’s most recent earnings report. Target’s overall online sales declined in that quarter, but Cornell stated that those shifts were in line with expectations. He cited “pressures like higher interest rates, the resumption of student loan repayments, increased credit card debt and reduced savings rates” as factors that were putting downward pressure on discretionary income for consumers.

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NRF Big Show recap: Day 2 https://www.digitalcommerce360.com/2024/01/15/nrf-big-show-recap-day-2/ Mon, 15 Jan 2024 22:15:40 +0000 https://www.digitalcommerce360.com/?p=1315624 The National Retail Federation (NRF) gave retailers, technology companies, and others in the industry a second day of panels on Monday, covering the most important topics in the sector today. Day two of NRF’s Big Show included dozens of panels on marketing, technology, diversity and the state of the economy.  Digital Commerce 360 was on […]

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The National Retail Federation (NRF) gave retailers, technology companies, and others in the industry a second day of panels on Monday, covering the most important topics in the sector today. Day two of NRF’s Big Show included dozens of panels on marketing, technology, diversity and the state of the economy. 

Digital Commerce 360 was on the floor at the Javits Center in New York City to follow these and other important ecommerce topics, as well as the retail leaders discussing them.

Here’s what you need to know from NRF day two:

Magic Johnson started the day

Earvin “Magic” Johnson kicked off the day in conversation with Walmart U.S. CEO John Furner. Johnson is chairman and CEO of Magic Johnson Industries. He discussed the applications of lessons he learned as a star basketball player to his more recent work as an entrepreneur.

Johnson referred to the date as Martin Luther King Jr. Day. He credited Dr. King’s work in paving the way for him to be at NRF today and at the helm of his business.

The rise of retail media networks

Retailers are looking for options as they seek to leverage resources for additional revenue. Retail media networks have emerged as one such area of focus. Retail media networks at large will pursue some version of Amazon’s flywheel with media, advertisements and commerce, said Andrew Lipsman, principal analyst of retail and ecommerce at Insider Intelligence.

The greatest opportunity for retail media networks is in stores, he said. In-store attribution of sales to those ads is lacking, but that’s a place retailers can improve.

“Physical retail is the new TV” for advertisers in terms of scale, brand safety and reaching the right audience, Lipsman said. 

Walmart has a wider reach than the largest TV network, said Ryan Mayward, senior vice president of retail media sales at Walmart Connect. He explained that retailers are increasingly allocating their marketing budgets to in-store uses. Walmart is experimenting with new ways to advertise in stores, including on TV screens in the electronics section, on screens in the deli and bakery sections, and on self-checkout screens. 

Jonathan Lustig, head of revenue at Walgreens Advertising Group, echoed the point. With retail media networks, “every Walgreens store becomes a distribution center,” he said. 

Walmart ranks No. 2 in the 2023 Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. Walgreens ranks No. 19.

Expectations for 2024

The state of the economy in 2024 was a consistent topic of conversation, too. Jack Kleinhenz, chief economist at the NRF, described his opinion as “guarded optimism” on the economy this year. While there might be a shift down in growth from last year, there won’t be negative growth in 2024, he expects. However, a single negative quarter is possible, in his view.

Economists and analysts present said they were optimistic about consumer spending and consumer sentiment. Consumers remained resilient in the face of what could have been significant headwinds last year, said Brian Nagel, senior research analyst at Oppenheimer and Company. That resulted in a better-than-expected holiday season, he said. Kleinhenz also expects consumer spending through 2024 will continue to be supported by job growth.

Nevertheless, retailers and analysts are keeping potential threats in mind. The economy is definitely not in the clear, Nagel said. Earlier in the day, Furner mentioned inflation, interest rates, geopolitical strife, and crime as issues that keep retailers worrying. 

Steve Liesman, CNBC senior economics reporter, told NRF attendees that the economy is most likely going to be okay and not face a recession in the near term. He believes the U.S. and global economies are still correcting post-COVID.

Here’s what you missed from NRF Day 1.

See the other NRF stories Digital Commerce 360 is following here. 

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Walmart announces AI applications and drone delivery at CES https://www.digitalcommerce360.com/2024/01/10/walmart-announces-ai-applications-drone-delivery-at-ces/ Wed, 10 Jan 2024 17:50:52 +0000 https://www.digitalcommerce360.com/?p=1315322 Walmart CEO Doug McMillon gave the keynote speech on the first day of the Consumer Electronic Show (CES) in Las Vegas. CES expected 130,000 attendees and 4,000 exhibitors to attend this year’s four-day event, based on pre-show registration. Those numbers include retailers, technology vendors, journalists and others gathered to discuss the latest trends in technology.  […]

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Walmart CEO Doug McMillon gave the keynote speech on the first day of the Consumer Electronic Show (CES) in Las Vegas. CES expected 130,000 attendees and 4,000 exhibitors to attend this year’s four-day event, based on pre-show registration. Those numbers include retailers, technology vendors, journalists and others gathered to discuss the latest trends in technology. 

In the keynote, McMillon shared how Walmart will use AI to improve the Walmart and Sam’s Club apps. He described plans for a more efficient supply chain and the launch of drone delivery.

“Business leaders are standing at a fork in the road,” he said of how to approach advancing technology, particularly AI. He asked Microsoft CEO Satya Nadella how Walmart and other companies can use generative AI for societal good.

“With all new technology, one has to be mindful that you want to amplify the opportunity with it, and be mindful of unintended consequences,” Nadella said. 

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 global marketplaces by gross merchandise value.

Microsoft is one of the leaders in AI technology and is the largest shareholder of OpenAI, the company behind ChatGPT. The technology company provides a variety of services to retailers in the Top 1000, including web analytics, online advertising, and cloud services.

Walmart works with Microsoft on generative AI

Walmart released a new generative AI-powered search capability in its app, available immediately for iOS users. The retailer plans to release it to all app users by the end of the quarter.

McMillon invited Nadella on stage to share that Walmart’s app uses Microsoft’s Azure OpenAI. The new search function uses Microsoft’s large language model (LLM) alongside Walmart’s data to give consumers relevant results across product categories. McMillon gave the example of a shopper hosting a Super Bowl watch party. Rather than searching for a new TV, chicken wings, chips, and other essentials, one search would generate all of these items, he said.

The generative AI search will also take into account factors about the specific app user. A consumer’s location, search history, and other relevant information will be used to further refine their results, McMillon said. 

Walmart’s apps get AI features

The big box retailer announced several other updates to its Walmart and Sam’s Club apps on Tuesday afternoon.

“We have a digital relationship with [Sam’s Club] members,” even when they’re physically shopping in the store, said Megan Crozier, chief merchant at Sam’s Club. 

Members can skip checkout by scanning items and paying on their phones. As consumers shop, the Sam’s Club app also has an AI-powered feature to remind them of items they might have forgotten that are typically purchased with the products in their carts. Customers will no longer have to wait in line while an employee checks their receipts to confirm purchases, Crozier announced. Sam’s Club is rolling out an AI and computer vision technology that will automatically confirm purchases so consumers can walk right out of the store.

Walmart also unveiled a feature called “Shop With Friends.” App users can use AI and AR to create a model and virtually try on outfits. They can then send them to contacts in their phone and get feedback through the app.

Walmart+ customers also got an update courtesy of AI. The retailer announced InHome Replenishment, which will use AI to restock members’ essentials and deliver them directly into their refrigerators or pantries. The feature uses AI to learn what products a customer regularly repurchases and how quickly they go through it, to automatically reorder more when needed. It’s different than a subscription, Walmart says, because deliveries aren’t for a static time period. Instead, the replenishments will adjust to the user’s needs.

Walmart’s supply chain and fulfillment

Supply chain was the other key topic for Walmart speakers at CES.

“There’s never been a period of change in our supply chain like the one we’ve started,” said chief technology officer Suresh Kumar.

Walmart previously had three separate supply chains to carry non-grocery items, perishable items, and ecommerce items. Now, it is combining them into one supply chain as consumers increasingly shop across all three categories.

Now, Walmart is implementing automated machine learning into Walmart Fulfillment Centers to predict customer behavior and allocate the right products to the right locations, Kumar said. The models use dozens of types of data, including historical sales data, weather forecasts, and how an item is trending on social media. 

A more efficient supply chain allows customers to receive the products they want faster, he says. The next way Walmart will deliver these items is with drone delivery, working with Wing and Zipline. Walmart will expand drone delivery to 75% of households in the Dallas-Fort Worth metro area by the end of 2024. Drone deliveries will be Walmart’s fastest delivery option, promised in under 30 minutes and sometimes taking just 10 minutes, Walmart says. About three-quarters of items in a Walmart store meet the delivery requirements for drones, which can deliver in a 10-mile radius.

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Amazon FTC case trial date will be in 2026 (or later) https://www.digitalcommerce360.com/2023/12/21/amazon-ftc-case-trial-date-will-be-in-2026-or-later/ Thu, 21 Dec 2023 16:49:45 +0000 https://www.digitalcommerce360.com/?p=1314547 Despite the Federal Trade Commission’s determination, an Amazon FTC case trial date will be unlikely before 2026. Those details and more appeared in a joint status report filed Dec. 15. The two parties in the antitrust case at least agreed on the year that they could be prepared to argue in court. However, Amazon indicated […]

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Despite the Federal Trade Commission’s determination, an Amazon FTC case trial date will be unlikely before 2026. Those details and more appeared in a joint status report filed Dec. 15.

The two parties in the antitrust case at least agreed on the year that they could be prepared to argue in court. However, Amazon indicated that it would need more time than the government requested to be fully ready. Assuming that the case goes to trial at all, the FTC and 17 state attorneys general want to begin in May 2026. Meanwhile, Amazon has asserted that it will not be prepared until December of that year.

FTC and attorneys general push for May start

“Plaintiffs’ proposed schedule would allow the Court to set this case for trial starting in May 2026, which balances the strong public interest in the speedy resolution of this case with sufficient time for the parties to conduct fact discovery, exchange expert reports and take expert depositions, brief dispositive and Daubert motions, and prepare this case for trial,” the FTC’s side explained in the joint filing.

In regards to Amazon’s proposed timetable, the plaintiffs do not believe the company’s stated needs are realistic.

“Amazon’s inefficient proposal would be more burdensome for government plaintiffs and the Court and could unnecessarily delay the progress of this case,” the government’s side asserted.

Amazon’s motion to dismiss

Amazon’s preferred next step will be to have the case dismissed. The company filed its motion to dismiss on Dec. 8.

“Amazon competes every minute of every day with thousands of online and brick-and-mortar retailers,” the company argued in that filing. “To meet that competition, Amazon has relentlessly innovated, delivering previously unimagined benefits for consumers and pushing competitors to do likewise, all to make every penny of a consumer’s purchase count for more.”

The company is seeking a dismissal of the case on multiple grounds. Among the reasons, it assesses that its stated benefits to consumers mean it should not be the target of antitrust action.

“Amazon promptly matches rivals’ discounts, features competitively priced deals rather than overpriced ones, and ensures best-in-class delivery for its Prime subscribers,” the motion to dismiss claimed. “Those practices — the targets of this antitrust Complaint — benefit consumers and are the essence of competition.”

Ultimately, Amazon maintained that “[a]ntitrust law does not seek to punish economic behavior that benefits consumers.” In both the Dec. 8 and Dec. 15 filings, it referred to the FTC’s interpretation of antitrust law as “novel.”

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest online retailers in North America. In addition, it is No. 3 in the Global Online Marketplaces Database.

Disagreement over the timeline

“If this case is not dismissed, Amazon anticipates that discovery will be needed regarding all of Plaintiffs’ claims and all of Amazon’s anticipated defenses,” the Seattle-based ecommerce giant wrote in its positions within the filing.

Fundamentally, Amazon maintained that a May 2026 start date would not be adequate.

“Plaintiffs’ proposed schedule does not provide sufficient time for discovery and pretrial proceedings given the extensive discovery that Plaintiffs claim they should be entitled to take,” Amazon’s position stated in the Dec. 15 filing.

Additionally, Amazon contested multiple FTC-side proposals, among them the number of hours needed for depositions, which the company called “one-sided and prejudicial to Amazon.”

“Plaintiffs propose that each side be allowed to take 630 hours of party depositions,” Amazon summarized. “That is the equivalent of 90 seven-hour depositions of Amazon.”

In practice, that requirement would be “contrary to the Federal Rules” and “unduly burdensome in light of the voluminous discovery available to Plaintiffs,” according to Amazon.

The case is assigned to U.S. District Judge John H. Chun in the U.S. District Court for the Western District of Washington.

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