The robots will run on artificial intelligence (AI)-powered software, also provided by RightHand.

Staples ranks No. 14 in the Top 1000. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Staples robots deployed for picking

RightHand Robotics RightPick system in use at a Staples fulfillment center. (Image credit: RightHand Robotics)

“We have always valued automation, and we see it as the future of ecommerce picking,” said Amit Kalra, chief supply chain officer at Staples, in a released statement. “After evaluating other solutions, the RightPick system met our high performance and reliability standards, picking items with different shapes, packaging, sizes, and weight.”

In a video explaining fulfillment center priorities more broadly, a Staples representative describes the modernized workflow as follows: “Once a customer order is received, our software determines the best way to get the order through the system — a partnership of the robotics and workers. These automated systems handle the manual work while workers review every customer order for quality assurance.”

Subsequently, orders are carried to shipping areas to go out to customers. In the resulting process, the company spokesperson says that “Staples technology combined with our exceptional warehouse team is the future of logistics.”

How RightHand’s robots work

RightHand Robotics RightPick robot in operation. (Image credit: RightHand Robotics)

“Our RightPick system sets a new standard in the flexibility, autonomy, and reliability of warehouse robotics,” Brian Owen, CEO of RightHand Robotics said in the companies’ press release. “We’re thrilled that Staples recognized the benefits of using our technology to further enhance their automation strategy. It’s great to team up with an established industry leader to optimize their fulfillment operations.”

The RightPick system includes hardware, sensors and software designed to prevent damage during the picking process.  In addition, RightPick indicates that they ensure certain performance and safety standards. According to the two companies, RightHand Robotics “nearly doubled the range of items” that its stations can accommodate, bringing the number of necessary human interventions down by 80% since the work with Staples began.

Ultimately, Staples hopes to leverage the technology to enable next-day delivery to “over 98% of the U.S.”

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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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Office supplies retailer Staples was the victim of a data breach after Thanksgiving. Ancestry-testing company 23andMe confirmed on Dec. 4 that an outside source accessed customer data. Dental products distributor Henry Schein suffered a data breach days before Thanksgiving, as well as one in October.

Staples Inc. is No. 14 in the Top 1000. The database reflects Digital Commerce 360’s rankings of the largest North American online retailers based on their web sales. 23andMe Inc. ranks No. 317.

How do the cyber attacks compare and differ?

The incidents are not all the same, though, according to Jon Marler, cyber evangelist at VikingCloud, a cybersecurity and compliance company. Marler and his team develop solutions for clients to deal with evolving cyber threats.

The 23andMe incident was not a data breach in the traditional sense, he said, based on publicly available information. According to the company’s statements, the culprit (or culprits) stole customer data, but they did so by exfiltrating via credential stuffing, Marler said.

“What that means is that there was a very large group of customers using the same password for multiple websites,” Marler said. “This is a very well-known security problem that has gotten a lot of media attention in the past. This user practice has created a very large corpus of logins and passwords — usable on many sites — on the dark web.”

On the other hand, the Staples and Henry Schein attacks appear to have been detected internally, he said, leading the companies to initiate incident responses.

“This is what we expect to happen, and with data breach disclosure laws, we expect to hear about these hacks more often. In the past, without disclosure laws, these types of incidents would not be known externally,” Marler said.

Is the timing of the cyber attacks significant?

“We have known for a long time that cybersecurity attacks ramp up during the holidays. This is the busiest time for online retailers, and attackers know it,” Marler said.

He said attackers launching ransomware attacks that shut down online business during the peak season have a higher likelihood of getting paid. Attackers know that people take time off during the holidays, he said. That leads to less attention to cybersecurity, he added.

“Couple that with increased traffic to ecommerce sites, and you get perfect conditions for launching attacks, or initiating the encryption payload for an existing hack that has been waiting to ripen,” Marler said. “It is extremely important to maintain vigilance during busy periods when the cost of failure is exponentially greater.”

Retailers address holiday data breaches

Staples’ cybersecurity team identified a risk on Nov. 27, according to a company spokesperson.

“We took proactive steps in an effort to mitigate the impact and protect customer data,” the spokesperson told Digital Commerce 360 in an emailed statement. “Our prompt efforts caused temporary disruption to our backend processing and delivering capabilities, as well as our communications channels and customer service lines.”

The Staples spokesperson continued, saying the retailer’s fulfillment supply chain “is now fully operational.”

“We continue to process incoming orders in normal course,” the Staples spokesperson said. “Our retail locations are operating normally. We continue to experience disruption to some of our communications channels and our customer service lines. Many business applications are already working and others are expected to roll out in priority order shortly.”

Meanwhile, a 23andMe spokesperson told Digital Commerce 360 via email that a “threat actor” accessed data from about 5.5 million DNA Relatives profile files. Additionally, the culprit (or culprits) accessed the Family Tree profile information of roughly 1.4 million customers who participated in the DNA Relatives feature.

What kind of 23andMe ancestry data was accessed?

The 23andMe spokesperson said the company is in the process of notifying affected customers. It has also taken steps to further protect customer data, the spokesperson said. That includes requiring all existing customers to reset their passwords, as well as requiring two-step verification for all new and existing customers.

“Based on our investigation, we have determined that the threat actor was able to access a very small percentage (0.1%) of user accounts (~14,000) in instances where usernames and passwords that were used on the 23andMe website were the same as those used on other websites that had been previously compromised or were otherwise available,” the 23andMe spokesperson said. “Of note, we do not have any indication that there has been a breach or data security incident within our systems, or that 23andMe was the source of the account credentials used in these attacks.”

23andMe provided information on the type of data it includes in each profile.

DNA Relatives profile:

• Includes:
  • Display name.
  • How recently they logged into their account.
  • Their relationship labels.
  • Their predicted relationship.
  • Percentage DNA shared with their DNA Relatives matches.
• Also may include:
  • Their ancestry reports and matching DNA segments (specifically where on their chromosomes they and their relative had matching DNA).
  • Self-reported location (city/zip code).
  • Ancestor birth locations and family names.
  • Profile picture.
  • Birth year.
  • A weblink to a family tree they created.
  • Anything else they may have included in the “Introduce yourself” section of your profile.

Family Tree profile:

• Includes:
  • Display name.
  • Relationship labels.
• May include:
  • If the user chose to share, birth year and self-reported location (city/zip code) information.
  • The Family Tree feature does not include the percentage of DNA shared with their DNA Relatives matches, ancestry reports or matching DNA segment information.

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The world’s largest retailer by revenue announced Walmart Business in January as a new ecommerce channel primarily for small businesses and nonprofit organizations. With more than 100,000 items available across more than a dozen categories ranging from office furniture and laptops to health care and automotive products, Walmart Business is encroaching on a market dominated by such rivals as Staples Inc., Costco Wholesale Corp. and Amazon.com Inc. It also provides such B2B purchasing features as letting up to five buyers share the same account.

Amazon, Costco, Staples and Walmart each rank in the Top 500. Furthermore, they’re all among the Top 20.

Ashley Hubka, senior vice president and general manager, Walmart Business

Walmart recently upped its B2B foray with a mobile app and new tools and services designed to help small businesses and nonprofit organizations improve their procurement operations, according to Ashley Hubka, senior vice president and general manager, Walmart Business. The changes followed a May 2023 survey of 501 small business owners. They identified ordering supplies and managing customers as among their biggest challenges. Research firm Morning Consult conducted the Walmart-commissioned poll.

The Walmart Business upgrades include:

• Walmart Business App. It lets buyers access and purchase items among all product categories. And it lets them choose how to receive orders, including via scheduled delivery service or curbside pickup at more than 4,700 U.S. locations. Up to five purchasing team members can share a single account from the app.
• An upgraded add-to-cart feature, which is designed to quicken high-volume orders.
• Hire Angi. It lets customers click from the Walmart Business website or app to connect with the Angi contractor-hiring service.
• Spend Analytics. This enables Walmart Business+ members to track their organization’s spend by user and by product categories. It also allows them to identify spending patterns. Walmart Business+ is a membership program that, for a $98 annual fee, offers perks like free shipping on all orders.

More on Walmart’s online sales

Walmart doesn’t break out ecommerce sales. But for the company’s most recently reported financial period, the fiscal first quarter ended April 30, it said ecommerce sales grew 27% over the prior-year quarter. Total sales grew 7.6% to $151.0 billion.

Walmart ranks No. 2 in the Top 1000 database for online sales, behind only Amazon. We cover Walmart ecommerce sales quarterly with year-to-date earnings summaries. Check back in for updates on the page below.

Paul Demery is a freelance writer specializing in ecommerce trends. He is based in Savannah, Georgia. Follow him on Twitter @pdemery.

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Colin Sebastian, an R.W. Baird & Co. investment analyst who accurately forecasted Amazon Business’s $25 billion gross sales mark for example, has projected $80 billion in gross sales before the end of this decade.

One way Amazon Business is moving toward much higher gross sales volume, analysts say, is by expanding sales to small businesses.

There are 33 million small businesses in the United States, according to the Small Business Administration. It defines a small business as an independent business with fewer than 500 employees. Moreover, the SBA notes that 81% of U.S. small businesses — 26.5 million — are solo operators with no employees.

Enter Business Prime Duo

This week, Amazon Business reached out to solo business operators by offering them a new Business Prime deal with perks like spending analytics tools and free shipping. Called the Business Prime Duo, it lets solo business operators who already have an Amazon Prime account at an annual $139 fee for their personal consumer spending to add a Business Prime account for no extra charge – a savings of $69 per year.

Todd Heimes, director, Amazon Business Worldwide

“Small business owners are passionate about what they do — and we know that many of them do it all by themselves,” says Todd Heimes, director, Amazon Business Worldwide, adding, “From product development and marketing to procurement and finance, these small-business owners wear multiple hats each and every day.”

Business Prime Duo provides the following at no extra fees:

• One-day and two-day delivery options on tens of millions of products, and free same-day delivery on eligible items in more than 90 metropolitan areas.
• An “Amazon Day” option to schedule delivery of eligible items on the same day each week; and a consolidated shipping option on large orders to receive goods in a minimal number of packages and deliveries.
• Customer survey and analytics tools to learn more about customer preferences.
• 90-day interest-free payment terms or 5% back on purchase transactions made with the Amazon Business Prime American Express card.

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Alexandre Gagnon, vice president, Amazon Business

From 2020 to 2022, Amazon Business grew at a compound annual rate of 25%, according to Alexandre Gagnon, vice president of Amazon Business Worldwide.

To expand on that growth, Gagnon says the marketplace plans to enlarge sales of office supplies. The product category grew in recent years as the pandemic led companies to more purchasing online.

Gagnon, the top executive at Amazon Business, made his comments in an interview published today by the Reuters news service and confirmed by an Amazon Business spokeswoman.

Enhancing logistics to support B2B sales

Gagnon said Amazon Business is improving logistics operations in Europe to make it more attractive for corporate-account customers to make bulk purchases of supplies ranging from desks and IT equipment to paper and printer ink. That provides Amazon the opportunity to reap higher margins compared with small-order retail consumer sales.

“Because businesses buy in larger quantities, the fulfillment economics are more advantageous,” Gagnon told Reuters.

Amazon Business entered the European market when it opened for business in Germany in 2016, followed by Great Britain in 2017. It also operates in France, Italy and Spain. The ecommerce company deals with such corporate clients as:

• Electrical equipment manufacturer ABB
• Renewable energy technology company Siemens Gamesa
• Energy technology engineering firm Centrica Business Solutions

When asked if Amazon Business intends to enter additional markets in Europe, the spokeswoman said the company “can’t comment on future plans.”

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“We have the best program in the world,” Columbus says.

The reason for Columbus’ confidence is the retailer’s 20-minute guarantee, which it meets 98.9% of the time. That means that 20 minutes after an online shopper clicks “buy” online or in the app, the product is ready for the shopper to pick up. If not, Office Depot will give the shopper $20 off her next purchase.

“This is our differentiator, and we’re proud of it,” Columbus says.

Office Depot meets its 20-minute pickup promise 98.9% of the time.

Office Depot implemented the 20-minute guarantee in October 2021 at nearly all of its 980 stores. While shoppers were not asking for a faster pickup time than its previous one-hour guarantee, the merchant wanted to prove it could be even better, Columbus says.

“There’s a big online retailer that can’t do 20 minutes, so we can,” Columbus says.

Jamie Columbus, vice president of omnichannel at Office Depot Inc.

Plus, many small business owners may need to print out a presentation that day or have run out of ink and need more as soon as possible. They would likely be happy with the product in one hour, but 20 minutes is even better, Columbus says.

A majority of shoppers expect their online order ready for pickup in one hour or less, says Brendan Witcher, vice president, principal analyst at Forrester Research Inc. While not every retailer may need to exceed customer expectations with a 20-minute BOPIS guarantee, for Office Depot’s product category, it makes sense, he says.

According to a Digital Commerce 360 and Bizrate Insights survey of 1,132 online shoppers in March 2023, 32% selected BOPIS or curbside as their fulfillment choice because they wanted the product that day.

Office Depot makes changes to meet BOPIS guarantee

To reduce the time to 20 minutes from one hour, the merchant had to make operational changes at the stores to make its employees more efficient. Office Depot upgraded its hardware to Zebra mobile devices that run its inventory system software to alert employees in real time when they have to pick a time to fulfill a BOPIS order. Employees previously had handheld devices to complete this task, but the new system was better, Columbus says without providing specific details.

Office Depot also went through each task an employee has to conduct throughout the day and analyzed if tasks were necessary and the benefit of doing them. For example, sometimes employees have to specifically check an aisle for a high-end item and count how many are in stock. Office Depot decided to eliminate this task, as it did not provide enough value.

When it went live with the program, Office Depot did not have any increases in conversion or key performance indicators to prove that a faster pickup time was a differentiator for shoppers.

Columbus does, however, point to its in-store Net Promoter Score, at 72.5, as proof that shoppers are satisfied with the in-store pickup experience. Prior to this rollout, in July 2020, Office Depot’s NPS was 65.6. The average NPS, which is a widely used measure of online shopper satisfaction, for retailers is 35, according to Delighted LLC, a Qualtrics-owned survey platform.

Office Depot will continue to offer curbside pickup

About 27% of Office Depot’s online orders are for store pickup. Of those orders, 15% of customers choose to pick up curbside.

Office Depot quickly launched curbside at almost all of its stores during the 2020 pandemic. And even though fewer shoppers are opting for curbside than they did a few years ago, Office Depot plans to continue to offer curbside pickup.

“It has slowed down. We like the fact that it’s slowed down,” says Columbus.

That’s because with curbside pickup, shoppers are not entering stores and will not purchase additional items. This compares with in-store pickup, which brings shoppers inside. There, a percentage of them buy additional items, Columbus says without revealing that figure.

Digital Commerce 360 researchers found that Office Depot delivered on its 20-minute promise. It had the order ready for pickup four minutes after clicking buy, according to a mystery shopping test as part of the to-be-released Digital Commerce 360 Omnichannel Report.

From the 20 tested retailers, Office Depot was the fastest. Five merchants had orders ready in less than 30 minutes, and the median time it took merchants to have the order ready was 56 minutes, according to Digital Commerce 360.

Office Depot is No. 23 in the 2022 Digital Commerce 360 Top 1000.

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The initiative, called Walmart Business, is designed to offer a one-stop shop for office supplies, furniture, food and electronics, Ashley Hubka, the senior vice president managing the program, said in an interview. Walmart is also pitching a business membership plan that dangles extra savings.

The retailer started the business website — business.walmart.com — in September with little fanfare, Hubka said. Now, having honed the product assortment based on user feedback, it’s looking to ramp up growth. The website includes an assortment of more than 100,000 items for purchasers looking to buy equipment, restock supplies and feed employees. As many as five users can share a single account.

The website is tailored to the needs of companies and nonprofits, and will provide more convenience for busy purchasing managers, Walmart said in a statement Jan. 20. That will position the company to attract new corporate shoppers, Hubka said. In the case of existing customers, it can “earn a greater share of their wallet,” Hubka said.

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

Website could help Walmart take larger share of sales to businesses

Walmart is betting the venture will help it encroach on rivals such as Staples Inc., Costco Wholesale Corp. and Amazon.com Inc., which stepped up efforts to woo smaller companies during the coronavirus pandemic. Wall Street analysts predict Walmart will be a slow-growing behemoth over the long term. Finding new sources of demand is a key challenge, they say.

The Bentonville, Arkansas-based company is also offering Walmart Business+, a corporate counterpart to its Walmart+ membership program for individual consumers. The business version offers free shipping, plus 2% rewards on orders of at least $250 and savings of as much as 5% on certain items in subscription orders. Both membership programs cost $98 a year.

Another membership-based company vying for business customers is Sam’s Club, Walmart’s own warehouse-store operation. Hubka said there’s enough demand for Walmart itself to win more new business-to-business sales without cannibalizing revenue at its corporate cousin.

“This will be additive to Walmart as a whole,” she said. “We believe there’s a really large market.”

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Prentis Wilson, president, Varis

Wilson, whose extensive ecommerce background includes being the first head of Amazon Business, noted the accomplishments and growth curve at Varis since he joined it as its top executive early last year:

• It acquired BuyerQuest, a platform that provides subscription-based procurement services to large companies.
• It built a team of executives formerly with Amazon Business and other major technology-focused organizations including Microsoft, Dell and the U.S. General Services Administration.
• It integrated its procurement technology with Microsoft’s widely used Dynamics 360 enterprise resource planning system, letting Dynamics users access Varis directly through their enterprise resource planning (ERP) system.
• It has recorded 64% annual growth in volume of managed procurement spend while retaining 100% of BuyerQuest customers and gaining new customers through references.

Varis’s growth has come at a substantial cost — which led to a Q3 net operating loss of $17 million for the unit even as it recorded $2 million in revenue — but ODP executives said Varis is nearing the end of its investment phase and is expected to soon enter a long period of substantial growth.  Varis processes sales of products across multiple categories, going far  beyond ODP’s traditional market of office supplies.

Ready to turn on the revenue flywheel

Anthony Scaglione, ODP executive vice president and chief financial officer, noted on the Q3 earnings call that Varis’s $2 million in Q3 revenue was primarily from its already established BuyerQuest subscription-based accounts for large enterprise customers, according to a transcript from Seeking Alpha of the combined earnings call and investor day presentation. Going forward, he added, Varis will soon begin to grow procurement sales and services to a new broad base of companies of all sizes. “We expect that this will be the peak year of investment for Varis as we ready the platform for launch, turn on the revenue flywheel and scale the business.”

Wilson, who brought Amazon Business to more than $10 billion in annualized sales within its first six years, noted Varis’s existing customer base includes more than 21,000 locations, “including everything from manufacturing organizations to some of the world’s largest quick-serve restaurants.”

But he added that says Varis is “really excited” about providing the latest in procurement technology to small and midsized businesses.

He asserted that a lot of buyers at SMB companies “attempt to secure customer agreements or drive contract compliance, [but] it’s almost impossible because on the buy side, the technology to adhere to those contracts or to be able to direct those purchases doesn’t exist.”

“There’s a number of point solutions out there today that attempt to solve various parts of the problem,”  he added, “but nobody really integrates everything into one package.”

“That’s what Varis is doing,” Wilson said. ”We’re bringing the consumer-like super convenient buying experience that people demand and are used to in their personal lives, with a trusted network of suppliers and pre-negotiated or pre-established agreements.”

ODP projects Varis will realize a compound annual growth rate of more than 130% over the next three years to reach $120 million in revenue and become cashflow positive in 2025. In 2023, it says it will “focus on rapid deployment of marketplaces and suppliers; in 2024, it will expand payment capabilities and improve catalog and contract management, among other services.

ODP’s B2B sales grow as retail sales fall

To help Varis realize that growth, ODP said it has retained investment bankers Perella Weinberg Partners to help it identify potential strategic investors.

Varis is one of the recently realigned ODP’s four main business units. The other three are ODP Business Solutions, which offers contract sales and services to large companies; Office Depot, which includes sales to small businesses and consumers through OfficeDepot.com and physical stores; and Veyer, a supply chain and logistics services business that offers next-day delivery and other services to internal ODP units and to external customers.

For ODP’s fiscal third quarter ended Sept. 24, the company said total sales dipped by less than 1% year over year to $2.2 billion. Growth came mostly from ODP Business Solutions, where sales climbed 9% to $1.03 billion, as Varis was slack at $2 million. Sales at the Office Depot unit fell 8% to $1.13 billion. The Veyer unit’s sales, which were nearly all to internal ODP operations, fell 3% to $1.48 billion.

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