The post Consumers checking online for product availability recognized by retailers appeared first on Digital Commerce 360.

However, Costco net sales for the quarter increased to $52.60 billion. That’s up 1.9% from $51.61 billion in the prior year’s fiscal third quarter. And net sales for the first 36 weeks increased to $160.28 billion. That’s up 5.5% from $151.97 billion in the same period last year.

Chief financial officer Richard Galanti said big ticket discretionary departments decreased ecommerce sales 20%. Those included home furnishings, small electronics, jewelry and hardware, he said. Those accounted for 55% of Costco ecommerce sales.

“These same departments were down about 17% in warehouse, but they only make up 8% of in warehouse sales,” Galanti said.

Costco ranks No. 6 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Costco ecommerce sales

Galanti said Costco hired a vice president of digital transformation in the past year to improve ecommerce, including both mobile sites and applications.

“That complemented three other outside VPs we hired, one of which was in the data analytics area,” Galanti said. “And we’ve really, over the last six to nine months, began a two-year roadmap to improve and re-platform our primary ecommerce website, and the same goes for our mobile apps and mobile site.”

Omnichannel fulfillment at Costco

“In terms of the benefit of buying online and picking up in store and things like that, we frankly view that as more costly than it is beneficial,” Galanti said. “In fairness to the different retailers that feel they have to do it, many of them want to do it. But there’s a cost of doing that.”

Costco can “certainly do more online,” Galanti said.

“We don’t have some strategic goal to go from 8% — which is still a $20 billion business — but to go from 8% of sales to 16%,” Galanti said. “But let’s go from 8% to 9%, 9% to 10%, 10% to 11% over a certain period of time. And we think that with some of the things we’re doing on that side, we can.”

One such thing Costco is working to implement, according to Galanti: showing in-stock warehouse inventory online.

Costco membership growth in fiscal Q3

Galanti said Costco increased new memberships 7% year over year.

“Membership growth continues,” Galanti said.

The wholesale retailer ended its fiscal third quarter with 69.1 million paid household members and 124.7 million cardholders, both up approximately 7% versus a year ago. Also at the end of the third quarter, Costco had 31.3 million paid executive members. That’s up 681,000 — or an average of 57,000 per week — during the 12-week fiscal third quarter.

“Executive members now represent a little over 45% of our paid members and approximately 73% of worldwide sales,” Galanti said.

Meanwhile, the retailer increased its number of warehouses “just under” 3%.

For the quarter, Costco reported $1.44 billion of membership fee income. That’s 1.98% of sales compared to $984 million, or 1.91% a year ago in the third quarter, Galanti said. That represents a $60 million (6.1%) increase in membership fees, he said.

In terms of membership renewals, the United States and Canada membership renewal rate was 92.6%. Globally, that rate is 90.5%.

Costco earnings

For the fiscal third quarter ended May 7, 2023, Costco reported:

• Net sales increased to $52.60 billion. That’s up 1.9% from $51.61 billion in the prior year’s fiscal third quarter.
• Costco ecommerce sales declined 10%.
• $1.44 billion in membership fee income, comprising 1.98% of sales compared to $984 million, or 1.91% a year ago in the third quarter.

For the 36-week period ended May 7, 2023, Costco reported:

• Net sales for the first 36 weeks increased to $160.28 billion. That’s up 5.5% from $151.97 billion in the same period last year.
• Costco ecommerce sales fell 7.8%.

Check back for more earnings reports.

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

The post Costco ecommerce sales drop; net sales still increase 1.9% appeared first on Digital Commerce 360.

Multi-brand enterprises tend to run independently of one another with different tech stacks, little alignment on customer data, and information sharing.

Despite this, there’s a unique opportunity to utilize marketplace technology to create a one-stop-shop. Creating a first-party marketplace under your umbrella company can boost customer experience, increase profit, and position your organization as the market leader in your vertical.

Find out how in this guide.

Compliments of Pivotree

The post How Multi-Brand Enterprises can Boost Customer Experience With Marketplaces appeared first on Digital Commerce 360.

Ecommerce remained a bright spot for the quarter ended April 28, 2023. Total U.S. comparable sales excluding fuel for the first quarter grew more slowly, up 8.2% year over year. International results were similar, with ecommerce sales up 25% and comparable sales up 12.9%.

U.S. and international ecommerce sales growth were driven by gains in curbside pickup and delivery, Walmart said in a statement.

“We had a strong quarter. … We leveraged expenses, expanded operating margin, and grew profit ahead of sales,” CEO Doug McMillon said in a press release. “And a big thank you to our associates, who continue to step up and deliver for customers and members whenever and however they want to be served.”

Total revenue, including advertising, in-store, and online sales, was up 7.6% for the quarter. Walmart’s $152.3 billion revenue exceeded Wall Street expectations of $148.76 billion.

The big box retailer also reported net income of $1.67 billion in Q1, an 18.5% decline from $2.0 billion in Q1 the previous year.

Walmart ranks No. 2 in the Top 1000 database for online sales, behind only Amazon.

Other results

Sam’s Club, Walmart’s membership-based warehouse chain, reported ecommerce sales grew 19% in the quarter driven by curbside orders. Like Walmart overall, comparable sales excluding fuel grew more slowly than ecommerce, up 7%. Membership reached an all-time high, Walmart said.

Walmart+ continued to grow, the retailer said, with nearly 50% of new members joining through pickup and delivery services. Members shop more frequently and spend more per trip, the company said. Walmart declined to share specific figures for Walmart+.

Category results

General merchandise sales in the U.S. declined “mid-single digits” Executive vice president and chief financial officer John David Rainey told investors, declining to share a specific figure. Food and consumable sales, however, increased “low double digits.” 

Walmart once again gained market share in grocery, and it made gains with higher income and younger shoppers, Rainey said.

“Customers are being cautious with their spending in discretionary categories,” he said, even as inflation decreased during the quarter.

Walmart has higher margins on general merchandise compared with food, meaning the shift toward grocery can slow profit growth. Rainey said Walmart expects this trend to continue through the end of the year.

Unusually cool spring weather negatively impacted garden and outdoor sales, he said.

Guidance for 2023

Walmart projected higher sales for the rest of the year after beating expectations in Q1. The retailer said it expects consolidated net sales to increase 4% in Q2, with consolidated operating income down 2%.

For the full year, Walmart expects consolidated net sales to grow approximately 3.5, with operating income up 4 to 4.5%.

Rainey explained the retailer’s reasoning behind updated guidance.

“In addition to the persistence of inflation in food and consumables, customers were also impacted by a reduction of SNAP benefits and lower tax refunds,” Rainey said. “These impacts were partially offset by higher spending due to a cost of living adjustment for social security benefits.” 

Walmart Q1 2024 financial results

For the fiscal first quarter ended April 28, Walmart reported:

• Walmart U.S. ecommerce sales grew 27% year over year.
• Comparable U.S. sales grew 8.2% over the year-ago period.
• Total global revenue grew 7.6% to $152.3 billion.
• Net income declined 18.5% to $1.67 billion.

Percentage changes may not align exactly with dollar figures due to rounding.

Check back for more earnings reports.

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

The post Walmart ecommerce sales grow 27% in Q1 driven by curbside and delivery orders appeared first on Digital Commerce 360.

Matthew Solusod, CX operations manager, Aviator Nation

“This was a problem for us because it took a lot of time,” Solusod says. “It took one or more employees away [to process returns or exchanges] during a time when we had to focus on our online sales channel.”

Aviator Nation’s return rates were on the rise between 2019 and 2020. The 1970s-inspired leisure wear retailer turned to Loop Returns, a returns services vendor. Aviator Nation processed its first return with Loop Returns in April 2021. By 2022, the retailer’s return rate dropped below 12%. It also offered bonus credits (by percentage) and in-store credit incentives to help encourage sales, according to Loop Returns.

After implementing Loop, Aviator Nation’s retained customer lifetime revenue is 63% for existing customers, Solusod says.

From April 2021-2023, the average upsell per return was $11.99. For every return an Aviator Nation customer submits, Aviator Nation earns $11.99 in new revenue.

From April 2021-November 2022, refunds decreased 11% and Aviator Nation retained 56.6% of revenue from returns. The average upsell per return during this period is $10.51.

“I think that’s about a third or half of what [the refund rate] was before,” Solusod says.

Aviator Nation uses ecommerce platform Shopify to run its website. Loop Returns integrates with Shopify.

“[Employees] can be more proactive rather than reactive. They are not spending time on menial tasks like manually processing returns,” Solusod says.

For example, if an item is out of stock, Aviator Nation employees can proactively reach out to customers to let them know and present other options, he says.

Aviator Nation leverages store inventory for online orders

In late 2022, Aviator Nation launched its omnichannel fulfillment option. Aviator Nation has 17 stores throughout the U.S. in California, Colorado, Hawaii, Texas, and Tennessee.

“Now we’re able to unlock all our retail locations and inventory. It gives a lot more availability for people shopping on the website,” Solusod says. “This also means we’re churning through inventory of stores quicker. We have a lot more inventory available for people shopping on the website.”

The retailer plans to launch buy online, pick up in store (BOPIS) in 2023.

“That way, rather than having to wait for something to ship, you can just pop into a store and pick it up,” he says.

Solusod says each store’s inventory is available to fulfill online orders. Fulfilling online orders in store saves shipping costs, he says.

“If a customer near the Miami [store] location places an order, we can have Miami store fulfill that item. That saves us some cost,” Solusod says. “I think it also makes for a better experience. The customer can oftentimes get their item faster with the BOPIS option we’re rolling in.”

Aviator Nation’s mobile customers

The majority of Aviator Nation shoppers shop using their mobile devices, Solusod says. The retailer launched its own app in 2022.

“The app has been really successful,” he says. He did not share what portion of conversions come through the mobile app, but he says about 70% of online shoppers are converting through their mobile devices.

About 70% of Aviator Nation’s shoppers convert through their mobile devices. The retailer launched its own app for mobile devices in 2022.

Aviator Nation’s production and fulfillment centers are both located in California in the fashion/garment district of Los Angeles. The retailer sources its materials within the U.S.

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

The post Aviator Nation automates returns, uses stores to fulfill online orders appeared first on Digital Commerce 360.

Target sales

Q1 comparable digital sales dropped 3.4%, versus a 3.2% rise in the year-earlier period.

Target said its digitally originated sales — transactions that can be attributed to its website and apps, including online purchases and buy online, pick up in store — fell to 17.5% of total sales from 18.2% in the comparable period of 2022.

Same-day services (Order Pickup, Drive Up and Shipt) saw mid-single digit growth in the first quarter, led by high-single digit growth in Drive Up.

Net income dropped 5.8% to $950 million from $1.01 billion in Q1 2022.

Organized retail crime

In a written statement, CEO Brian Cornell said the retailer expects that shrink will slash some $500 million from Target’s profitability in 2023.

“While there are many potential sources of inventory shrink, theft and organized retail crime are increasingly important drivers of the issue,” Cornell said. “We are making significant investments in strategies to prevent this from happening in our stores and protect our guests and our team. We’re also focused on managing the financial impact on our business so we can continue to keep our stores open, knowing they create local jobs and offer convenient access to essentials.”

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

Margins and inventory

First quarter operating income margin rate was 5.2% in 2023, compared with 5.3% in Q1 2022.

A decline in an operating income margin rate is generally seen as evidence of inventory discounting. Target announced in June that it would dramatically reduce inventory by slashing prices after supply-chain woes across the retail industry led to a surge in unsold goods.

Inventory at the end of Q1 was 16% lower than the year-earlier quarter. That reflects a more than 25% reduction in discretionary categories.

Outlook

Target maintained its previous sales and profit outlook for the year.

For comparable sales in the second quarter, Minneapolis-based Target said it’s planning for a wide range of outcomes “centered around a low-single-digit decline,” according to a written statement accompanying the earnings report.

Target’s sober outlook for its fiscal second quarter, which began in late April, will do little to assuage worries about weakening U.S. consumer spending, said Adam Crisafulli, an analyst at Vital Knowledge.

“Target could have been worse, but it’s still not good,” Crisafulli said in a note to clients.

Q1 2023 Target earnings

For the three months ending April 29, 2023, Target reported:

• Revenue from sales of $24.95 billion, a 0.5% rise from the $24.83 billion in sales a year earlier.
• A 0.4% rise in the cost of sales to $18.39 billion from $18.46 billion in the comparable quarter of 2022.
• Net earnings of $950 million, a 5.8% drop from the $1.01 billion reported in Q1 2022.

Bloomberg News contributed to this report.

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

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

The post Target says digital sales fell in Q1; net income drops 5.8% appeared first on Digital Commerce 360.

Ecommerce continues to decline

The eyewear retailer’s ecommerce revenue decreased 8% in Q1 2023 compared with a year earlier, according to a Seeking Alpha transcript of the earnings call on May 9. The decline in ecommerce revenue was in line with the retailer’s expectations, said Steve Miller, senior vice president and chief financial officer, during the call.

Miller said the decline was driven by “an intentional reduction in marketing spend by 35% year over year, as we bring marketing spend as a percent of revenue back to pre-pandemic levels in the low teens.”

The retailer expects ecommerce revenue to increase further into 2023, Miller said.

Warby Parker is No. 340 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Warby Parker expands network of stores

The retailer finished Q1 2023 with an additional 35 stores. That brings its total to 204, “which compares favorably to retail revenue of about 28% year over year,” Miller said during the call. “Retail productivity in Q1 was 103% versus the same period last year.”

Warby Parker finished the quarter with 2.29 million active customers. That’s a 2.5% increase compared with the same period a year ago. Its average revenue per customer increased 8.4% year over year to $270.

Warby Parker attributes sales boost to in-store shopping, less due to ecommerce

“It’s worth noting that our revenue growth follows a similar pattern to our growth in active customers,” Miller said, “where active customers are increasing in retail driven by new store openings and decreasing our ecommerce channel as we rebalance marketing spend.”

Co-founder, co-CEO and co-chair Dave Gilboa told investors the retailer plans to see increased in-store sales as well as a “pickup in ecommerce traffic in the second half of this year.” In Q1, Warby Parker launched five new eyewear collections, including a celebrity collaboration with Jimmy Fallon.

Digital marketing strategy

Warby Parker also plans to advertise on linear TV and invest in digital programs like search engine optimization (SEO) and search engine marketing (SEM).

“With our channel mix between stores and [ecommerce] now rebalanced to pre-pandemic levels, we expect marketing spend as a percent of revenue to remain in line with pre-pandemic levels in the low double digits,” Gilboa said.

For the fiscal first quarter ended March 31, 2023, Warby Parker reported:

• Revenue of $171.96 million, an $18.8 million increase over the revenue of $153.21 million in 2022.
• A net loss of $10.8 million. That is a $23.3 million decrease from the reported loss of $34.13 million in Q1 2022.
• Gross profit increased 5.7% to $94.8 million.
• Active customers increased 2.5% to 2.29 million.
• Average revenue per customer increased 8.4% year over year to $270.

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

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

The post Warby Parker online sales decrease 8% in Q1 2023 appeared first on Digital Commerce 360.

Asos sales dropped by 8% in the six months through February. Operating losses widened to £272.5 million ($344 million), according to a May 10 statement. CEO Jose Antonio Ramos Calamonte said the business has made progress in its turnaround despite “some very challenging conditions.”

Like other online-only retailers, Asos has been hit hard by rising return rates. But unlike rivals Zara and Boohoo Group Plc, Asos hasn’t introduced a fee for online returns.

Aside from Asos sales challenges

It has been nearly a year since Ramos Calamonte took the reins at Asos. He seeks to convince investors that his plan will return the business to profit by reducing stock, cutting spending and slowing automation in some of its key warehouses. The company is writing off as much as £130 million of stock and in January, Asos started a deal with Secret Sales to sell discounted items.

The benefits of the turnaround are expected to come through in the second half, with Asos generating cash once more, as remedial measures offset sales that are still forecast to decline. The company said there will be a free cash outflow for the full year of £100 million, the bottom end of guidance.

Asos sales are struggling as Britain’s cost-of-living crisis pushes shoppers to prioritize their spending on essentials like food and energy rather than fashion. Rival retailer Next Plc is also seeing falling sales with less demand for weddings and other events.

The retailer has agreed a small extension to its £350 million revolving credit facility with lenders, pushing the deadline for repayment out to November 2024 from July 2024. The facility also steps down to £220 million by August next year.

Asos is building a management committee to support its overhaul as Ramos Calamonte has been managing the company with an almost entirely interim team. It has hired Michelle Wilson, former private banker at Berenberg, as senior director of strategy and corporate development. Dan Elton joins as senior customer director, with previous experience at Made.com and J Sainsbury Plc. Asos is still seeking a chief financial officer after only managing to hire a temporary replacement despite months of searching.

Asos ranks No. 17 in Digital Commerce 360’s Europe Database. Next Plc ranks No. 21.

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

The post Asos sales drop 8%; fast-fashion retailer attempts turnaround appeared first on Digital Commerce 360.

The transaction will combine two well-known brands at a time when consumers are pulling back from pandemic-era splurges on home furnishings. The companies said in a May 9 statement that they will fund the purchase with about $2.7 billion of cash and $1.3 billion in stock.

Mattress Firm — the largest U.S. specialty mattress retailer, with more than 2,300 stores across 49 states — is expected to operate as a separate business unit within Tempur Sealy. The combined company will have about 3,000 retail locations globally, 71 manufacturing facilities and more than 21,000 employees.

Keith Hughes, an analyst at Truist Securities, called it a “landmark deal for the mattress industry” but noted that U.S. regulators may have antitrust concerns.

“The deal had been speculated upon for some time, and we believe the question now shifts to government approval,” Hughes said in a research note. “The deal will bring the potential of significant revenue and cost synergies, but also dis-synergies around the loss of other retail at TPX and suppliers at Mattress Firm.”

The companies expect the combination to streamline retail operations, customer service and supply-chain management for Tempur Sealy. The company expects the deal to add to adjusted earnings in the first year and sees annual cost savings of at least $100 million within four years.

Tempur Sealy is No. 164 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales. Mattress Firm is No. 281.

Pandemic boost

The home-furnishings industry was bolstered during the pandemic as Americans spent more time indoors and used government stimulus checks and inflated savings to buy more items for the house. Spending on such things has fallen as the pandemic has eased and inflation has put pressure on shoppers’ budgets.

Stellenbosch, South Africa-based Steinhoff bought Mattress Firm for $3.8 billion in 2016 at the height of an acquisition spree. The company has sold shares in many of its units to pay down debt. It’s still trying to rebuild after an accounting scandal in late 2017. This is the first sale since it started a court process to avoid bankruptcy.

The company announced in January that Mattress Firm was withdrawing its initial public offering registration to explore all options.

The companies expect to close the agreement in the second half of 2024 subject to regulatory approvals. More than 80% of Mattress Firm shareholders have approved it, and doesn’t require approval from Tempur Sealy holders.

J.P. Morgan Securities is serving as financial adviser to Tempur Sealy. Goldman Sachs, Barclays and Jefferies are financial advisers for Mattress Firm.

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.

The post Tempur Sealy to buy Mattress Firm for about $4 billion appeared first on Digital Commerce 360.

The post Committing to curbside pickup — or breaking up with it appeared first on Digital Commerce 360.