Top 1000 U.S. E-Retailers | Digital Commerce 360 https://www.digitalcommerce360.com/topic/top-1000-us-eretailers/ Your source for ecommerce news, analysis and research Wed, 07 Jun 2023 17:05:40 +0000 en-US hourly 1 https://wordpress.org/?v=6.1.1 https://www.digitalcommerce360.com/wp-content/uploads/2022/10/cropped-2022-DC360-favicon-d-32x32.png Top 1000 U.S. E-Retailers | Digital Commerce 360 https://www.digitalcommerce360.com/topic/top-1000-us-eretailers/ 32 32 The world of ecommerce is flat for Lands’ End https://www.digitalcommerce360.com/2023/06/07/lands-end-ecommerce/ Wed, 07 Jun 2023 17:05:40 +0000 https://www.digitalcommerce360.com/?p=1046172 Lands’ End Inc., an early pioneer in both B2B and B2C ecommerce, continues to struggle. For the fiscal first quarter ended April 28, the apparel retailer posted total net revenue of $309.6 million. That compares with $303.7 million in the first quarter of 2022, a 1.9% gain. Net loss was $1.7 million, which compared with […]

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Lands’ End Inc., an early pioneer in both B2B and B2C ecommerce, continues to struggle.

For the fiscal first quarter ended April 28, the apparel retailer posted total net revenue of $309.6 million. That compares with $303.7 million in the first quarter of 2022, a 1.9% gain. Net loss was $1.7 million, which compared with a Q1 2022 net loss of $2.4 million.

Lands’ End ecommerce

Ecommerce, which Lands’ End launched in the late 1990s and far ahead of many other apparel and mass merchandise retailers, also remained flat in the U.S. and declined overseas.

For the quarter, global Lands’ End ecommerce net revenue was $203.1 million. That’s a decrease of 7.3% from $219.1 million in the first quarter of fiscal 2022. Compared to the first quarter of fiscal 2022, U.S. ecommerce net revenue increased 1.6% to $177.7 million from $174.9 million.

Lands’ End U.S. ecommerce accounted for 57.4% of all sales compared with 57.6% in the first quarter of 2022.

Our U.S. ecommerce, which represents our largest go-to market segment, saw a sales increase of 2% from the first quarter of 2022, driven by targeted promotions within swim and adjacent product categories, interim chief financial officer Bernie McCracken told analysts on the Lands’ End Q1 earnings call.

“Our Europe ecommerce business in the quarter was down 29%, reflecting the continued lower levels of consumer demand in Europe,” McCracken said.

Lands’ End B2B sales

Lands’ End does not break out its B2B ecommerce numbers, but overall business-to-business sales in Q1 from its Outfitters unit was $74.0 million. That’s a 37.1% increase from $54.0 million in the first quarter of fiscal 2022.

“We continue to roll out our strategic initiatives and expect that the learnings from each successive quarter will enable further refinement,” said CEO Andrew McLean.

In the wake of weak ecommerce sales growth, Lands’ End is bringing in a new senior executive to change up operations. The company in April hired Stuart Hogue as Lands’ End’s senior vice president of U.S. ecommerce. Most recently, Hogue served as a senior advisor for McKinsey & Co. Prior to that, Hogue worked for 15 years at Nike. Most recently, he was vice president and general manager of Foot Locker, according to his LinkedIn profile.

“Stuart is a digitally savvy leader with more than 20 years of industry experience,” McLean told analysts. “He enjoyed a successful career at Nike and joined us from McKinsey, where he advised clients on digital, omnichannel retail, and marketing transformation initiatives.”

Lands’ End is No. 79 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

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Amazon Pay adds Affirm buy-now-pay-later service https://www.digitalcommerce360.com/2023/06/07/amazon-pay-adds-affirm-buy-now-pay-later-service/ Wed, 07 Jun 2023 16:51:23 +0000 https://www.digitalcommerce360.com/?p=1046163 Amazon.com Inc. will allow eligible U.S. retailers using the online retail giant’s Amazon Pay service to offer Affirm Holdings Inc.’s buy now, pay later product under a new agreement between the two companies. The service, known as Adaptive Checkout, offers biweekly and monthly payment options for purchases of more than $50 with annual percentage rates […]

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Amazon.com Inc. will allow eligible U.S. retailers using the online retail giant’s Amazon Pay service to offer Affirm Holdings Inc.’s buy now, pay later product under a new agreement between the two companies.

The service, known as Adaptive Checkout, offers biweekly and monthly payment options for purchases of more than $50 with annual percentage rates starting at zero, according to a June 7 statement. Millions of customers using Amazon.com and the Amazon mobile app already have access to the pay-over-time service, the companies said. Amazon Pay is the retailer’s payment service available to consumers on other ecommerce websites. Shoppers can use their Amazon accounts, with payment and shipping information, to shop on other websites.

More retailers are adding buy-now-pay-later services every year, and as of June 2023, 54.4% of Digital Commerce 360’s ranking of the Top 1000 online retailers offer some version of this payment type. That’s up from 45.8% of Top 1000 retailers in 2022 and 28.2% in 2020. Amazon first added Affirm in 2021. For comparison, BNPL is more common among retailers who also offer Amazon Pay, at 68.2%.


17.3% of retailers in the Top 1000 offer Amazon Pay.

The buy-now-pay-later option can increase sales and customer loyalty, and attract new customers, San Francisco-based Affirm said. The mattress-and-bedding company Casper and water-filter supplier USA Berkey Filters have already integrated Affirm’s offering within their use of Amazon Pay, according to the statement.

“Customers want more choice and flexibility when paying online,” Affirm president Libor Michalek said in the statement.

Amazon is No. 1 in the Top 1000. The database ranks North American web merchants by sales. Amazon is also No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

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Consumers checking online for product availability recognized by retailers https://www.digitalcommerce360.com/2023/06/07/online-product-availability-omnichannel/ Wed, 07 Jun 2023 13:45:14 +0000 https://www.digitalcommerce360.com/?p=1044446 Shoppers are browsing online, but they are not always looking to buy online. Inventory visibility is all the more important as consumers want the option to see what is in stock and where they can find it nearby. Online product availability According to a Digital Commerce 360 and Bizrate Insights survey in March 2023 of […]

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Online shoppers should consider a retailer’s return policy as return options change https://www.digitalcommerce360.com/2023/06/06/online-shoppers-should-consider-a-retailers-return-policy-as-return-options-change/ Tue, 06 Jun 2023 19:50:34 +0000 https://www.digitalcommerce360.com/?p=1044463 Returns remain a costly headache for retailers. More retailers are now charging customers return fees to send back online orders, shifting the expense of return shipping to the customer. And only 21.2% of retail chains offer free return shipping. This is far less than the 45.7% of web-only merchants offering the option. Free return shipping […]

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BarkBox conversion rate jumps 30% after marketing email testing https://www.digitalcommerce360.com/2023/06/06/barkbox-conversion-rate-jumps-30-after-marketing-email-testing/ Tue, 06 Jun 2023 16:45:44 +0000 https://www.digitalcommerce360.com/?p=1044751 Subscription retailer Bark is testing ways to keep its subscribers long term, while also encouraging them to add more items to their subscription box orders, says Ed Walloga, vice president, lifecycle marketing and ecommerce. “We needed to have a lot more targeted conversations with each consumer throughout their lifetime with Bark. And we needed to […]

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Subscription retailer Bark is testing ways to keep its subscribers long term, while also encouraging them to add more items to their subscription box orders, says Ed Walloga, vice president, lifecycle marketing and ecommerce.

“We needed to have a lot more targeted conversations with each consumer throughout their lifetime with Bark. And we needed to do that efficiently,” he says.

Bark started its business in 2012 selling a monthly subscription BarkBox containing two dog toys and two dog treats in each shipment. The dog toy and dog food subscription retailer expanded its product offerings through the years, including offering dental products in 2020.

Bark uses technology to upsell and cross sell to customers.

Ed Walloga, vice president, lifecycle marketing and ecommerce, Bark

To figure out how best to market to consumers to increase upselling and cross selling, Bark turned to Simon Data, a software tool that allowed the retailer to run comparison tests and see how marketing campaigns perform.

Retaining and building up the lifetime value of its customers is important to the subscription retailer.

Data shows 5.6% of retailers in Digital Commerce 360’s Top 1000 retailers used a subscription model in 2022. That’s down from 6.5% in 2021. That percentage differs depending on the category. 36.1% of Top 1000 food and beverage retailers had a subscription model in 2022. That is up from 27.8% a year earlier. 28% of health and beauty retailers had subscriptions in 2022, and 10.1% of specialty retailers like Bark.

During its fiscal fourth quarter 2022, Bark’s average order value increased $2. Upselling and cross selling accounted for the boost, Walloga says.

“And a huge amount of that was the increase in improving [conversion for] dental Bark Bright,” he says. Bark Bright are products like toothpaste and dental chew treats for dog teeth care.

Bark tests marketing emails for Durable Dental Chew products

In January 2023, Bark tested two marketing email campaigns for its Durable Dental Chew product launch, which is part of Bark Bright.

Bark sent the emails to its regular BarkBox subscribers. These subscribers received plush toys with treats as part of their core subscription.

The other type of subscribers are Super Chewers. These subscribers receive more durable toys in addition to treats as part of their core subscription.

The A/B split tests involved “several hundred thousand in each pool, and the A/B test was an even 50/50 split for each pool,” according to the company.

A/B testing, also known as split testing, allows Bark to test a percentage of its subscribers with two email campaigns to see which results in more opens or clicks. Bark can test different images or language and compare which ones consumers responded to more favorably.

The results showed that BarkBox subscribers were more responsive to the standalone announcement. Conversion rate was 16% higher for those BarkBox subscribers.

Meanwhile, Super Chewer subscribers were more responsive to marketing that highlighted the product collection. Conversion rate for these consumers was 30% higher.

“This was a surprising result, but this is why we test these things,” Walloga says.

Bark believes that because Super Chewer is a more specialized product, consumers liked a side-by-side comparison of original and durable products.

 

Bark subscribers opt in for SMS texts

There are 2 million BarkBox subscribers receiving a box every month, Walloga says. BarkBox sends subscribers products they can add onto each box. That program includes sending push notifications via SMS, he says.

“We’ve got a very aggressive push notification,” Walloga says.

SMS is an opportunity to “have worthwhile conversations with active and engaged customers,” he says. “That’s where you can apply SMS, and it doesn’t feel like a promotional campaign [to the consumer],” he says.

Bark used Simon Data to launch SMS in July 2022. It currently has 175,000 subscribers opted in to receive text messages. The opted-in base is growing by an average of 35% each quarter, according to Bark.

When customers respond to Bark SMS texts, a Bark employee responds, Walloga says.

“Our customer care team can pick up the [SMS] conversation and respond directly,” he says.

SMS subscribers receive a mix of product availability announcements. These include alerts about exclusive treats, toppers and toys they can add to their subscription box before it ships. SMS recipients also receive order status updates like shipment confirmations and account updates. They also receive marketing messages for “seasonal moments” like Cinco de Mayo or celebrating Star Wars on May 4th.

One of the most successful SMS texts reminds subscribers they have 24 hours left to add to the next box, he says.

Also, Bark is working on using its app to engage with consumers.

“We want to test pushing notifications directly to the Bark app,” Walloga says. According to Walloga, “a vast majority of our users are engaging on a mobile phone or the Bark app,” he says.

Bark adjusts email marketing strategy to retain subscribers

Bark subscribers typically commit to six- or 12-month subscription periods, Walloga says. The retailer reviews data to identify which customers are most at risk of leaving, he says.

“We’ve developed [email] outreach to those customers to remind them of the value that they saw as a Bark user,” he says.

This includes noting purchase history and favorites, he says. In addition to a personalized message, the retailer also sometimes includes incentives. This has allowed Bark to keep subscription renewal rates strong, Walloga says.

Email is still at the core of Bark’s digital marketing tools, Walloga says.

“Email is one of the fastest ways to test and iterate, and it gives you a little more real estate to have a conversation with a consumer,” he says. “But by no stretch is it the only channel we use.”

Personalized communications increases loyalty, Walloga says. Some of the tests Bark tried focused on loyalty, reminding customers of the value Bark brings them.

“If you have a very targeted, personalized conversation with the consumer or subscriber, they will respond,” he says.

Bark is No. 174 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

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Amazon eyes free mobile service for Prime members https://www.digitalcommerce360.com/2023/06/05/amazon-mobile-service-prime-members/ Mon, 05 Jun 2023 18:36:57 +0000 https://www.digitalcommerce360.com/?p=1045841 Amazon.com Inc. has been talking with wireless carriers about offering low-cost or possibly free nationwide mobile phone service to Prime subscribers, according to people familiar with the situation. The company is negotiating with Verizon Communications Inc., T-Mobile US Inc. and Dish Network Corp. to get the lowest possible wholesale prices. That would let it offer […]

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Amazon.com Inc. has been talking with wireless carriers about offering low-cost or possibly free nationwide mobile phone service to Prime subscribers, according to people familiar with the situation.

The company is negotiating with Verizon Communications Inc., T-Mobile US Inc. and Dish Network Corp. to get the lowest possible wholesale prices. That would let it offer Prime members wireless plans for $10 a month or possibly for free and bolster loyalty among its biggest-spending customers, the people said. They requested anonymity to discuss a private matter.

The talks have been going on for six to eight weeks and have also included AT&T Inc. at times, but the plan may take several more months to launch and could be scrapped, one person said.

“We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time,” Amazon spokesperson Maggie Sivon said in a statement.

T-Mobile, AT&T and Verizon all said they were not currently in discussions with Amazon about wireless service. Dish declined to comment.

Amazon Prime benefits

Amazon’s U.S. Prime subscribers pay $139 a year for privileges like speedy free delivery, video streaming and access to 100 million songs. Analysts say Prime membership has stagnated in the country since Amazon boosted the annual price from $119, a sign that a subscription is less attractive to consumers struggling with a stubbornly high inflation rate. About 167 million Amazon shoppers had Prime memberships as of March. That’s unchanged from a year earlier, according to Consumer Intelligence Research Partners.

“Prime membership continues to grow year over year as the value members receive continues to increase,” said Amazon spokesperson Bradley Mattinger.

Amazon is competing with Walmart Inc., whose $98-a-year Walmart+ membership is emerging as a lower-cost alternative. It offers many of the same perks as Prime and free grocery delivery on orders of at least $35. Amazon in February increased its free grocery delivery threshold to $150 from $35.

Amazon’s influence

For the wireless industry, an Amazon deal could be seen as a welcome boost to wholesale revenue and a way to attract more traffic to newly expanded 5G networks. But Amazon’s entry could be detrimental if Prime wireless becomes popular and starts to chip away at the big carriers’ customer base.

A deeply below-market price from one of the world’s largest retailers could easily undercut the pricing power of the big three national carriers, making it tempting for subscribers to go to Amazon. Unlimited plans start at $60 a month at Verizon and T-Mobile, with AT&T starting at $65.

With Prime wireless, Amazon would become a new national brand, reselling mobile service from one of the big three carriers. The retailer could choose to offer wireless to its Prime members at an attractive price, prompting customers to cancel their current mobile service. Or, Amazon could go wider and offer Prime wireless to anyone who wants to switch service and become a Prime member.

Amazon sends shivers through the industry any time it enters a new market. The Seattle-based retail giant has shown it’s willing to absorb billions of dollars in shipping and movie production costs to fuel Prime membership growth. Wireless service could be just one more item Amazon’s willing to take a hit on if it gives the company a leg up versus Walmart.

Can’t say no

The carriers aren’t really in a position to say no to Amazon. Having poured billions of dollars into super-fast, high-capacity 5G wireless networks, the mobile operators have little to show for the effort. They are eager to find new applications and sales outlets that can generate some return on the investment.

Dish has the most to gain from a deal with Amazon. The company is attempting to transform itself into a cloud-based wireless carrier capable of competing with Verizon and AT&T. But it’s carrying a load of distressed debt and is seeking new avenues of funding to be able to launch its Boost Infinite wireless service. Dish is already working with Amazon, whose AWS division is providing cloud computing to run the core network for its wireless service and is expected to start selling Boost Infinite wireless service on Amazon as soon as next month.

“This is perceived as a lifeline for Dish,” said Peter Supino, an analyst at Wolfe Research.

For the big three carriers, Amazon’s entry is “troublesome,” Supino said. “It’s understood that the fewer competitors, the better.” Europe’s wireless market is a good example of how big carriers saw industry prices fall with the entry of low-price resellers, he said.

Amazon has tried phones before

Amazon has already made several forays into wireless. In 2014, Amazon introduced the Fire Phone in an attempt to compete with devices from Apple Inc. and Samsung Electronics Co. But Amazon killed it a year later. The company also plans to start testing a satellite-internet service called Project Kuiper next year.

By taking the approach of a reseller, otherwise known as a mobile virtual network operator or MVNO, Amazon would avoid the huge costs of having to build out its own mobile network.

MVNOs have had a colorful track record. Brands including ESPN Mobile and Virgin Mobile both failed. Alphabet Inc. has the Google Fi service that runs on T-Mobile’s network and has about 2 million customers.

Companies sometimes bundle wireless as a perk in broader service packages. Cable companies like Charter Communications Inc., which resells service from Verizon, have said they see a time soon when the cable bill includes wireless service. Charter and Comcast Corp. have fueled some of the sector’s fastest subscriber growth by offering cheap to free wireless service as a promotion bundled with broadband.

Amazon is No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of North American retailers by web sales. Amazon is also No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

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Retailers share ways to make shipping more sustainable  https://www.digitalcommerce360.com/2023/06/05/retailers-share-ways-to-make-shipping-more-sustainable/ Mon, 05 Jun 2023 17:07:59 +0000 https://www.digitalcommerce360.com/?p=1045854 Sustainability is part of Coalatree’s mission.    The performance apparel brand works to make its clothing in a sustainable way, such as designing products with sustainable materials like recycled water bottles and manufacturing its garments in factories that adhere to its standards, such as using a waterless dye method.    So when it comes to getting that […]

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Earnings recap: What you missed from Best Buy, Macy’s and more https://www.digitalcommerce360.com/2023/06/02/earnings-recap-what-you-missed-macys-best-buy/ Fri, 02 Jun 2023 16:11:26 +0000 https://www.digitalcommerce360.com/?p=1045773 More businesses in Digital Commerce 360’s Top 1000 list of ecommerce retailers in North America reported earnings over the last week. These are the highlights you need to know. Read more earnings coverage here. 23andMe Inc. (No. 309) Revenue was down 8% year over year for the fiscal fourth quarter, but it grew 10% to […]

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More businesses in Digital Commerce 360’s Top 1000 list of ecommerce retailers in North America reported earnings over the last week. These are the highlights you need to know. Read more earnings coverage here.

23andMe Inc. (No. 309)

Revenue was down 8% year over year for the fiscal fourth quarter, but it grew 10% to $272 million for the full fiscal year ended March 31, 2023. The biotechnology company grew its customer base 11% in the fiscal year to 14 million genotype users.

It also grew its subscription membership, 23andMe+, CEO Anne Wojcicki told investors. Subscription membership grew 51% year over year to 640,000 members. More customers are also opting in to the subscriber program with their initial purchase, though she did not give a specific figure.

Advance Auto Parts Inc. (No. 101)

Advance Auto Parts reported a “double-digit sales increase” in ecommerce for its first quarter. Over the same period, net sales grew 1.3% year over year and comparable store sales decreased 0.4%. The auto parts retailer also reported that DIY omnichannel sales grew, without sharing specifics.

Bark (No. 173)

Revenue was down 2% year over year in the fiscal fourth quarter to $126 million, coming out ahead of Bark’s guidance. Direct-to-consumer revenue also decreased 1.5% to $116 million. For the full fiscal year, direct-to-consumer revenue increased 5.3% over fiscal 2022.

Bark broke down DTC revenue by product category. Toys, beds, and apparel generated $307 million in revenue in fiscal 2023. Consumables including treats and food generated $165 million.

Best Buy Co. Inc. (No. 7)

Domestic online revenue declined 12.1% for the first quarter to $2.69 billion, Best Buy said. Online sales made up 30.5% of total domestic revenue in the quarter, down slightly from 30.9% last year. About 40% of those sales were buy online, pick up in store (BOPIS) orders, the retailer said.

Online sales have doubled since 2020, CEO Corie Barry told investors.

Big Lots (No. 251)

Net sales were down 18.3% year over year to $1.1 billion the first quarter, Big Lots reported.

“Our lower-income consumer was hurt by inflation, lower tax refunds, and higher interest rates, and their confidence has been shaken by banking failures,” CEO Bruce Thorn said in a statement.

The discount retailer declined to share specific ecommerce data.

“We continue to improve the [online] customer journey through a more curated experience, better site navigation, and eliminating friction,” Thorn told investors.

Deckers Brands (No. 167)

Direct-to-consumer net sales grew 19.5% in the fiscal fourth quarter to $343.1 million, up from $287.2 million the previous year. Much of the growth came from a few specific brands. Sneaker company Hoka net sales, including in stores and ecommerce, grew 40.3% year over year to $397.7 million. Teva sales also grew 14.6%, while Ugg sales were down 16.1%.

“Fiscal year 2023 was an exceptional year for the Deckers organization, delivering 15% revenue growth and increasing earnings per share nearly 20%,” CEO Dave Powers said in a statement. “We continue to deliver record results, including the HOKA brand adding more than half a billion dollars of top-line revenue.

Lululemon Athletica Inc. (No. 27)

Lululemon reported ecommerce sales grew 18% in Q1 over the year-ago period. Online sales contributed $835 million in revenue in the quarter, 42% of total revenue, the retailer said.

Traffic grew 30% year over year both in stores and online, chief financial officer Meghan Frank told investors. 

Macy’s Inc. (No. 17)

Online sales were down 8% year over year in the first quarter. Ecommerce sales made up 33% of total sales in the quarter, CEO Jeff Gennette told investors. Digital penetration remained flat from 2022, down from a high of 40% during the pandemic. 

Nordstrom Inc. (No. 21)

Ecommerce sales were down 17.4% in Q1 due to eliminating digital order fulfillment at Nordstrom Rack stores and closing the Trunk Club in 2022, the retailer said.

Nordstrom reported that digital sales made up 36% of net sales in the quarter, down from 39% of net sales in the year-ago period. Digital sales were approximately $1.1 billion in the quarter.

Sportsman’s Warehouse (No. 361)

Net sales decreased 13.5% year over year to $267.6 million in the quarter. Sportsman’s Warehouse didn’t provide specific information on ecommerce sales. CEO Jeff White told investors that online sales are a “continually growing highlight” of the business even as overall sales were down.

Ulta Beauty (No. 48)

Ulta comparable sales were up 9.3% year over year in the first fiscal quarter. The beauty retailer didn’t specify what percentage of sales were through ecommerce.

Ulta also finished the two-year rollout of its updated website and app in the quarter. 

Victoria’s Secret & Co. (No. 53)

Net sales decreased 5% year over year $1.4 billion in the fiscal second quarter, Victoria’s Secret reported. Web traffic for the apparel retailer remained flat from 2022, though conversion rates and average unit retail both declined over the period. 

Casual sleep and beauty were the best performing categories both online and in stores, CEO Martin Waters told investors. Sales in China showed “outsized growth in digital,” he said.

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Costco ecommerce sales drop; net sales still increase 1.9% https://www.digitalcommerce360.com/2023/06/01/costco-ecommerce-sales/ Thu, 01 Jun 2023 20:15:05 +0000 https://www.digitalcommerce360.com/?p=1045720 Costco Wholesale Corp. reported ecommerce sales declined 10% in its fiscal third quarter ended May 7. Moreover, Costco ecommerce sales fell 7.8% for its first three fiscal quarters. 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 […]

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Costco Wholesale Corp. reported ecommerce sales declined 10% in its fiscal third quarter ended May 7. Moreover, Costco ecommerce sales fell 7.8% for its first three fiscal quarters.

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.

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Lamps Plus says goodbye to upgrades with new order management system https://www.digitalcommerce360.com/2023/06/01/lamps-plus-says-goodbye-to-upgrades-with-new-order-management-system/ Thu, 01 Jun 2023 11:00:05 +0000 https://www.digitalcommerce360.com/?p=1045631 No more upgrades. That was the main appeal for top home furnishing retailer Lamps Plus Inc. to upgrade its order management system with Manhattan Associates Inc. to the Active Omni platform, Bill Gratke, senior vice president of supply chain, planning and reporting told Digital Commerce 360 at the Manhattan Momentum 2023 conference in Phoenix last […]

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No more upgrades.

That was the main appeal for top home furnishing retailer Lamps Plus Inc. to upgrade its order management system with Manhattan Associates Inc. to the Active Omni platform, Bill Gratke, senior vice president of supply chain, planning and reporting told Digital Commerce 360 at the Manhattan Momentum 2023 conference in Phoenix last week.

Instead of going through a major upgrade for any change it wants to make to its order platform, such as adding a new payment feature, the Active Omni platform is “version-less,” Gratke said. Manhattan Associates will continually update the software every 90 days with new features. If Lamps Plus wants a specific feature, it will have to wait until Manhattan adds it in one of its releases. It may not need every feature that the vendor will continually add, but it will be available to the retailer. A refresh of features every 90 days is a huge benefit compared with waiting for the company to do an upgrade, which could be seven years later, said Clark Linstone, president and chief operating officer.

Lamps Plus upgrades with Manhattan Associates

Lamps Plus has a good track record with Manhattan Associates, as it uses Manhattan’s older Distributed Order Management system, which it implemented in 2012. In addition, Lamps upgraded its point-of-sale system to Manhattan’s Active POS in 2018.

“Our success with Active POS has paved the way for us to move on to Active Omni,” Gratke said. “We have a high degree of confidence. The people who helped implement, they’re smart, and they delivered the product they said they would. And I can tell you, that’s the reason why we’re moving on to Active Omni.”

The cloud-based system also means Lamps Plus will have less physical hardware at its location.

“(The benefit) is it’s getting out of the hardware business, and basically having the ability to get more sleep at night because the system is not going down or you don’t have to reboot a server weekly or something like that. And those are all the things that happen with a hardware-based system in your own data center,” Gratke said.

The brand expects the store-side of the upgrade to go live in August 2023, and the online customer-service integration will go live in summer 2024. Lamps Plus decided to stagger the release dates in order to lower the amount of risk on such a critical system, Gratke said.

The implementation fee for the integration is more than $1 million and the annual subscription fee also is more than $1 million, Lamps Plus said.

Order management complexity

Order management, however, is a huge animal to tackle. Consider this: Lamps Plus takes orders from its website, LampsPlus.com, from its 36 showrooms and a handful of marketplaces, including those operated by Amazon.com Inc., Target Corp., Walmart Inc., eBay Inc. and Google Inc.

Lamps Plus supplies its products from 700 vendors, which Lamps Plus views as 700 additional warehouses with its products. It takes inventory feeds from all of them at least once a day to ensure its inventory counts are accurate. Lamps Plus has two distribution centers, its main one in California, which sprawls 784,000 square feet, a distribution center in Pennsylvania and a returns center in California. Lamps Plus ships about 70% of its products from its own distribution center and drop ships the other 30% from one of its vendors’ warehouse.

“The hardest install we’ll ever have is order management, because it’s the brains of entire order system,” Gratke said. “Every order in your entire company from POS to kiosk orders to marketplace orders to your own proprietary website — Lampsplus.com — all come through that same system and goes to the brains. And the brains, which is the order management system, decides where to place order: vendor, your own warehouse store or whatever it might be.”

More sophisticated rules

With the new order management system, Lamps Plus can implement more sophisticated rules about where to ship items from based on freight costs, shipping costs, speed, proximity to shopper among others. For example, the new system will allow the retailer to allocate sensitivities and thresholds with each of its priorities. As an example, if an order is $3 cheaper to ship from a vendor, but the customer would have to wait 10 more days, the new system may opt for a more expensive shipping source in order to have faster shipping, based on the rules the retailer set.

“It’s both speed and costs, and cost has gotten to be the bigger issues as oil price increase significantly,” Linstone said. “So the timeliness of how quickly we can get the product to the customer and how cost effective are the drivers behind this and trying to figure out the absolute best place to ship from.”

While the older system worked, it was “clunky” and tweaking the rules in the new system will be much easier, he said.

Lamps Plus is No. 109 in the 2023 Digital Commerce 360 Top 1000.

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