Despite the DTC growth, the retailer’s net sales decreased 18% year over year to $251.9 million. However, net sales at its two physical stores (in Hollywood, California, and Everett, Washington) grew 41% year over year. Mariotti attributed that to a nearly 50% increase in foot traffic.

“While we can’t make up for all the lost retail opportunity, we are continuing to see extraordinary growth in the channels we do control,” Mariotti said.

Funko ecommerce sales

The brand launched a new, Salesforce-powered website in its fiscal Q1, he said. He did not say what platform Funko used for its previous website. The transition better allowed Funko to upgrade its order management system, improve functionality, receive better analytics and improve integration across its websites, he said. Funko ecommerce sales account for about 17% of net sales, Mariotti said.

“In the channel — where we control inventory levels and product newness — demand is at an all-time high,” Mariotti said. “Our data suggests that among avid collectors, many purchases that may have occurred at a retail partner in the past are migrating to funko.com.”

At WonderCon, the first convention in 2023 that Funko attended, the new site helped more than double Funko’s ecommerce revenue compared with the prior year’s event, he said. WonderCon is an annual comic convention in Anaheim, California.

Funko earnings

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

• Net sales decreased 18% year over year to $251.9 million.
• Funko direct-to-consumer sales grew 61% to $42 million
• Wholesale decreased 26% year over year to $210 million. Funko chief operating officer and chief financial officer Steve Nave attributes this to retailers being cautious about restocking and inventory levels.
• U.S. net sales declined 23% to $178 million. Meanwhile, Funko sales in Europe grew 4% to $59 million.

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

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Sportsman’s Warehouse net sales in its fiscal Q4 were $379.3 million. That’s an 8.9% decrease compared with $416.3 million in the fourth quarter of its fiscal 2021. It cited “lower sales demand from consumer inflationary pressures and recession concerns, partially offset by the opening of nine new stores over the last year.” Compared with the fourth quarter of fiscal year 2019, net sales increased 46.9% from $258.2 million.

However, net sales increased 46.9% from $258.2 million compared with the same quarter in the retailer’s pre-pandemic fiscal 2019.

Sportsman’s Warehouse said same-store sales decreased 12.5% in Q4 2022 compared with the Q4 2021. And they increased 24.9% compared with Q4 2019.

“During 2023, we see Sportsmans.com as a way to drive additional sales through reaching new customers outside our geographic area,” White said. He added that the retailer will continue to leverage its fleet-wide inventory and introduce new relevant products to its website.

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

Sportsman’s Warehouse fiscal 2022 sales

The retailer’s net sales for the full year decreased as well. Sportsman’s Warehouse sales were $1.399 billion in its fiscal 2022. That’s a 7.1% decrease compared with $1.506 billion in fiscal 2021.

Same-store Sportsman’s Warehouse sales decreased 12.2% during fiscal year 2022 compared to fiscal year 2021. The retailer cited lower sales in all categories. Compared with its fiscal 2019, same-store sales increased 27.6%.

“While we believe outdoor participation remains strong, the macroeconomic environment and inflationary pressures are weighing on the consumer and their discretionary spending,” White said. “Additionally, the unusually wet and cold weather in the western U.S., where a large portion of our stores are located, is creating a later-than-normal start to the spring shooting, fishing and camping seasons, negatively impacting our current business.”

Sportsman’s Warehouse ecommerce targets

CEO Jon Barker, who announced his retirement on the fiscal Q4 earnings call with investors, said in the retailer’s fiscal Q3 2022 earnings call that Sportsman’s Warehouse has a target of 25% ecommerce penetration by 2025.

“During the third quarter, over 70% of our online sales were serviced with inventory from our stores or through drop ship partners,” Barker said at the time.

Sportsman’s Warehouse opened nine new stores in 2022 and ended the year with 131 total stores. White said the retailer is on track to open 15 new stores in 2023. That’s the most stores it has opened in a single year.

Earnings summary

For the fiscal fourth quarter ended Jan. 28, 2023, Sportsman’s Warehouse reported:

• Net sales were $379.3 million. That’s down 8.9% compared with $416.3 million in the Q4 2021. Compared with Q4 2019, net sales increased 46.9% from $258.2 million.
• Same-store sales decreased 12.5% compared with the year-ago quarter. Compared with the same period of 2019, same-store sales increased 24.9%.

For the fiscal year 2022 ended Jan. 28, 2023, Sportsman’s Warehouse reported:

• Sportsman’s Warehouse ecommerce sales accounted for 15% of total sales.
• Net sales were $1.40 billion. That’s down 7.1% from the previous fiscal year’s $1.51 billion.
• Same-store Sportsman’s Warehouse sales decreased 12.2% year over year. Compared with 2019, same-store sales increased 27.6%.

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

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Ekblad uses artificial intelligence customer engagement vendor Blueshift’s “create predictive model,” which Sweetwater uses to plan promotional strategy around its products. The model uses machine learning to predict whether a consumer will click on a marketing email.

Marketers need to collect data so it can be used for personal recommendations and predict future shopping behaviors, says Michael Renz, global retail technology leader at consulting firm Ernst & Young.

“That helps create a personalized shopping experience,” Renz says. Without automating certain tasks, retailers stand to lose to retailers that are investing now, he says. 

“I can see who’s ready to engage via email and I can then target the people who didn’t open the email,” Sweetwater’s Ekblad says.

Sweetwater created a predictive audience called “likely to click,” within Blueshift, for consumers that were likely to click on a link within the email to Sweetwater.com, Ekblad says.

“We used this predictive audience to supplement our normal engaged audiences,” he says.

It worked. Sweetwater increased clicks from emails by 25% month over month in September 2022 compared with August 2022, he says.

Sweetwater is No. 72 in the Top 1000, Digital Commerce 360’s database ranking the largest North American online retailers by web sales.

Classify tags result in increased clicks, online sales

Classify tags on products like “guitar vintage,” has more context than “guitar,” Ekblad says. Sweetwater has built about 150 customer classify tags and attached these to its inSync blog articles and videos. The classify tags dive deeper into customer interests than categories alone, he says.

Sweetwater’s customer data platform (CDP) funneled these classify tags into Blueshift. This helped further match content to consumers, resulting in a 13% increase in clicks and a 40% increase month over month in purchases. A CDP is marketing software that collects first-party customer data to build a single view of each customer.

Sweetwater is currently merging 150 classify tags from its internal CDP to Blueshift. It will also create a ranking system of which classify tags are most popular. 

It can launch automated email campaigns based on classify tags. These email campaigns can segment its email list based on shoppers who made purchases with those classify tags and email them other products in that category. 

Personalized product recommendations

Throughout 2022, Sweetwater continued to build personalized product recommendations in email marketing campaigns.

As a result, email click-through rates for the retailer’s weekly deals and promotions emails increased 10% month over month. Online purchases attributed to emails increased 16% month over month, Ekblad says. 

After success with its weekly emails, Sweetwater expanded product recommendations into additional promotional and category-focused email marketing campaigns that were category-focused.

The software makes recommendations based on factors such as personal viewing history, and items related but not limited to:

• Viewed products
• Category interests
• Customer classify tags
• Promotional offers
• Product financing eligibility
• Inventory availability

Why do shoppers abandon their carts?

Sweetwater also wanted to appeal to shoppers who abandoned their carts. A/B testing — also known as split testing — allows Sweetwater to test a percentage of its shoppers with two email campaigns to see which results in more opens or clicks. The retailer may test different images or language and compare which consumers responded to more. 

In July 2022, Sweetwater ran its first A/B test, which compared article and video Blueshift recommendations in its weekly content newsletter inSync, resulting in a 31.5% increase in click-through rate for the number of consumers who opened the email compared with the other email. Order rate increased 39%, he says. Order rate is the total orders relative to the number of consumers who opened the message. Sweetwater conducted the A/B tests over the course of several weeks, Ekblad says. Previously, Sweetwater hand-selected what content to include in emails, he says. Blueshift’s AI-generated recommendations are more effective, he says.

Other tested changes include removing text promoting an active deal when there wasn’t one. “It was cluttering the email which decreasing the visual impact of items that had actual deals available,” Ekblad says. Another changed the call to action button during checkout from “checkout now” vs. “go to cart.”

The retailer plans to roll out messages based on customer preferences, he says. Sweetwater plans to test email campaigns with articles and video content related to items in their shopping cart items. The software will test how promotional headlines, color and design elements, messaging and other emails elements appeal to shoppers.

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And it works. Shoppers who visit American Girl’s interactive virtual museum have a 25% higher add-to-cart ratio on its ecommerce site than shoppers who have not interacted with the museum, the brand says.

Since American Girl’s launch in 1986 as a cataloger, the brand has created a world around its doll products. For example, each doll is the leading character in her own period-set book series. This historical narrative helps keep children engaged with the brand and want to purchase not only the doll but also all of her matching accessories, says Debbie Haag, vice president of marketing at American Girl.

“We’re not just a toy. We’re not just a doll,” Haag says about American Girl’s main differentiator as a brand.

In keeping with the times, American Girl launched a virtual museum as another way to immerse consumers into the brand in a content-rich way.

“We were built on rich stories and experiences, and so the decision was really easy to create a virtual museum,” Haag says.

The virtual museum is an interactive website akin to how a consumer would use “Street View” on Google Maps. Consumers see the front of the museum and can click on icons to travel throughout the museum.

Pictured is the front of the American Girl virtual museum, which is geared for girls to engage with the different characters.

Each doll has her own room in the museum, which is decorated in a historical time period that correlates with the doll’s story. Consumers can click on different parts of the room to learn more about the character or her family, take a quiz about the doll or play a game.

“Through this immersive experience, the kids can feel a part of each character’s world,” Haag says.

Each American Girl doll character has her own time-period set room at the virtual museum. Here, doll Josefina is in her 1824-themed room.

Because American Girl’s focus is on stories and content, the brand made sure to create a bookstore in the museum populated with the brand’s books. There, consumers can find different books on the virtual shelves, click on them and read a preview of the first chapter.

The American Girl museum includes a book shop where girls can read the first chapter of any book.

Engaging content is part of the American Girl brand

The interactive museum is a complement to American Girl’s 11 physical stores, which are also meant to be interactive. For example, stores have a salon and doctor’s office for the dolls, and a restaurant where children and their dolls can have tea.

“If you are not in the locations of those 11 stores, you don’t get that immersive experience. We wanted to make it available for our fans,” Haag says.

American Girl launched the virtual museum in July 2021 after building it over the course of three months with technology vendor Obsess. In June 2022, it relaunched the museum as a “play destination” and incorporated a gaming component into it. In each room, there is a pet. If the girl finds all the pets, she earns points that she can redeem for a digital download.

Whenever American Girl launches a new doll character, it then refreshes the virtual gift shop with items for that doll. At the end of December, American Girl just launched its new girl of the year for 2023, Kavi Sharma. And so, the museum now includes a room for her and the gift shop is focused on products that complement her character.

The American Girl gift shop at the virtual museum.

This refresh of the museum coexists with its “omnichannel approach to marketing” in which American Girl will promote the doll on its website homepage, with in-store signage, on its social media platform, in addition to the museum.

Measuring success of the American Girl virtual museum

The virtual museum is a separate website URL — museum.americangirl.com/play —than the shopping-focused AmericanGirl.com ecommerce site. Consumers can navigate to the museum by hitting the “play” button at the top of the American Girl homepage.

“One site all about play and exploration and fandom, and AG.com is much more shopping focused,” says Stacy Carpenter, senior manager of user experience and user interface at American Girl.

Within the museum, a girl can create a wish list and then send that list via email to her parent or “gift giver,” Haag says. Because the target audience for American Girl is girls ages 5 to 10 years old, the brand legally cannot sell to them. Consumers can add items to their cart, but the products don’t have price tags on them. Girls also have to first enter their birth date before any items can be added into the cart, and only shoppers older than 13 can add to cart.

Because of these age-selling restrictions, the brand measures success in different ways for the museum website. Instead of focusing on add-to-cart and conversion — which are the key performance indicators for its main ecommerce site AmericanGirl.com — the virtual museum focuses on:

• Time spent in rooms
• Number of products clicked on
• Number of interactive points each girl earns with the provided games
• Number of items each girl adds to her wish list

And the museum pulls in the metrics to prove its worth, Haag says. Girls spend six to 10 minutes on average per session at the museum. That is 1,000% longer than average time spent for all shoppers on AmericanGirl.com, Carpenter says.

In the museum’s 18 months of existence, girls have added “thousands” of items to their wish lists, Carpenter says. Plus, those emails have a high conversion rate, on par with the rate of an abandoned cart email from AmericanGirl.com, Haag says without revealing figures.

It makes sense that the wish list emails have a high conversion, as the message is a tailored list of products from a loved one, Haag says. This strong performance is good, she says. It’s a lot less expensive to generate a conversion from a repeat buyer compared with acquiring a new customer, she says.

Plus, shoppers who visit American Girl’s interactive virtual museum have a 25% higher add-to-cart ratio on AmericanGirl.com than shoppers who have not interacted with the museum, the brand says.

American Girl is a premium brand, as it costs more than $100 doll. Because of this high-ticket order, on average, it takes five to seven touchpoints with the American Girl brand before making a purchase, Haag says. And that’s why having rich content is worth investing in, as it is another interactive element with the brand, Haag says.

“We know for a fact it is an important part of the journey,” Haag say.

American Girl chooses Obsess for virtual museum

The toy brand chose virtual store platform Obsess to build the virtual experience. American Girl was impressed with the Obsess founder and CEO Neha Singh, who previously worked at fashion magazine Vogue and had eye for fashion and premium brands, Haag says.

“She just had a great eye for detail and creating beautiful experiences,” Carpenter says.

Haag says the vendor was relatively new when they started work together. It felt like American Girl got a good deal for what it provided, Haag says without sharing a dollar figure.

“We’re a premium company, and we trusted them with our brand,” Haag says.

Obsess says its pricing depends on the size and complexity of each virtual store.

“The primary value of virtual shopping experiences is to allow brands to create deeper connections with its customers through increased engagement,” Singh says. “Virtual stores are particularly impactful in increasing brand equity and loyalty amongst young consumers.”

Obsess has built virtual experiences for several retail brands including Christian Dior, Ralph Lauren, Coach, Crocs and others.

Toy manufacturer Mattel, No. 203 in the Digital Commerce 360 Top 1000, owns American Girl.

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Ecommerce spending topped $3 billion a day on 38 occasions during the 2022 holiday season. Only 25 days topped $3 billion in digital sales during the 2021 season.

Adobe had reported earlier that online shopping during Cyber 5 — the period from Thanksgiving to Cyber Monday — grew 4% year over year to $35.27 billion.

Discounts attracted online shoppers

Across major ecommerce categories, discounts hit record highs this holiday season. Discounts in toys peaked at 34% off listed price (versus 19% in 2021), as well as electronics at 25% (vs. 8%), according to a statement from Adobe Inc. Discounts were also strong across other categories including:

• Computers at 20% (vs. 10%)
• Apparel at 19% (vs. 13%)
• Televisions at 17% (vs. 11%)
• Appliances at 16% (vs. 4%)
• Sporting goods at 10% (vs. 6%)
• Furniture at 8% (vs. 2%)

“At a time when consumers were dealing with elevated prices in areas such as food, gas, and rent, holiday discounts were strong enough to sustain discretionary spending through the entire season,” said Vivek Pandya, lead analyst at Adobe Digital Insights, in a written statement. “The big deals drew in consumers and drove volume, helping retailers who were challenged with oversupply issues, particularly in categories such as apparel, electronics, and toys.”

Inflation’s impact on ecommerce

Strong consumer spending online has been driven by net-new demand, and not simply higher prices. The Adobe Digital Price Index (DPI), which tracks ecommerce prices across 18 categories, shows prices online have been falling year over year since September 2022. Adobe figures are not adjusted for inflation, but if online inflation were factored in, there would still be growth in underlying consumer demand.

Toys drove online holiday sales

Online sales of toys jumped 206% compared to pre-season levels in October 2022. Top-selling toys this holiday season included Legos, Hot Wheels, Paw Patrol, LOL Surprise, Squishmallows, Bluey and Cocomelon.

Other categories with substantial jumps in online sales during the holiday period included video games (up 115%) and apparel/accessories (up 94%).

Subcategories that saw strong demand in online holiday shopping:

• Watches (up 108%)
• Baby toys (up 101%)
• Gift cards (up 98%)
• Cosmetics (up 90%)
• Outdoor grills (up 86%)
• Speakers (up 76%)
• Smart home products (up 67%)

Additional insights: Online holiday shopping

• Mobile shopping: This holiday season, 47% of online sales came through smartphones (up from 43% in 2021). Christmas Day (Dec. 25) set a new mobile record, driving the majority of online sales at 61% (up from 58%).

• Buy now, pay later (BNPL): In the holiday season overall, BNPL orders rose 4% when compared with 2021. However, revenue decreased 2%, indicating shoppers are increasingly using BNPL for smaller shopping carts.

• Curbside pickup: The fulfillment method was used in 21% of online orders this holiday season (for retailers that offer the service), down slightly from 23% in the year prior. From Dec. 22 to Dec. 23 (right before Christmas Eve), curbside pickup peaked at 42% of online orders, with anxious shoppers using the service to get gifts in time.

• Marketing channels: Paid search remained the biggest driver of sales for retailers this holiday season (29% of online sales attributable to that channel). Direct web visits (19%), organic search (17%), affiliates/partners (16%), and email (15%) were also major contributors. Revenue directly attributable to social media remained at less than 3% of total sales this season, but that share has grown 24% YoY.

Methodology

Adobe’s analysis covers more than 1 trillion visits to U.S. retail websites, 100 million SKUs, and 18 product categories. Adobe Analytics is part of Adobe Experience Cloud, which is used by more than 85% of the top 100 internet retailers in the U.S. listed in the Digital Commerce 360 Top 500 Report.

2022 Top 500 Report

Analysis of North America’s leading 500 online retailers. Includes over 100 charts, rankings by 2021 web sales, benchmarking data, growth analyses by category and merchant type, and an executive overview on the current state of ecommerce. 

View Details

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Cyber 5 refers to the five-day period from Thanksgiving through Cyber Monday. During that period, 41% of consumers surveyed said they did most or all of their purchasing online. 37% of consumers said they purchased more online and less in-store than during the Cyber 5 in 2021. They cited convenience, avoiding large crowds and finding better deals as their top reasons for buying online.

On Black Friday, specifically, 88% of purchases were under $100. Consumers spent $26 per item, on average, Numerator said.

However, 60% of buyers made two or more purchases throughout the day, and 15% made five or more purchases. 44% of Black Friday shoppers spent more than $100, and more than a fifth (22%) spent more than $200.

Among the retailers Numerator tracked during the Cyber 5, Best Buy recorded the largest average item price: $168.47. Kohl’s followed with $34.97 and Amazon with $33.31.

Amazon.com Inc. ranks No. 1 in the Top 1000. The Top 1000 is Digital Commerce 360’s database of the largest North American online retailers by web sales. Best Buy Co. Inc. ranks No. 6 and Kohl’s Corp. ranks No. 21.

Shoppers return to Amazon on Black Friday

Half of Cyber 5 buyers also bought on Amazon Prime Day in July, and 36% also bought during Amazon’s Early Access Sale in October, Numerator said. 

Meanwhile, Amazon announced Nov. 30 that it had its “biggest holiday shopping week ever.” Amazon declined to comment on its sales growth compared with 2021 or pre-pandemic 2019.

Customers around the world purchased hundreds of millions of products during the Cyber 5 period, Amazon said. 

Amazon said its best-selling categories during the Cyber 5 period were:

• Home
• Fashion
• Toys
• Beauty
• Amazon Devices

Amazon said some of its best-selling items were:

• Echo Dot
• Fire TV Stick
• Apple AirPods
• Hasbro Gaming CONNECT 4
• Burt’s Bees Christmas Gifts
• Apparel from Champion
• Apparel and shoes from New Balance
• The Amazon smart plug, Echo Show
• Nintendo Switch

The mass merchant said its customers bought millions of Amazon devices including Echo, Ring, Blink, Kindle and FIRE TV. Amazon did not specify how many of each item, or which sold most.

Sales for Amazon’s marketplace merchants totaled more than $1 billion over the Cyber 5, the web giant said. Some of the top sellers from marketplaces included games, Amazon announced. 

Economic climate drives Cyber 5 spending shifts

78% of Numerator’s respondents said they planned ahead to shop during the Cyber 5 period. That’s down from 90% in 2021. Meanwhile, 17% made the decision to purchase on the day they purchased. That’s more than double compared with the 8% of consumers who bought spontaneously in 2021.

35% of Cyber 5 shoppers reported spending less this year, Numerator said. They cited having less disposable income, not finding good deals, choosing to buy fewer holiday gifts, and being financially cautious with a looming recession.

The 19% of shoppers who reported spending more this year cited rising prices, Numerator said.

Among consumers who made purchases during the Cyber 5 this year, 88% said they shopped on Black Friday. That’s up from 81% who shopped on Black Friday 2021, Numerator said. 50% of Cyber 5 buyers said they made purchases on Cyber Monday. And 45% said they made purchases the Saturday after Thanksgiving, Numerator said.

Following the Cyber 5, 58% of consumers said they have mostly or completely finished their holiday gift shopping, Numerator said.

The most common gift categories, according to Numerator:

• Apparel (67% of consumers)
• Toys & Games (51%)
• Electronics (46%)
• Home Goods (44%)
• Beauty products (33%)

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Digital Commerce 360 ranks small and medium-sized retail businesses, or SMBs, by their web sales in the 2022 Digital Commerce 360 Next 1000, the latest edition of our annual report. The 2022 Next 1000 includes online retailers that generated annual ecommerce revenue between roughly $1 million and just over $39 million in 2021.

Collectively, the Next 1000 merchants posted year-over-year web sales growth of 22.8% in 2021. That was higher than their 19.9% web sales growth in 2020 and 16.7% growth in pre-pandemic 2019. Over the two years of the pandemic, Next 1000 merchants’ online sales increased 47.2%.

Leading online SMBs

The top five online SMB retailers are:

• Toys/hobbies merchant Lion Brand Yarn (No. 1001)
• Hardware/home improvement merchant House of Antique Hardware Inc. (No. 1002)
• Office supplies merchant Jam Paper & Envelope (No. 1003)
• Apparel and accessories retailer Baitme.com (No. 1004)
• Jewelry merchant Whiteflash Inc. (No. 1005)

Next 1000 SMBs surpass 2021 U.S. ecommerce growth

Merchants with physical stores were largely able to reopen their locations in 2021. This allowed shoppers to once again choose between shopping in store versus online. The fact that 2021 growth remained above the 2019 level, despite store reopenings, demonstrates that shoppers grew increasingly comfortable shopping online during the pandemic and likely will continue to do so.

Small- to medium-sized merchants grew at a higher rate in 2021 compared with the Digital Commerce 360 Top 1000 retailers, which are large, well-known merchants like Amazon.com Inc. and Walmart Inc. That’s a departure from 2020, when the Top 1000 retailers experienced explosive ecommerce growth of 44.8% compared with the Next 1000’s 19.9%.

Online retail sales growth slowed to 17.8% in 2021 compared with 42.8% in 2020, according to Digital Commerce 360’s analysis of U.S. Department of Commerce data. After trailing the market with only 19.9% growth in 2020, Next 1000 retailers surpassed the growth of U.S. ecommerce in 2021, growing 22.8% year over year. In addition, the Next 1000 also exceeded the 15.7% online growth of Top 1000 retailers in 2021 and the 14.4% of total U.S. retail sales.

Year two of COVID-19

Year two of the pandemic reflected a shift in consumer shopping preferences. Inflation and price increases for necessities like fuel and groceries left shoppers with less to spend on other products. Still, the Next 1000 retailers in the apparel/accessories (27.8%), housewares/home furnishings (27.7%) and hardware/home improvement (26.5%) all experienced web sales growth of around 27% in 2021.

In 2020, toys/hobbies (35.5%), hardware/home improvement (34.5%), and food/beverage (34.4%) topped the categories in web sales growth. Many consumers spent a good portion of 2020 indoors due to the pandemic. As a result, they spent more on recreation and dining, and invested in their home décor accordingly.

In 2021, consumers continued to invest in their homes. They did this by upgrading furnishings or bedding (the mattresses subcategory increased online sales 44.1% year over year). They also enhanced their home lighting (bulbs/lighting increased 41.5% year over year), went back to in-person sports (organized sports spending increased 38.1% year over year) and bought more items for their children, especially as in-person school resumed (the children’s apparel subcategory grew 36.9% year over year). And even compared to the first year of the pandemic, toys for children remained a spending priority for consumers in 2021. The toys subcategory grew 36.6% year over year.

Shoppers also shifted their spending budgets toward travel and dining out in 2021, as vaccines enabled many restaurants to reopen and airlines experienced a surge in travelers. According to the U.S. Bureau of Transportation Statistics, U.S. airlines carried 674 million passengers (not seasonally adjusted) in 2021. That’s 82.5% more than in 2020 (369 million unadjusted).

The 2022 Next 1000 Report delves into why online SMBs fared better in 2021 when compared to larger merchants and the ecommerce industry as a whole.

2022 Digital Commerce 360 Next 1000 Report includes:

• Rankings by category and subcategory of North America’s leading online retailers ranked 1,001-2,000
• 100+ data-packed charts and graphics on merchant category growth and much more
• Detailed analysis of the fastest growers, newcomers, latest omnichannel offerings and 2021 challenges, like inflation and supply and fuel costs
• Category and merchant type data analysis for online SMBs
• Breakout sections on 2022 challenges, marketplaces and customer acquisition and experience
• Exclusive interviews with Next 1000 ecommerce executives
• View the table of contents for full details on what’s included in the report.

The 2022 Next 1000 Report can be downloaded now as a PDF for $499. Digital Commerce 360 Gold and Platinum Members receive a complimentary copy of this report as a part of their membership.

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Amazon Prime Early Access runs Oct. 11-12. The sitewide sale spans multiple categories. Digital Commerce 360 reviewed how retailers across the Top 1000 approached this year’s additional Amazon Prime sale. Amazon.com Inc. is the No. 1 in the 2022 Digital Commerce 360 Top 1000, which ranks the largest North American e-retailers by web sales.

Amazon Prime Day vs. Early Access

Of those 80 retailers running promotions, 18.8% of retailers competed directly with Amazon, citing a Prime Day Early Access-like sale. That’s down from the 38.0% of 79 retailers that ran promotions during Amazon’s July 11 and 12 Prime Days. 

17.5% of retailers tied promotions directly to a holiday, such as Christmas, Thanksgiving weekend or Halloween. That’s down from 44.3% of retailers that tied promotions to a holiday (including Prime Days) in July. Retailers that linked promotions to the holidays included mentions of Black Friday (28.6%), Christmas (35.7%), Halloween (21.4%) and Thanksgiving (7.1%).

And 5.0% of retailers used specific Prime-related language and timed promotions on their homepages during the Prime Early Access event or around these days. That’s down from 15.2% of retailers during July’s sale days.

Retailers varied the language used to promote sales. 15.0% of promoting retailers included one of the following keywords: holiday, Prime, early access, gifting and X-day sale. 

In July, 85.7% of retailers with holiday promotions cited Prime Day directly, while also noting Back to School (14.3%), Black Friday (8.6%) and 4th of July (2.9%). 

Fifteen retailers emphasized competition with Amazon’s Prime Early Access Days, including Macys.com, which tied both Prime and holiday language for its two-days-only “Holiday Early Access” sale. Costco Wholesale Corp. highlighted member savings days, while Dick’s Sporting Goods noted three-day-only deals.

Macy’s.com cited “early access” as part of its 2-day holiday promotional strategy on Oct. 11.

Gen Z apparel retailer PacSun took it one step further with a blazing banner displaying up to 40% off and popups of its PacFridayPreview noting two days left.

PacSun promoted its limited-time PacFridayPreview on its home page on Oct. 11.

Consumers are making careful purchases

The decline in retailers’ competing sales in October compared to July might have to do with the current economic environment, fraught with inflation and higher prices for necessities like gas and groceries, says Alexander Winston, consultant at Propeller, a business consulting agency. Today, inflation is reducing buying power. Winston cautions against retailers promoting too early and too often. As holiday selling seasons are landing earlier and earlier, there will be a limit to the “juice to be squeezed” from consumers, he says.

“Consumers are expected to spend an average of 6% more versus last year, with inflation climbing above 8%, indicating softer sales this year,” Winston says.

And because consumers will be more wary of spending this year, there is likely to be more demand around essential purchases than nice-to-haves, said Thomas Kasemir, chief product officer at Productsup, a product-to-consumer software vendor. 

“By running a sales event in October, businesses can get a better understanding of what the essential purchases are this year,” Kasemir said. “Brands can’t afford to lose out on sales this Black Friday and Cyber Monday. So, an early sales event acts as a trial run to work out any kinks in their system.”

Target and Walmart mirror Prime Days and Early Access strategies

Once again, Amazon’s direct competitors held sales, albeit a different approach from Amazon. Target Corp. (No. 5) launched its own deal days to compete with Amazon. The three-day sale occurred before Amazon Prime Early Access, held from Oct. 6 through Oct. 8. Deals ranged to up to 50% off, similar to its July 3-day deals, which ranged from 5% to 60% off. On Oct. 11, Target launched Black Friday deals on its homepage.

Meanwhile, Walmart Inc. (No. 2) displayed a more muted homepage on Oct. 11, highlighting a “flash deal” item at the top. The retailer promoted some Halloween deals rather than Black Friday. It also included the usual promotion of its 30-day free trial for its membership program. 

Gift cards, Amazon photo projects among top sought items

By 9 a.m. ET, Oct. 12, Chicago-based market research firm Numerator captured 13,215 orders with an average order value of $45.50. That totals just over $606,000 in sales. Given that Digital Commerce 360 estimated that Amazon’s sales on the Prime Day event earlier this year exceeded $12 billion, it is important to note that Numerator is only capturing a small subset of Amazon orders.   

The top items include Amazon photo projects, Amazon gift cards and Amazon essentials women’s apparel. Most items (59%) have sold for under $20, while 4% sold for more than $100. According to Numerator, the top categories consumers say they’ve purchased are household essentials, health & beauty, and apparel and shoes. 14% of shoppers purchased expensive items they waited for a sale in order to buy. 

Discount types 

Fewer retailers, 71.3%, offered percent-off discounts as part of the October promotion, according to Digital Commerce 360’s site checks. That compares with 77.2% of retailers that offered the same discount type for Amazon Prime Days in July. Percentage discounts ranged from 5.0% to 80.0% off, with the median retailers’ maximum percentage off at 40% and median minimum at 10.0%.

In October, more retailers offered dollar-figure discounts (25.0%) and free shipping (28.8%) as promotions. Fewer offered gifts with purchase (6.3%), and fewer retailers offered multiple types of discounts during day one of Amazon Prime Early Access (36.6%). That compares with 40.5% in July.

Other types of discounts included Chewy.com Inc.’s promotion for a $30 e-gift card when spending $100. Overstock.com Inc. flashed a “free shipping on everything” promotion, and Lands’ End promoted its Warm Coat Drive in place through Nov. 20, where a customer receives 50% off a new Lands’ End coat in exchange for gently worn coats given in stores.

No-discount retailers

While the majority of retailers in the Digital Commerce 360 panel offered sales, 20.0% offered no discounts at all. This is similar to July, except the majority not offering deals was more evenly distributed among consumer brand manufacturers and retail chains.

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The post Retailers dial down promotions during Amazon Prime Early Access sale appeared first on Digital Commerce 360.

The new marketplace — dubbed GoodwillFinds.com — comes more than two decades after the 1999 launch of Shopgoodwill.com, an online auction site that did $21.2 million in sales in September.

Goodwill did not provide more information about the relationship between the two ecommerce sites.

GoodwillFinds debuts as interest in secondhand goods retailers has skyrocketed. Online sales at the 17 resale-only retailers Digital Commerce 360 tracks rose 34.4% to $1.91 billion in 2021.

Online marketplaces such as StockX (No. 30 the Digital Commerce 360 Online Marketplaces database), Depop (owned by Etsy Inc., No. 18) and TheRealReal Inc. (No. 40) attract shoppers interested in reducing waste, helping the environment and saving money. And on the same day that Goodwill debuted GoodwillFinds, South Korea’s Naver Corp. announced it had purchased Poshmark Inc. (No. 33) for $1.6 billion.

Nonprofit model

Matthew A. Kaness, CEO of GoodwillFinds, said his organization has a distinct advantage over its for-profit competitors.

“Goodwill already has millions of active customers today,” he said. “They already love the brand and the mission and want to put their dollars into shopping with us versus other venues.”

“Shoppers are going to not just find a unique assortment that is in some cases much larger than those other players,” he said. “They’re going to learn our story and realize that putting their dollars with GoodwillFinds.com versus some of those other sites supports a mission and a nonprofit that is funding 2 million people who are benefiting from social services at the local community level.” Goodwill affiliates provide a wide variety of services, most notably in job training and job-placement services for the disabled. 

GoodwillFinds, like ShopGoodwill and the local affiliates, is structured as a nonprofit organization. After the cost of overhead, such as shipping and labor costs and the technology to power the ecommerce site, GoodwillFinds will return all revenue to participating affiliates. 

“That being said, this market (pre-owned/secondhand goods) is growing eight times faster than retail. I think there’s a lot of space for a lot of winners here,” he said.

Toys and collectibles are popular resale items. GoodwillFinds has thousands of such items from local Goodwill donation centers.

GoodwillFinds.com’s founding members

GoodwillFinds launches with six local Goodwill affiliates representing 338 stores participating:

• Goodwill Industries of Southeastern Wisconsin
• Evergreen Goodwill of Northwest Washington
• Goodwill of Colorado
• Goodwill of Southern California
• Goodwill of Central and Southern Indiana
• Goodwill-Easter Seals Minnesota

The site went live with more than 100,000 unique items for sale.  Those items were donated to participating Goodwill donation centers, which then listed them for sale on GoodwillFinds.com. Those same local donation centers will handle shipping and fulfillment for now, but GoodwillFinds.com will roll out centralized shipping and returns management in the near future.

By contrast, 135 Goodwill stores from across the United States and Canada list goods on ShopGoodwill, according to Nicole Morrison director of marketing and communications for Goodwill of Orange County (California.)

GoodwillFinds is built on Salesforce

GoodwillFinds is built on Salesforce Commerce Cloud, the cloud-based ecommerce system sold by Salesforce Inc.

“We’re building proprietary integrations, data sets, personalization engines, and other integrations on top of that to will allow us to ultimately integrate it with the customer experience at the store level over time,” Kaness said. “Salesforce and our own development teams are building out integrations on the supply side, so that we can very rapidly and efficiently automate the onboarding process for launching new items and onboarding new members onto the platform.”

Kaness said GoodwillFinds will also operate as a technology services company for local federation members, building systems for inventory management, customer-relations, online payments and digital marketing.

The mission

Kaness, a long-time retail executive and former CEO of ModCloth, said he never expected to join a nonprofit organization. But Goodwill Industries’ history of helping people find jobs won him over.

“My older brother was born with cerebral palsy, and I’ve watched him go on and off disability his whole adult life. He lives his best life when he’s working,” he said. “So the mission of supporting the dignity of work is easy to get behind.”

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