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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Total U.S. web traffic from Feb.-April 2023 was -5.3% for Home Depot, -8.9% for Lowe’s, and -13.1% for Overstock, according to Similarweb estimates.

Home Depot (ranked No. 4 in the 2023 Digital Commerce 360 Top 1000 database) had the best conversion rate (3.3%) among home improvement merchants, which include Lowe’s (No. 12), Overstock.com (No. 50), Wayfair Inc. (No 10), Ikea, and Ace Hardware Corp. (No. 662). That’s down half a point from 3.8% a year prior and 3.8% in the quarter ended Jan. 31. Ikea ranks No. 3 in the Digital Commerce 360 Europe database.

When compared to earnings results for Q1, only Lowe’s reported an increase in online sales (6%) for the three-month period ended May 5.

Home Depot online sales for fiscal Q1 ended April 30 fell 2.9%. While Overstock.com reported that online sales were down 29% in its fiscal Q1 ended March 31. Wayfair reported revenue decreased 7.3%, active customers decreased 14.6% and orders were down 6.7% for its fiscal Q1 ended March 31. 

Home Depot led the pack in web traffic 

With more than 521 million visits to its website in Q1 2023, Home Depot outpaced Lowe’s 321 million visits and 303 million visits to Wayfair.com, according to Similarweb estimates of desktop and mobile web visits from Feb.-April 2023.

Ikea has the most web visits that lead to conversion

Ikea’s converted web visits grew 0.3%, the only merchant to grow in this category. Wayfair’s conversion rate decreased 0.1%, followed by Ace Hardware (-0.2%), Lowe’s (-0.3%), Home Depot (-0.5%) and Overstock (-0.6%). 

Lowe’s lost the most web traffic share but gained online sales in Q1

It may be quality of time, not quantity of time, when it comes to web traffic visits. Lowe’s web traffic declined in Q1 but online sales increased 6% — an anomaly among competitors whose ecommerce sales declined.

Bounce rates were down for Lowe’s but up for Home Depot, according to Similarweb estimates. Lowe’s bounce rate decreased 2.77% in April 2023 year over year. 

“This could reflect a better ecommerce experience for website visitors,” says David Carr, senior insights manager. Over the last few years, Lowe’s has invested in upgrading its 15-year-old legacy software system. 

Online sales increased 6%, representing more than a 10% sales penetration. Lowe’s will continue to focus on upgrading its B2B Pro digital experience with new tools and personalization, said Marvin Ellison, chairman, president and CEO, during the retailer’s May 23 earnings call. Ellison attributed online growth to an increase in its pro sales. Lowe’s pro customers are contractors, repair remodelers, tradesmen, as well as property management and facility management professionals, according to the merchant.

“We also continue to enhance our DIY online experience by making home improvement projects easier for consumers to visualize, estimate and shop,” Ellison told investors. “These investments are paying off with higher online convergence and attachment rates.”

Consumers are also spending less time per website visit, according to Similarweb’s estimates. The average minutes per visit, desktop and mobile web, worldwide, is on the decline. 

In April 2023, the time spent decreased year over year:

Ace Hardware gains the most web traffic in Q1

Smaller merchant Ace Hardware’s desktop web traffic grew 22.4%, according to Similarweb estimates of desktop and mobile web visits from Feb.-April 2023. That’s in line with Ace Hardware’s Q1 2023 (ended April 1) report of a 22% increase in online visits. The merchant reported that online revenue increased 11% compared with the year prior.

Wayfair web traffic also increased 3.1%.

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Total net revenue decreased for the eighth consecutive quarter. Revenue was down 7.3% year over year to $2.8 billion. The majority of the revenue, $2.4 billion, is from U.S. sales, which were down 5% year over year.

Despite decreasing revenue, CEO and co-founder Niraj Shah called Q1 a “strong quarter” for the online furniture retailer. Wayfair expects to report a profit as soon as Q2.

“We have always known, and now we are clearly demonstrating that the Wayfair model is inherently profitable and that there is considerable opportunity in front of us to rapidly drive further margin expansion,” Shah said.

Wayfair ranks No. 10 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

Customer and order growth

Wayfair’s plan to report a profit in Q2 is based on growing customer and order numbers, Shah told investors. The retailer says it has a “dense” promotional calendar for 2023, with sales including its annual Way Days.

In Q1, active customers were down 14.6% year over year to 21.7 million. Wayfair delivered 9.7 million orders in the quarter, down 6.7% over the first quarter of 2022. The average order value stayed consistent at $287.

So far in Q2, which includes April and the beginning of May, orders are up year over year for Wayfair.com, Shah said.

Some experts also predict Wayfair will see a small bump from the downfall of Bed Bath & Beyond.

Reducing shipping costs

Wayfair continued its focus from last quarter on cutting costs, with extra attention on shipping. The retailer classifies all orders as small or large depending on size and weight. Small items are shipped through UPS or FedEx, and larger items go through Wayfair’s delivery network. Many of the most frequently sold items straddle the line at around 150 lbs., Shah said. Wayfair began using more sophisticated analytics to determine which items needed to be shipped in a Wayfair truck with two delivery drivers. Shipping this way is more expensive, but the decreased incidences of damaged products created cost savings, he said.

For the quarter ended March 31, Wayfair reported:

• Total revenue decreased 7.3% year over year to $2.8 billion.
• U.S. net revenue decreased 5% year over year to $2.4 billion.
• Net loss was $355 million, up from a net loss of $319 million in the year-ago period.
• Active customers were down 14.6% to 21.7 million.
• Average order value was unchanged at $287.      

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

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Bed Bath & Beyond has experienced years of dwindling sales. Most recently, the merchant lost 33% in digital sales in 2022 compared with a year earlier, according to Digital Commerce 360 data.

There is not much ground to be gained by competitors. By the end of its tenure, the ailing home goods merchant accounted for 1.4% of overall houseware/home furnishings in the U.S. market in 2022, according to Digital Commerce 360 analysis of U.S. Department of Commerce data.

Digital sales for the housewares and home furnishings category decreased in 2022. Consumers spent less time and money on home improvement projects. Instead, consumers allocated funds to pre-pandemic activities like dining out and traveling. Including Bed Bath & Beyond, the U.S. Top 1000 Digital Commerce 360 retailers accounted for 29.9% of housewares/home furnishings category sales in 2022. That is down from 32.1% in 2021. Notably, without Bed Bath & Beyond, web sales for the category would have declined 4.1% in 2022.

Amazon continues to dominate home goods category

Mass merchants like Amazon.com Inc. (No. 1 in Digital Commerce 360’s Top 1000 retailer rankings), Walmart Inc. and Target Corp. (No. 5) have also experienced a slowdown in ecommerce sales. Amazon still holds the majority of the home goods category market share with 88.47% in 2022. That is down compared with 86.13% in 2021, according to market research company YipitData.

Walmart (No. 2) also experienced a decline. Its market share accounted for 7.27% in 2022, compared with 8.58% in 2021. And Target Inc. also dropped in 2022 to 4.27%, compared with 5.29% in 2021.

A long time coming

Bed Bath & Beyond never quite caught on to ecommerce, says Rich DePencier, area managing partner and chief marketing officer of Chief Outsiders, a management consulting services company.

The retailer didn’t experience the pandemic-induced burst of ecommerce growth other merchants did. Of the top five merchants in the houseware/home furnishings category, Bed Bath & Beyond was the only retailer to have less than 10% 3-year CAGR, according to Digital Commerce 360 analysis.

Where Bed Bath & Beyond shoppers will shop instead

When asked where Bed Bath & Beyond shoppers will shop instead:

• Amazon (68%)
• Target (58%)
• Walmart (48%)
• Home Goods (34%)
• At Home (12%)
• Macy’s (10%)
• Wayfair (5%)
• Crate & Barrel (3%)
• Williams-Sonoma (3%)
• Overstock (2%)
• Nordstrom (2%), according to Numerator, a consumer insights and analytics company survey of 500 verified Bed Bath & Beyond shoppers on April 24.

The opportunity lies in providing the shopping “experience” that Bed Bath & Beyond offered consumers, DePencier says.

“Retailers that are willing to invest in becoming more of a solution for consumers stand to benefit,” he says. That entails connecting the online and in-store experience of shopping for “big cultural moments.” These moments include weddings, babies, and college dorm room shopping.

Wayfair is opening stores in the U.S. to give consumers the option to see in-person what they might buy online. In 2022, IKEA invested $3 billion to turn stores across the U.S. and Europe into delivery hubs and support its ecommerce sales. In April 2023, IKEA invested $2.2 billion to expand storefronts and fulfillment networks throughout the U.S.

“Merchants like Wayfair are trying to create that in store experience. It’s just like how an IKEA has a warehouse right next to the store. You can pick the product on your way out,” says Gopi Polavarapu, senior vice president and general manager of Kore.ai, an artificial intelligence customer experience software vendor. “Especially when it comes to three or four day delivery commitments. It’s impossible to commit to those [timeframes] because they don’t have warehouses in every market.” That’s where locally positioned storefronts come in handy to provide last mile delivery, he says.

Bed Bath & Beyond was too slow to adopt new technology

Before the pandemic, Bed Bath & Beyond had a game plan in place to use technology like QR codes to help consumers shop in-store. Then the pandemic hit and the merchant didn’t adjust its ecommerce side of the business, Polavarapu says.

Polavarapu previously worked at software vendor Zebra Technologies, which sells electronic sensors and industrial scanners. The software and device vendor met with Bed Bath & Beyond in 2019 to introduce these devices to modernize in-store shopping experience, he says. “The plan included placing QR codes [on merchandise] to help shoppers” find what they needed in store, Polavarapu says.

“But when it came to digital ecommerce, they were much slower in adopting technology,” he says. “They tried to save as much [money] as they could rather than modernizing their entire operations.”

Bed Bath & Beyond filed for Chapter 11 bankruptcy on April 23. It plans to liquidate inventory and go out of business.

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“We are encouraged by these results, particularly how we were able to improve results later in the quarter and look forward to the key spring summer selling season,” CEO Jonathan Johnson told investors in the earnings call.

Overstock ranks No. 50 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

The weak housing market is a challenge

Overstock transitioned from selling general merchandise to focusing exclusively on home goods and furniture in 2022. Previously, home goods made up about 80% of sales. 

Overstock’s revenue declined nearly 30% year over year due to pressures facing the entire home category, chief financial officer Adrienne Lee told investors. Lee cited “lower consumer engagement” and a weak housing market in the U.S. as reasons for the pressures.

Active customers are down

Overstock reported a decline in active customers to 4.8 million, down 35% year over year.

Lee said the decline was in part a reflection of Overstock’s move away from non-home goods. She also noted consumers are shifting spending to experiences and services over physical goods. UPS mentioned the same trend that tempered its first-quarter revenue.

To counter declining customer levels, Johnson says Overstock is focusing on loyalty. Consumers are spending less on home goods overall, so special finance offerings and exclusive in-app deals are necessary to bring in customers. 

The retailer also expanded its product assortment by about 20%, Johnson said, as another way to attract customers.

Bed Bath & Beyond’s bankruptcy is an opportunity

Home retailer Bed Bath & Beyond’s bankruptcy might have an upside for Overstock.

“We view it as an opportunity to capture market share,” Johnson said. Some Overstock suppliers who also worked with Bed Bath & Beyond already expressed interest in expanding distribution with Overstock, he added.

Experts predict Walmart and Target will see the majority of gain from Bed Bath & Beyond’s decline. Bank of America Corp. said in a report that Overstock and competitor Wayfair could see a modest boost in sales.

Overstock earnings

For the fiscal first quarter ended March 31, 2023, Overstock Inc. reported:

• Total net revenue declined 29% year over year to $381 million. 
• Net loss was $10 million.
• Total active customers were down 35% to 4.5 million.
• Delivered orders were down 29% to 1.7 million.
• Average order value was $220, a 1% decrease from the year-ago period.

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

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The furniture retailer says the money will go toward opening new stores and creating new fulfillment networks. It marks the largest ever U.S. investment from Ikea, and the company’s largest investment in a single country.

Ikea ranks No. 3 in the Europe Database, Digital Commerce 360’s rankings of the largest online retailers in the region.

Ikea plans a variety of store formats

The retailer says it will open eight new stores in the next three years, along with nine locations of its “plan and order” format. These locations are smaller than the retailer’s iconic warehouse, dedicated exclusively to kitchen, living room, and bedroom furniture. Customers treat the smaller stores like showrooms and order pieces, but nothing is actually available to purchase in-store and take home immediately.

The furniture retailer says it will also open 900 pickup locations in the U.S. in the next three years, some of which will be attached to larger stores. Ikea plans to hire 2,000 additional U.S. workers to staff these locations. The furniture company did not specify where these new locations would be in the U.S.

“It is in all the states across the U.S. where we see opportunities, but I would say in particular the South, where we see big demand that we have not so far been able to respond to,” head of Ikea Retail Tolga Öncü, told Reuters.

As of April 2023, Ikea has 51 U.S. stores. In 2022, the retailer opened 15 pickup locations and two plan and order stores. Ikea also has San Francisco and Arlington, Virginia locations planned for summer 2023.

The U.S. is a major growth opportunity

Ikea expects the U.S. to surpass Germany as its largest sales market in the near future, Öncü, told the Financial Times.

“The U.S. is one of our most important markets, and we see endless opportunities to grow there and get closer to the many Americans with affordable products and services,” Öncü said in a press release. 

Ikea’s U.S. sales for fiscal 2022 reached $5.9 billion, according to the company’s annual report. This was equal to fiscal 2021 U.S. sales, but ecommerce sales were up nearly 19% in 2022.

The retailer says these new locations will make its budget furniture accessible to more American shoppers. ” Our priority is to become more accessible, while staying as affordable as possible for the many people, which is especially important given the increasing costs of living.” CEO & Chief Sustainability Officer at Ikea US Javier Quiñones said in a statement.

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“I thought, let me try to draw something up and send it to a Christmas manufacturer, decoration manufacturer,” Sayes said. That’s when she made her first “Eid mubarak” (blessed Eid) lawn sign. And that’s how she started her brand and ecommerce site, Days of Eid. 

Eid al-Fitr is the holiday that marks the end of Ramadan, a holy month in Islam in which Muslims fast from dawn to dusk each day. Eid al-Adha is the second of the two main holidays celebrated in Islam.

She started Days of Eid in May 2016 with a basic website that had a free theme, she said. Sayes said she started noticing growth in 2018, when she developed an indoor decoration to complement the lawn signs, which had sold out. She said Days of Eid was founded to instill self-identity for Muslim children and adults.

“When I first started, I would see the orders, and I would know everyone who ordered,” Sayes said. “Now, I really rarely know the person.”

The average order value at Days of Eid has grown to about $100 leading up to Ramadan and into its first 15 days. The AOV boost is in line with her free shipping cutoff. Shoppers usually try to hit that mark, she said.

“People basically prepare for Ramadan and Eid when they’re preparing for Ramadan,” Sayes said. “Whatever they get for Eid al-Fitr, they usually use for Eid al-Adha. A lot of people don’t even take down their decor. They just keep it up until Eid al-Adha.”

Ramadan and Eid decorations are becoming more mainstream in the US

Sayes said Ramadan and Eid decorations are still growing in popularity outside of party decorations.

Target Corp. has begun offering a Ramadan and Eid al-Fitr assortment, a Target spokesperson told Digital Commerce 360 in an emailed statement. Target ranks No. 5 in the Digital Commerce 360 Top 1000 database. The database ranks the largest North American online retailers by web sales.

“At Target, we recognize the importance of Ramadan as well as Eid al-Fitr to our Muslim team members and guests as a celebration of family and community. This year’s first-time dedicated Ramadan and Eid al-Fitr assortment was created in partnership with our Muslim team member network. It includes arts and crafts, décor and children’s books. This offering builds upon our longstanding commitment to diversity, equity and inclusion and our purpose to help all families discover the joy of everyday life.”

Party City (No. 321 in the Top 1000) also offers Ramadan and Eid decorations and supplies.

Days of Eid promotes its Islamic art “to create a home that truly defines and celebrates” Muslims.

For now, Days of Eid remains mostly seasonal

Ramadan, and the days leading up to it, continue to be the biggest sales period for Days of Eid.

Sayes said she likes the seasonal nature of her business but still plans to bring more year-round décor to Days of Eid — giftable items that are not just for Ramadan.

“Once the countdown begins from 90 days [before Ramadan], people get a little frantic and start ordering,” Sayes said. “I really want to expand outside of Ramadan and be a regular home décor brand.”

She said she liked being seasonal when she started Days of Eid because her children were young, and she “really couldn’t commit to working crazy hours all year long. I can rationalize it for a few months, but I did not want to do that year-round.”

Muslims will begin celebrating Eid al-Fitr at sunset on April 20, with the holiday’s main festivities and rituals taking place April 21.

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Overstock ranks No. 33 on Digital Commerce 360’s ranking of the Top 1000 North American ecommerce retailers.

BNPL purchases can be for low amounts

BNPL purchases account for a small number of total sales, just 2% to 3%, Johnson told Digital Commerce 360. He said there’s been a “slight uptick” recently, though they’re still a small part of the business overall. Overstock uses Swedish payment service Klarna to facilitate those sales. 

Customers who do choose to use BNPL services are mostly buying less expensive items from Overstock’s catalog.

Average products purchased with Klarna range between $10 and $400, he said. This is a wide range that encompasses Overstock’s average order value of $215 in the fourth quarter of 2022, and notably includes items priced far lower than that AOV. For example, a small throw pillow priced at $25.19 can be purchased through four payments of $6.30 over six weeks.

Strategic reasons to offer BNPL

Johnson told Digital Commerce 360 that the main reason he sees to offer BNPL as a payment option is to maximize flexibility for consumers. Overstock’s BNPL users tend to be younger than its average customers, and may not have well-established credit yet.

For customers who can’t check out with a credit card, the goal is to make BNPL checkout as seamless as possible, though it’s not yet a “perfectly smooth process.” Using the service still takes “a few more clicks” than paying by credit card, he noted, because Klarna performs a “soft” credit check.  That means the check doesn’t hurt a customer’s credit score, and Klarna uses the check to decide how much credit to offer. Still, it’s important to him that “the payment option never becomes a reason to abandon the cart.” 

Overstock also has a lease-to-own option, but it serves a different purpose than BNPL, Johnson said. Customers typically use lease-to-own to finance much larger purchases over a 12-month lease period.

Johnson suspects BNPL use will continue growing among Overstock customers, “especially as we head into a recession,” he said.

Overstock and Klarna have history

Overstock first offered Klarna as a payment option in 2015, relatively early compared to other U.S. ecommerce retailers. This was years before Amazon officially partnered with competing BNPL servicer Affirm in 2021. 

In 2020, Overstock was among the 28.2% of Digital Commerce 360’s Top 1000 online retailers offering BNPL. In 2021, that was up to 45.7%.

In the eight years since adding Klarna, Overstock has stuck with the service. The best BNPL companies — which Johnson believes Klarna is among — make the purchase process nearly “frictionless” for consumers. Tractor Supply Co. (No. 102), Nike (No. 10), and Petco (No. 96) all offer Klarna to customers, too.

As of April 2023, 54% of Digital Commerce 360’s Top 1000 retailers offer some version of the service. Digital Commerce 360’s Top 1000 database ranks the largest North American online retailers by web sales.  18.4% offer PayPal credit, 14.8% use Affirm, 13.3% use Klarna, and 11.7% use AfterPay, with other services coming in behind.

The trend is bigger than Overstock

Overstock is an example of a larger ecommerce trend. More consumers turned to BNPL services in 2022 than in previous years, according to Adobe’s data. Online purchases made with BNPL were up 14% in 2022 over 2021, and revenue from BNPL purchases grew 27% year over year. Adobe did not share the total portion of online orders that use BNPL.

BNPL trends are shifting in 2023 so far, according to early data. In January and February 2023, BNPL use increased 10% year over year, while revenue decreased 19% over the same period. This shows that shoppers are using payment plans to fund lower-priced purchases, like Overstock reported.

Furniture sales and groceries were the two categories where consumers used BNPL more so far in 2023 than in 2022, Adobe found. BNPL furniture purchases were up 38% in the first two months of the year.

“The strong online growth of home furnishing purchasing is expected to bolster buy-now-pay-later adoption, given the higher ticket prices in this category,” Adobe Digital Insights lead analyst Vivek Pandya said in a press release.

This article was featured in the May 2023 Strategy Insights, “The perfect purchase experience.” Read other articles related to this topic by downloading for free here.

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A slowdown in the housing market — the average rate on a 30-year fixed mortgage went over 7% on March 2, according to Freddie Mac — and inflation fears remain for the home improvement merchant, much like The Home Depot Inc., which reported last month.

Lowe’s online sales results

Online sales on Lowes.com increased 5% in the fourth quarter 2022 compared with a year earlier. Once again, this increase was partly due to strong appliance sales, CEO Marvin Ellison told investors during the March 1 earnings.

Overall sales were $22.44 billion for the fiscal fourth quarter ended Feb. 3, 2023. That’s up 5% from $21.33 billion for the comparable period a year earlier. Net earnings were $957.0 million, compared with $1.20 billion a year earlier.

For the fiscal year ended Feb. 3, net income was $97.05 billion, down from $96.25 billion from the comparable period in 2021. Net earnings for 2022 were $6.43 billion, down from $8.44 billion a year earlier.

In the fiscal fourth quarter of 2022, total sales declined 1.5%

Lowe’s is ranked No. 11 in the 2022 Digital Commerce 360 Top 1000 database.

Lowe’s offers Apple Pay, rolls out new delivery model

Ellison noted the home improvement merchant’s addition of Apple Pay as a payment option at checkout in Q4 “to improve conversion,” according to a Seeking Alpha transcript. The merchant also plans to make changes to its omnichannel shopping experiences, including a “rollout of our market delivery model for appliance and other big and bulky products.”

The new delivery model replaces what Ellison said was an “inefficient store delivery model.” Lowe’s intends such changes to help boost sales of “big and bulky product” categories such as grills, riding lawn mowers and stock cabinets.

The merchant services 10 geographic regions in the U.S. with more than 1,000 stores. 

Lowe’s Pro

Ellison told investors that the home improvement merchant surveyed its Pro customers in January 2023, and 70% said they were booked out with jobs in 2023 the same or more compared to 2022.  

While the outlook is cautious, Ellison said, Lowe’s is confident consumers will continue to invest in their home upkeep.

“Even if there is a modest decline in home prices, the level of equity built up during the pandemic would not be meaningfully eroded,” Ellison said. “And the housing stock continues to age with 50% of U.S. homes over 41 years old, the oldest since World War II.”

Ellison said Millennials continuing to invest in their home and baby boomers’ “increasing preference to age in place,” as well as continued remote work, will favor the merchant in the long run.

“And given the slowdown in housing turnover is driven by higher rates and low supply rather than demand, we continue to see a nationwide trend of trading up in place with consumers opting to upgrade their existing home to meet their evolving needs,” Ellison told investors.

Lowe’s earnings

For the fiscal quarter ended Feb. 3, 2023, Lowe’s reported:

• Online sales grew 5.0% for the quarter, compared with the same quarter in 2021.
• Net sales increased to $22.44 billion. That’s up 5% from $21.33 billion for the comparable period a year earlier.
• Profit was $957.00 million, compared with $1.20 billion a year earlier.

For the fiscal year ended Feb. 3, 2023, Lowe’s reported:

• Net sales were $97.05 billion, down from $96.25 billion from the comparable period in 2021.
• Profit was $6.43 billion, down from $8.44 billion a year earlier.

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

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Wayfair is No. 7 in the 2022 Digital Commerce 360 Top 1000, Overstock is No. 33.

Overstock and Wayfair sales are down 

Wayfair and Overstock reported a decline in sales in 2022 across the quarter and year.

Wayfair’s total net revenue for the quarter ended Dec. 31 decreased 4.6% year over year to $151 million. The company also reported a net loss of $351 million, significantly higher than the net loss of $202 million in the fourth quarter of 2021. 

Net revenue at Wayfair was also down for the 2022 fiscal year, dropping 10.9% over 2021. The net loss over the year was $1.3 billion.

Overstock’s earnings report was even more grim. Net revenue decreased 34% in the fourth quarter ended Dec. 31 to $405 million, though the net loss was a comparatively small $16 million. 

Net revenue for the full year was $1.9 million, a 30% decrease year over year. Overstock reported a net loss of $35 million for 2022, with about half of that loss in the fourth quarter.

Active customers declined

Executives at both furniture retailers said they had fewer active customers making purchases. Wayfair reported 22.1 million active customers in the fourth quarter of 2022, a 19% year-over-year decrease. 

Overstock is a relatively smaller operation, with 5.2 million active shoppers in Q4, a 36% decline year over year.

This trend is in line with consumer data Digital Commerce 360 collected in an April 2022 survey of 1,113 online shoppers. Three-quarters of respondents said they planned to buy less than half of home goods online, compared to 59% answering that way in 2021.

Consumers planned to pare down their online home shopping. 42% said they would spend the same amount on home goods as they had the previous year. Another 41% said they would spend less. Respondents also said they would spend less on outdoor furnishings, new furniture and home office setups than in 2021, with appliance repairs the only section seeing a slight increase.

Overstock aims at increasing sales to younger customers 

Even as overall sales decreased, mobile orders were a bright spot for Overstock. Overstock’s app adoption is growing “rapidly,” CEO Jonathan Johnson told Digital Commerce 360 in a phone interview. It’s now the company’s fastest growing sales channel, making up 52% of fourth quarter sales. The company expects to see at least the same level of app growth in 2023.

Overstock’s typical customer skews “older and more affluent,” Johnson said. App users show higher loyalty, have higher conversion rates and are also younger than the average customer overall, he said, though he declined to share specifics.

Overstock’s other strategy for reaching younger buyers involves influencers, Johnson said, and Overstock is spending more than ever before on marketing. The website partnered with influencers and brand ambassadors with far reach on social media, including HGTV star Tarek El Moussa.

Wayfair focuses on cutting costs

As Overstock concentrates on drawing in new customers, Wayfair has cut costs as a strategy to get back in the black. 

The furniture retailer has taken several measures to cut unnecessary costs, CEO Niraj Shah told investors in a Feb. 23 call. Wayfair laid off 1,750 employees in January, totaling about 10% of its total workforce including 1,200 corporate employees. These cuts were on top of earlier layoffs of 900 corporate workers in August to “reduce redundancies and remove excess management layers,” Shah said at the time. 

The company has also had a hiring freeze in place since spring 2022, and has been reducing advertising budgets that had grown beyond the small tests that they were originally intended for, Shah said.

Both companies are hoping 2023 will turn things around for the online furniture industry. 2022 was a “year we will not forget nor repeat,” Overstock’s Johnson told investors. 

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