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Scott Dushane, director of IT, Fairmount Tire & Rubber

“One of our biggest differentiations is when we answer the phone, it’s on the first couple of rings, every single time,” says Scott Dushane, director of IT.

But while that helps build personal relationships with customers, it’s not a scalable-enough business strategy to meet Fairmount’s goals. And those goals are ambitious — like providing an Uber Eats level of a transparent order and delivery service.

“Just like you can now go to Uber Eats, order a burrito, then know the driver’s name that’s going to pick up that burrito and then hand it to you in exactly 23 minutes, we want that same experience to happen for wholesale tires,” Dushane says.

“It’s a much less sexy industry, but the genie’s out of the bottle — we need to provide the same level of service and supply chain transparency that Uber is providing.”

Making strides in service and sustainability

Fairmount Tire & Rubber primarily serves the four-state region of Arizona, California, Nevada and Utah. It uses its home-grown self-service ecommerce site integrated with an online delivery management system to improve and expand its business. At the same time, it is drastically cutting out paper documents, increasing its sustainability and operating efficiency, Dushane says.

He says Fairmount is making significant strides in upgrading how it engages B2B customers online, matching buyers with the particular tire SKUs they need from a long list of options — such as the many tire brands, sizes, and applications like tread patterns for different types of weather — and providing transparency in deliveries, including same-day service.

Fairmount uses an online delivery management system that has streamlined and expedited the distributor’s delivery system and lets customers know through a GPS-based mobile app what tires are coming and when.

The delivery management system, from Descartes Systems Group, integrates through Google Cloud with Fairmount’s digital commerce platform and other technology systems and applications, including enterprise resource planning, product information management, customer relationship management and warehouse management.

Dushane says that, until recently, the most common call Fairmount’s agents received was “Where’s my tires?” But with the new system, Fairmount can replace those inbound customer service calls with outbound sales “rainmaker” calls often made by the same agent.

“This is real money,” he says.

No more shuffling paper for invoices

The old system had relied heavily on paper documents about customer orders and available delivery trucks, resulting in a difficult process for planning order fulfillment and delivery.

“For many years, it was a stack of papers on someone’s desk. And you would do the old shuffle and figure out how to route and how to build trucks,” Dushane says.

Fairmount now uses its integrated ERP, order management and delivery management systems to automatically coordinate how orders are delivered with the most efficient use of trucks and routes, he adds.

“It is an unbelievably difficult problem to route trucks throughout a city, like mathematically,” he says, adding, “Descartes comes up with sort of magical solutions that [we] never came up with for the last 30 years of running the same routes.”

As customer orders come into Fairmount’s B2B ecommerce login customer portal, at b2b.fairmounttire.com, the tire distributor’s financial software generates electronic invoices that the delivery management system allocates to delivery trucks based on their availability and capacity.

One advantage of the new system is replacing a system that used to require three sheets of paper for each invoice. When drivers make deliveries, they use mobile devices stored with order details and e-invoices to receive customers’ digital signatures and generate delivery confirmation notes.

“We totally eliminated paper,” Dushane says.

Reworking delivery routes for more service and sales

In addition, Fairmount speeds up deliveries by using its software to arrange multiple orders on the same truck in a way that makes them faster to unload at each customer’s destination.

And that has opened the door to more sales opportunities as well as greater efficiency, Dushane says.

“We have been able to start to run second and third routes because of Descartes … because we know when the drivers will be coming back and what the trucks can be filled up to — there’s no obfuscation,” he says.

“We have fixed costs,” he adds. “So let’s use those fixed costs to the best of our ability.”

This article is included in a special report covering B2B digital technology trends and a preview of the 2023 EnvisionB2B Conference & Exhibition.

Scott Dushane will speak during a panel and workshop on order management, fulfillment and delivery operations at the 2023 EnvisionB2B Conference & Exhibition.

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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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Coincidentally, Ikea recently announced that it’s investing more than $2 billion in the U.S. for growth over the next three years. 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.

All of this is well and good. Ikea has a lot of work to do to optimize that opportunity. Product design and sharp prices are mere starting points. Logistics and customer service are the real growth drivers for customer retention.

When Digital Commerce 360 and Bizrate Insights asked 1,060 online shoppers in a conversion survey about which retailer policies and initiatives are most likely to lead to an order, fast shipping was No. 1 at 61% and past experience with the retailer came in No. 3 at 45%. I have found over the years that trust is the foundation of the customer-retailer relationship and that was sorely lacking as shared in my story below.

Chicago retail lessons

Maybe I’m spoiled. Perhaps they could take a lesson from a retailer who did right by the customer, Crate & Barrel. Its CEO, Gordon Segal had an expression, “retail is in the details,” which has real meaning in this scenario. A second Chicagoland area retailer, Abt, has a motto on every truck that frequents every neighborhood it serves, and it upholds it. “Our Goal: Complete Satisfaction, Serving Customers Since 1936.” Lastly, I can’t help but invoke the age-old adage that defined Marshall Fields, a store where I spent some of my formative years as a buyer, “Give the Lady What She Wants.”

Now I’m going to tell my story. Although it may be a familiar one, it bears repeating to suggest what it takes to do retail right. No one ever said it would be easy, but this type of retail torture has got to end if we are to maintain ecommerce and retail momentum. As part of this discussion, I’m going to integrate some of our Digital Commerce 360 and Bizrate Insights findings that illustrate how my story aligns with the 1,070 online shoppers surveyed in another story on home goods from April 2023.

I hope Ikea and all retailers will be paying attention to three pieces of advice:

1. Timely and accurate delivery is always critical but has a higher meaning when it comes to furniture.
2. Omnichannel choices and execution impact shopper decision-making.
3. Customer service counts across all channels and should be foolproof.

One shopper journey

A month in advance of needing the apartment furniture, like 44% of our surveyed shoppers, I made selections online at Ikea ensuring that products were available in Brooklyn and that delivery would be an option. And yes, like 31% of surveyed shoppers, I encountered out of stocks. No issues.

I then shared my choices with my daughter, and we added a few items to round out our order. My first order of business after arriving at LaGuardia Airport was visiting the Red Hook Brooklyn store. As our survey indicated, 60% of online shoppers still wanted to see their home goods selections in person, and we too made the trip. We needed our furniture quickly, as did 41%. And while we didn’t want to pay for shipping like 40%, I knew it was likely I’d be paying for delivery. We road tested the chairs and mattresses like 31% of respondents. We were ready — or so we thought. To say no one was working at the store feels like an understatement. I saw fewer than five employees in that store visit, plus there were two individuals at checkout when we hand-carried a few items. This is where the nightmare began.

That night, after six hours of moving, I went back to my hotel to place the order, and Ikea appeared to be delivery-challenged. Upon clicking into potential delivery options, each time it said no delivery available or that one of the items in the cart was unavailable to deliver and needed to be removed. Angry would be an understatement. I could barely sleep thinking I would have to start all over again making selections from another retailer as time was my most precious commodity.

So, I went the old-fashioned route and my only positive experience came with the customer service representative who took my order and scheduled delivery for Saturday to the new apartment.

We picked up the desk the next day at click and collect, which was fairly easy — and comparable to 21% of survey participants.

Delivery misses the mark

Come Saturday, when I had already returned to Chicago, I received an email saying, “your order was not delivered.” They suggested the customer didn’t answer the phone and wasn’t home. The truth was there was no missed call and she was home. My favorite part was their message that said, “things don’t always go as planned.” Nothing like a little marketing spin on a bad situation.

I fretted and my daughter called to reschedule for Thursday. An hour later, I received another email that made me think she was not really rescheduled. I had no confidence in this delivery, and more importantly, I had lost all confidence and respect for Ikea.

I then spent an hour on the phone with a gentleman from the logistics company who was both competent and honest. He said I wasn’t alone, that supervisors don’t answer the phone on weekends and that they have a lot of problems with this company. He gave me the names of the supervisors and suggested I send an email with the sordid details and call at 8 a.m. the following day. I did both and was ensured my order was to be delivered on Thursday.

Of course, I felt I deserved some compensation and Ikea did remove the delivery fees, which was a no-brainer. I also felt more was due but the customer service representative reminded me of the limitations that constrained her. She couldn’t offer a credit but could give me a $100 gift card, which I could convert at a store. I, of course, had no intention of ever purchasing from Ikea again, but I took it anyway. It was basically sheer torture at this point.

When participants were asked how important the following features and functionalities were when shopping for everything home-related online and had the ability to give five answers, the top five were as follows.

• Customer ratings and reviews: 52%
• Access to pricing: 51%
• Ability to compare products: 35%
• Ability to zoom or see many product details: 35%
• Accurate delivery windows that indicate when items are actually going to arrive: 30%

I agree with their selections, but to me, accurate delivery windows would rise to the top of the list. Perhaps these shoppers have never had a poor experience.

When a transaction goes smoothly with a retailer, it’s a given. When an order goes wrong, it is a challenge and an opportunity for a retailer to reconsider what it takes to make it right. It is also a chance to reinvest and reestablish the trust that was lost and to move toward a real customer relationship.

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

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Target sales

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

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

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

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

Organized retail crime

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

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

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

Margins and inventory

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

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

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

Outlook

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

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

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

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

Q1 2023 Target earnings

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

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

Bloomberg News contributed to this report.

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

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In 2019, Black Wolf Skincare invested in fulfillment software from ecommerce fulfillment services vendor ShipHero. At the time, Black Wolf processed about 1,000 orders per month.

Alex Lewkowict, co-founder, Black Wolf Skincare

“By my calculation, even at our volume of 1,000 orders a month, we saved more than $2 in shipping costs [per order] using their ecommerce tool,” he says. The tool helped Black Wolf Skincare find the cheapest available shipping carrier, he says.

“The plan started around $1,800 a month,” he says.

Using ShipHero’s software tool “was a no-brainer for us that paid for itself right away,” he says.

Shipping price fluctuations

Another pain point was price fluctuations, Lewkowict says. The men’s skincare brand could no longer ship from its one warehouse. Transit times were too slow or too expensive to ship to anywhere in the U.S., he says.

By the end of 2020, demand grew to more than 17,000 orders a month, Lewkowict says. And by the end of 2021, orders averaged about 25,000 a month. This prompted the retailer to outsource its entire shipping and fulfillment processes to ShipHero, he says.

By December 2022, Black Wolf Skincare averaged more than 40,000 orders a month.

With ShipHero, Black Wolf Skincare could inbound ship directly into any of its warehouses. Black Wolf Skincare manufactures its products in Florida.

Black Wolf sends its products to ShipHero’s West Palm Beach, Florida, facility. ShipHero then distributes shipments across its network of warehouses and carriers to ensure the fastest delivery times. As a result, Black Wolf was able to reduce the time it takes to ship orders to customers.

“Our average shipping time to customers went from five plus days to under three days for the same cost,” Lewkowict says.

That includes next-day shipping to anywhere in Texas, Florida, Georgia, New York and New Jersey, he says.

ShipHero ships Black Wolf’s orders using local carriers, Lewkowict says. “Customer satisfaction goes up as wait times decrease,” he says.

“I think a lot of brands are relying on 3PLs to bring in expertise that isn’t their expertise,” says Maggie Barnett, chief operating officer at ShipHero.

“It’s really tough to run a 3PL,” she adds. Third-party logistics services (3PLs) are the outsourcing of ecommerce logistics processes to a third-party company like ShipHero. 3PLs handle inventory management, warehousing and fulfillment operations.

“Companies want to concentrate on making the best product possible, not know what a routing guide is or worry about just-in-time delivery or that UPS is limiting your pickups, et cetera,” Barnett says.

Selling on Amazon makes a difference

Black Wolf Skincare began as a direct-to-consumer brand. But in mid-2020, Lewkowict says it realized that the brand was losing sales by not selling on Amazon.com Inc.

“We were very against going on Amazon because we wanted to have value in owning the customer relationship,” Lewkowict says.

That viewpoint changed. A consultant told Black Wolf Skincare that consumers were searching for the brand on Amazon directly or clicking on Google ads and Facebook ads and then going to search for the brand on Amazon.com. But since Black Wolf wasn’t selling on Amazon, consumers opted for products by other Amazon sellers/competitors.

“Instead of finding our product on Amazon, they’d see competitor options that were also advertising using the same keywords,” Lewkowict says.

Black Wolf Skincare launched on Amazon in 2020. Amazon sales accounted for about 10% of Black Wolf Skincare’s overall sales, he says. Since then, that percentage has grown. Selling on Amazon has “added a tremendous amount of volume and revenue,” he says, without revealing more. The average order value for Black Wolf Skincare’s DTC website and Amazon store is about $65, he says.

Lewkowict says the men’s skin care brand has capitalized off Amazon traffic. Some customers only want to buy off Amazon, he says.

“So, whether they’re seeing our TV ads or a Facebook ad, they’ll always go to Amazon to comparison shop,” Lewkowict says. “Our strategy here is to encourage those Amazon shoppers to go and buy on Amazon. Traffic that comes off of Amazon helps our ranking [on the marketplace search results]. The more shoppers search for our products, the better our ranking.”

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Maggie Barnett, chief operating officer, ShipHero

“What we’ve seen with such a tight labor market in the U.S. is that we’re able to supplement [employment] gaps with robotics,” Barnett says.

ShipHero is a shipping and logistics vendor for more than 5,000 ecommerce brands and third-party logistics (3PL) providers. In 2021, it began using the inVia Logic Warehouse Execution System from inVia Robotics, which sells ecommerce fulfillment automation systems. The software system coordinates how materials, workers and equipment move throughout ShipHero’s warehouse.

In 2022, ShipHero added inVia Picker robots to help warehouse workers during the picking process. The picking process is where workers find and bring items to a central location on the warehouse floor. At the center of the warehouse is one or more robot stations. The inVia robots complete the fulfillment process, freeing up workers to complete other tasks.

Simplifying warehouse flow

InVia simplified the scanning step of ShipHero’s fulfillment process. At its Jacksonville, Florida, warehouse, containers needed to move and be scanned easily.

Lior Elazary, founder and CEO, inVia Robotics

“Scanning these items takes a while,” says Lior Elazary, founder and CEO of inVia.

Instead, warehouse workers now place items onto an input rack that feeds the robots. The robot picks up the containers and scans them.

Robots scan inventory and send it where it needs to go, Elazary says. This removes the task from warehouse workers.

The automated scanning/picking replenishment process was implemented within a couple of hours, says Kristen Moore, chief marketing officer at inVia. InVia’s robotics-as-a-service subscription model includes software updates that inVia performs remotely.

Employees are now at the wall picking 425 units per hour, according to ShipHero. That is up from 150-200 units per hour before using inVia, Barnett says.

ShipHero warehouse employees no longer have to walk back and forth in between seven to 10 aisles. Instead, they can now grab what they need from a single 72-foot-long aisle.

Software projects demand, speeds up fulfillment

In April, ShipHero’s inventory team began using data that tracks SKU velocity. This is how frequently a SKU item is picked over a certain period of time. The software predicts what amount of inventory is needed to meet projected demand.

After success at its Florida warehouse, ShipHero expanded inVia integration. ShipHero now uses the robotic picking system in its Allentown, Pennsylvania, and Las Vegas warehouses.

“People don’t want to own warehouses,” Barnett says. “They don’t want to take out leases and make sure there are always a certain number of people working in the building on any given day.”

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“Our biggest challenge is absolutely effective inventory utilization,” Wilberger says.

Vince turned to NewStore, a cloud omnichannel software vendor. Over approximately the last 18 months, the retailer experienced a 7% increase in buy online, pick up in store (BOPIS) orders.

Heather Wilberger, chief information officer, Vince LLC

Before using the software, “we weren’t able to track an increase for BOPIS at all,” Wilberger says. NewStore connects directly via API with Vince’s ecommerce software from Salesforce Commerce Cloud.

Software allows Vince to fulfill online orders in store

Vince uses store fulfillment across its 66 physical locations for online orders. Vince’s average order value for ecommerce is 32% higher compared with in-store AOV.

On average, 40% of the retailer’s total orders ship from these locations. However, during busy periods, stores fulfill fewer orders, Wilberger says. This is particularly true during the holiday season spanning from November through December. In Q4 2022, Vince’s fulfillment rate dropped to 23%, Wilberger says.

“Foot traffic is much higher during these times, so associates do not have the bandwidth to pick, pack and ship orders from other [store] locations,” Wilberger says. “Their top priority is helping customers in store, which causes some store managers to turn off capability for a short period of time.”

Toggling in-store order fulfillment on and off

Fulfilling online in store is helpful, but it is important to pull back when necessary. NewStore’s software allows the retailer to turn in-store fulfillment options on and off. This avoids tying up staff to fulfill orders from store during high demand periods, she says.

“We’ve pulled those levers during times of high demand, and it’s been received really well among our teams,” Wilberger says.

The holidays are a good example of “pulling the lever” on and off to keep staff free where needed, Wilberger says.

“We really have to keep our eyes on those levers to understand how we’re fulfilling orders,” Wilberger says. “We want to optimize sales in any way we can that also benefits the customer. The customers wants what they want. We want them to get it as soon as they can. Having that ability to toggle back and forth where our folks can fulfill orders from the store has been absolutely fantastic.”

An endless aisle shopping experience in store

Vince can also offer customers an endless aisle experience, Wilberger says. A shopper searching for a popular item in store might be open to other colors or sizes — even if those colors are not available in stores. Endless aisle allows sales associates to suggest options available at other store locations or distribution centers. They can then send those items directly to the customer, Wilberger says.

Vince knows certain classic styles are the brand’s cornerstone, Wilberger says, adding that’s why it’s important to plan ahead. Vince stocks up on popular SKUs to ensure those items are available during surges in demand, she says.

During the winter months, Vince customers buy sweaters, Wilberger says. Knit and cashmere sweaters account for 20%-25% of Vince’s direct-to-consumer revenue, she says.

“We can understand that perhaps a store in the Los Angeles area has the cashmere funnel neck sweater in the color the shopper wanted,” she says. “We can ship it out of that store, which reduces some of our shipping costs because it’s a localized shipping event occurring.”

“It gives us an opportunity to sell to the customer or not lose the sale,” Wilberger says. “We can overnight it and have that plush funnel cashmere at the consumer’s door the next day.”

These abilities have been critical to Vince as the economy bends and turns, she says.

“We rise to what the consumer demand looks like for our products,” Wilberger says. “And warehouse space is expensive.”

Vince is No. 856 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest online retailers by web sales.

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Its loyalty program, the Neighbor’s Club, surpassed 30 million members last week, Lawton said. During the quarter, he said, Tractor Supply opened its ninth and largest distribution center, located in Navarre, Ohio.

Tractor Supply net sales for the fiscal Q1, which ended April 1, 2023, increased to $3.30 billion. That’s up 9.1% from $3.02 billion in the year-ago quarter. The retailer attributed the growth to its acquisition of Orscheln Farm and Home in the fall, new store openings and growth in comparable store sales.

Comparable store sales increased 2.1%, lower than the increase in the year-ago Q1 (5.2%). Tractor Supply attributed the smaller comparable sales growth to a 2.8% average ticket growth offset by a comparable average transaction count decrease (0.7%).

Tractor Supply ranks No. 102 in the Top 1000, Digital Commerce 360’s database of the largest North American online retailers by web sales.

Omnichannel focus at Tractor Supply

Tractor Supply fulfills 75% of ecommerce transactions through a store location, Digital Commerce 360 reported recently.

“A large percentage of our ecommerce orders — over half — are picked up either in the store or curbside,” said Letitia Webster, senior vice president of ecommerce, omnichannel and master data at Tractor Supply.

With nearly 2,100 store locations, Tractor Supply’s customer is increasingly a hybrid shopper that shops in store and orders online, Webster said.

Tractor Supply Co. earnings

In the fiscal first quarter ended April 1, 2023, Tractor Supply reported:

• Tractor Supply net sales increased to $3.30 billion. That’s up 9.1% from $3.02 billion in the year-ago quarter.
• Gross profit increased 10.7% to $1.17 billion from $1.06 billion in the prior year’s first quarter.
• Mobile app sales account for more than a fifth of digital sales.

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

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Amazon’s total sales include its own product sales, sales from its marketplace, as well as marketplace seller fees, advertising fees and revenue from Amazon Web Services (AWS).

Amazon reported net income of $3.2 billon in the first quarter, a dramatic swing from the $3.8 billion loss a year earlier. Ecommerce sales dropped 0.06% year over year to $51.093 billion in Q1.

Amazon revenue breakdown

Amazon’s results suggest the company’s efforts to reduce costs are starting to bear fruit. Operating expenses increased 8.7% in the quarter, the slowest pace in at least a decade. The company’s North America segment was profitable on an operating basis for the first time since late 2021.

Amazon Web Services generated $21.4 billion in sales, a 16% rise from a year earlier and higher than the $21.2 billion analysts had expected. The cloud-computing division is the company’s largest source of income. Despite AWS’  better-than-expected Q1 performance, Amazon said it began laying off employees in the AWS operation amid slowing sales growth in its most profitable division.

That 16% rise from Q1 2022 is the slowest growth rate reported since Amazon began breaking out the segment and the fifth consecutive quarter in which growth slowed year-over-year.

Earlier this year, chief financial officer Brian Olsavsky warned that AWS growth would slow in 2023.

Advertising sales rose more than 21% to $9.51 billion in the quarter. Revenue from third-party seller services — which include commissions, shipping services and other fees that Amazon collects from sellers on its marketplace — jumped 17.7% to $29.8 billion in Q1.

“Amazon did what it needed to do in Q1 by reversing — or at least stalling — its most troublesome declining growth trends,” said Andrew Lipsman, an analyst at Insider Intelligence, told Bloomberg News. “Amazon’s stronger-than-expected performance for its key profit centers of AWS and advertising indicate that the enterprise and the digital ad sectors may be turning the corner.”

Amazon is No. 1 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by sales. It is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Amazon announces BNPL option

Several hours before releasing its earnings, Amazon announced a new buy-now-pay-later option called Citi Flex Pay on Amazon Pay. Under the program, eligible Citi credit card members can pay over time with Citi Flex Pay when using Amazon Pay during checkout at participating online retail sites. The deal with Amazon marks the first time Citi credit card members can use Citi Flex Pay through a digital wallet.

Amazon already offers BNPL through Affirm. Amazon also accepts Apple Pay, and in March Apple announced a BNPL plan of its own.

Operational changes at Amazon

Amazon has made several moves in recent months to cut its operating costs, most notably by laying off thousands of workers from its ecommerce unit. In early January, CEO Andy Jassy said planned job reductions totaled 18,000 workers. That’s a full 1% of Amazon’s workforce — and well above earlier expectations that Amazon would slash 10,000 jobs.

The Seattle-based company employed almost 1.47 million people as of March 31, a decrease of 10% from the period a year earlier and down from more than 1.54 million workers three months earlier.

Second-quarter guidance on Amazon revenue

Seattle-based Amazon said it expects sales in the current quarter to reach between $127 billion and $133 billion, keeping in line with analysts’ forecasts.

Other news from the first quarter

On April 26, news site The Verge reported Amazon had decided to close its Halo division, which sold fitness- and sleep-tracking devices. Amazon had stopped selling its three Halo products and plans to lay off portions of the Halo team, the news site said.

“We have made the difficult decision to wind down the Halo program, which will result in role reductions,” Melissa Cha, Amazon’s VP of smart home and health, told staffers in an email The Verge obtained.

Some analysts said Amazon has more work to do. “We keep waiting for profit and cash flow to turn here,” Stefan Slowinski, an analyst at BNP Paribas Exane, told Bloomberg. “With all of the headlines on restructuring and closure of businesses, we’re really not getting that coming through in the numbers.”

Amazon earnings

For the fiscal first quarter ended March 31, Amazon reported:

• Amazon revenue from third-party seller services of $29.8 billion. That’s 17.7% increase from the comparable quarter of 2022.
• $9.5 billion in revenue from advertising services, a 21% jump from a year earlier
• Operating cash flow of $54.3 billion for the trailing twelve months, an increase of 38% from the $39.3 billion for the trailing twelve months ended March 31, 2022.

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

Bloomberg News contributed to this report.

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

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