Europe ecommerce, European online retail, Europe web sales

Lowe’s lower web traffic doesn’t hurt sales in Q1

Gretchen Salois — Thu, 25 May 2023 19:02:38 +0000

First-quarter 2023 earnings results are in. The heyday of do-it-yourself home projects has subsided — for now. A closer look at desktop web traffic that resulted in conversion was also down for heavy-hitters The Home Depot Co. (down 22.8%), Lowe’s Cos. Inc. (down 17%) and Overstock.com Inc. (down 33.6%), according to estimates by Similarweb, which monitors website traffic.

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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My Ikea shopping dream turns into a nightmare

Lauren Freedman — Fri, 19 May 2023 20:02:05 +0000

I have many jobs in life, and the most important is being a mother. As such, I headed to Brooklyn to move my daughter from her dorm to her first apartment. While it was physically exhausting at best, the biggest fiasco was my shopping experience at Ikea.

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:

Timely and accurate delivery is always critical but has a higher meaning when it comes to furniture.
Omnichannel choices and execution impact shopper decision-making.
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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Primark launches a new US website, but customers can’t actually use it to shop

Mary Meisenzahl — Fri, 19 May 2023 18:52:26 +0000

Primark just launched an updated U.S. website, but it still won’t sell items online.

The U.K.-based retailer says the website will display thousands of products along with “a fresh design, enhanced navigation, and a brand-new feature that allows customers to check stock availability and size in their local Primark store,” per Primark’s statement from May 17.

A virtual shop with no checkout

Primark is intentionally avoiding a traditional ecommerce business model, according to a press release. The website will “better connect the journey between searching online and then shopping in stores,” Primark said. The retailer refers to the website as a “virtual shop,” though there is no option to make purchases.

“Our ranges showcase our strong commitment to value, something we know matters more than ever to our customers right now,” Primark U.S. president Kevin Tulip said in a statement. “And our website will help us to shine a spotlight on the breadth of fashionable and affordable choices available in our stores across the United States — particularly as we continue to grow and open up new stores in new markets across the country.”

Primark says that not implementing ecommerce allows it to save money on logistics that can be reflected in lower prices.

The retailer debuted the new website in the U.K., Ireland, Spain and Germany before the U.S. launch. Web traffic increased 60% to 100% year over year, said George Weston, CEO of parent company AB Foods, in an April earnings call. About 20% of site visitors use the stock checker function. “We think that [it] is driving footfall into stores and we really are very pleased with the impact the new site is having,” Weston said.

Primark tested BOPIS

Primark has stepped into ecommerce before, but only slightly. In late 2022, the retailer tested a buy-online-pick-up-in-store function at 25 U.K. stores. The test was small, and only available for children’s clothing. Primark’s website crashed within a few hours of the launch, Reuters reported.

The click-and-collect trial, as Primark refers to it, went “sufficiently well” to another 32 stores in the U.K., Weston said in the same earnings call. Primark is seeing promising basket sizes and a lower return rate than expected, he said.

Primark floundered during the pandemic

Primark’s aversion to adopting ecommerce was a challenge during the COVID-19 pandemic. The retailer lost an estimated £540 million ($673 million) in a single quarter as sales fell and stores closed, The Financial Times reported.

Despite the new website and BOPIS tests, Primark isn’t considering fully embracing ecommerce. “At our price points and our basket sizes [online] doesn’t just take some of the margin; it takes all of it,” Weston told The Financial Times.

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Asos sales drop 8%; fast-fashion retailer attempts turnaround

Bloomberg News — Wed, 10 May 2023 15:26:55 +0000

Asos Plc sales fell and its loss grew in the first half as the British online retailer tried to cut inventory and excessive discounting.

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

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

Aside from Asos sales challenges

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

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

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

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

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

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

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Amazon revenue rises 9% in Q1: Ecommerce sales fall slightly year over year

Paul Conley — Thu, 27 Apr 2023 20:05:45 +0000

Amazon.com Inc. reported first-quarter total sales of $127.4 billion, a 9% jump from a year earlier, even as the ecommerce giant announced additional layoffs across its operations.

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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eBay GMV and active users decline for eighth consecutive quarter

Paul Conley — Wed, 26 Apr 2023 19:45:00 +0000

EBay Inc. said its gross merchandise volume, which is the value of all goods sold on the site, fell 5% to $18.4 billion in the first quarter of 2023, the eighth consecutive period in which that key metric number dropped.

The number of active buyers on the marketplace also fell — dropping 7% to 133 million during the period ending March 31, 2023. That too is the eighth consecutive quarterly drop.

Revenue rose 1% to $2.51 billion from $2.48 billion a year earlier.

EBay ranks No. 6 in the 2023 Digital Commerce 360 Online Marketplaces Database. A drop in eBay sales in recent quarters pushed the San Jose, Calif.-based marketplace from the No. 5 slot it held in the 2022 Database.

CEO Jamie Iannone is trying to reduce expenses to align with declining sales. In February, eBay announced it would cut about 500 employees, or 4% of its workforce.

EBay aims to sell more luxury items like watches to boost revenue while also offering refurbished items to appeal to price-conscious shoppers. In an effort to lure collectors, eBay provides a service to trade and authenticate trading cards, collectible sneakers and other items. It has been building climate-controlled vaults to store them.

In March, it announced a new “verified condition” badge for used heavy construction equipment sold on the site to assure buyers the machinery has been inspected.

eBay sales: Q2 outlook

EBay said it expects sales growth in the second quarter. The marketplace forecast revenue between $2.47 billion and $2.54 billion, an increase from the $2.42 billion reported in the same period a year ago. Analysts had estimated $2.43 billion in revenue in Q2.

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

The eighth consecutive quarter in which both GMV and active users fell.
Revenue of $2.51 billion, an increase of 1% year over year.
$841 million of operating cash flow and $709 million of free cash flow from continuing operations.

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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UK-based Primark expands online click and collect service as sales grow

Bloomberg News — Tue, 25 Apr 2023 16:26:00 +0000

Associated British Foods Plc is extending Primark’s click and collect trial across London later this year. The move is in efforts to build an online business for the in-demand budget fashion brand.

Primark will allow customers to buy kidswear and nursery items online and collect from 32 London stores this summer. The move comes as the retailer’s sales rose 19% in the first half with cash-strapped consumers buying £8 ($10) mini dresses and £20 jackets.

Strong sales at Primark are offsetting some of the steep cost inflation for garments and shipping, although the group said higher wage costs and technology investments mean the retailer’s margin in the second half will be largely the same as in the first. It expects an 8.3% margin for the retailer for the full year.

AB Foods, a conglomerate which owns a range of businesses from grocery to agriculture, said full-year profit in its sugar business is likely to decline as a result of much lower production in the U.K. However, overall full-year profit for the group is still expected to be in line with last year.

AB Foods shares have risen 27% over the past year.

The retailer started a click-and-collect trial for its website late last year in the northwest of England, Yorkshire and north Wales. It was the first time that customers could buy from the company online. The retailer struggled during Covid lockdowns because stores were forced to close for months and the business had no e-commerce site to fall back on.

Primark to expand in southern US

Primark is growing its footprint in the southern U.S. with a new warehouse. The retailer said during its earnings call with investors on April 24 that it intends open new stores in Texas. Primark’s Jacksonville, Florida-based distribution center will support stores located in the southern U.S.

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Ikea is investing $2 billion to grow its US footprint

Mary Meisenzahl — Fri, 21 Apr 2023 16:22:23 +0000

Ikea is 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.

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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Nike Digital sales account for 27% of total revenue in Q3

Abbas Haleem — Wed, 22 Mar 2023 17:18:14 +0000

Nike Inc. ecommerce sales now represent 27% of total sales. That’s triple Nike Digital sales’ share of total sales since the retailer’s fiscal 2019, according to chief financial officer Matthew Friend.

Friend said on the retailer’s earnings call March 21 for the fiscal third quarter ended Feb. 28, 2023, that Nike Digital sales grew 24%. That, plus 19% growth at Nike physical stores, led to 22% Nike Direct growth.

Nike Digital refers to sales through the retailer’s websites and apps. Nike Direct refers to its direct-to-consumer sales.

Third-quarter total revenue grew to $12.39 billion. That’s up 14% compared with the prior year’s third quarter. Nike Direct sales in the quarter reached $5.3 billion. That’s up 17% year over year.

Digital sales for the retailer’s namesake brand increased 20% year over year. Nike-brand revenue totaled $11.766 billion, with Converse-brand sales accounting for the remaining $612 million.

Nike ranks No. 10 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Nike Digital sales growth started with Amazon exit

The retailer stopped its first-party sales on Amazon.com in December 2019.

Less than a year after exiting the marketplace, online sales increased 75% in the retailer’s fiscal Q4 ended May 2020. Online sales were approximately 30% of total revenue, Nike reported at the time. Nike Digital sales had reached $5.5 billion for the full year.

And that trend has been ongoing, said Jim Corridore, senior insights manager at Similarweb. Similarweb, a digital intelligence platform, measures web traffic for more than 100 million websites.

He told Digital Commerce 360 that although Similarweb can’t see exactly what shoppers bought directly from Nike or the price point of those items, it can track how many people have gotten to the checkout page. Checkout traffic, or the number of users who have gotten to the sign-out page and received a “thank you” confirmation, grew 8.5% year over year for Nike in its fiscal Q1 2023, which ended in August. It also grew 20% from the company’s fiscal Q4 2022, which ended in May.

A Similarweb analysis of traffic to Nike’s main landing page, Nike.com, also showed 5.1% year-over-year growth for the fiscal first quarter ended August 2022. However, compared with the fourth quarter ended May, traffic was only up 0.02%.

“People are still interested in going on Amazon and buying Nike shoes, and there has emerged a market to fulfill those needs,” Corridore told Digital Commerce 360. “Third-party sales on Amazon have spiked to the point where it’s almost as high as first-party sales were in December 2019, when Nike exited the market.”

Amazon.com Inc. is No. 1 in the Digital Commerce 360 Top 1000 database. It is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Nike Digital sales breakout by region

North America

Nike Digital sales in North America grew 25%, though the retailer did not provide a dollar amount. That fueled 23% Nike Direct growth as the retailer’s total revenue in the region grew 27% to $4.913 billion. Friend attributed the growth to holiday sales.

Footwear accounted for $3.322 billion in the quarter. That’s up 31% from $2.532 billion in the year-ago quarter.

For the nine months ended Feb. 28, total sales in the region reached $16.253 billion. That’s up 23% from $13.238 billion in the year-ago period.

Europe, Middle East and Africa (EMEA)

Nike Digital sales in the EMEA region grew 42%. Friend attributed that growth to Western European markets, specifically citing the United Kingdom. Nike Direct sales grew 29% in EMEA as the retailer’s total revenue grew 26% in the region to $3.246 billion. That’s up 17% year over year from $2.779 billion.

For the nine months ended Feb. 28, total sales in the region were $10.068 billion. That’s up 9% from $9.228 billion in the same period the year before.

The retailer has lowered fulfillment costs in the region by reducing split shipments and adding pickup points, Friend said.

When it comes to membership and marketing, Friend said, “if we’ve got more members coming in through the top of the funnel who are more engaged and buying more frequently, we should start to see an improvement in our ROAS or return on ad spend from a digital perspective and give us a lot of confidence that we’re building a moat to be able to continue to serve and grow our digital business.”

Greater China

Nike Digital sales declined 11% in the quarter, though Nike Direct grew 3%. Friend attributed this to consumers shifting back to physical stores as China lifted COVID-19 restrictions. Revenue from the region was $1.994 billion. That’s down 8% from $2.160 billion in the year-ago quarter.

For the nine months ended Feb. 28, total sales in the region were $5.438 billion. That’s down 9% from $5.986 billion in the same period the year before.

This was the market in which Nike sales declined across the board in the third quarter, as well as year to date.

Asia Pacific & Latin America (APLA)

Nike Digital sales grew 23% and Nike Direct 22% as the retailer’s revenue increased 15% in the quarter in APLA.

The retailer’s equipment sales declined to $53 million. That’s down 15% from 63 million in the year-ago quarter. It’s also the only revenue decline in the quarter outside the retailer’s Greater China market.

Revenue in the region totaled $1.601 billion in the retailer’s fiscal third quarter. That’s up 10% from $1.461 billion.

For the nine months ended Feb. 28, total sales in the region were $4.735 billion. That’s up 11% from $4.273 billion in the year-ago period.

Nike Q3 2023 earnings summary

For the fiscal third quarter ended Feb. 28, Nike Inc. reported:

Third-quarter revenue increased to $12.39 billion. That’s up 14% from $10.87 billion in the previous fiscal third quarter.
Revenue in North America was $4.91 billion. That’s up 27% from $3.88 billion in the year-ago quarter.
Nike Direct sales increased 17% to $5.3 billion.
Nike Digital sales increased 20% and represent 27% of total sales.

For the nine months ended Feb. 28, Nike Inc. reported:

Total revenue was $38.392 billion. That’s up 11% from $34.476 billion in the year-ago period.
Total revenue in North America was $16.253 billion. That’s up 23% from $13.238 billion in the year-ago period. It’s also more than 50% greater than the revenue from the retailer’s next-largest market: Europe, Middle East & Africa.
In EMEA, total revenue grew 9% to $10.068 billion. It was $9.228 billion in the year-ago period.

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

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H&M is launching an online resale platform with ThredUp

Staff and Bloomberg report — Tue, 14 Mar 2023 18:38:04 +0000

H&M is launching a resale platform with ThredUp Inc., as global apparel companies try to make a dent in the clothing waste they produce and seize on a potential new source of revenue.

H&M is No. 11 in the Europe Database, Digital Commerce 360’s ranking of the region’s largest online retailers by web sales.

H&M’s resale market will launch immediately

The retailer will start its first resale platform in the U.S. market, H&M Pre-Loved, on March 14. The launch includes 30,000 items of used women’s and kids’ clothing and accessories on hm.thredup.com. The Swedish apparel company is the largest retailer to sell used clothing and accessories via ThredUp’s resale platform. ThredUp already works with several dozen other brands and has launched resale programs with J. Crew and Kate Spade in 2023.

“We need to take responsibility for the impact fashion has on climate and the environment,” Abigail Kammerzell, head of sustainability for H&M North America, said in a statement. Business models such as this can help “reduce and limit this negative impact, while continuing to deliver fashion and style for our customers,” she said.

In February, H&M announced a program to sort used clothing in Europe for resale and recycling.

Customer demand is unclear

It’s too soon to say whether resale programs will ultimately lead firms to produce less clothing because of declining demand for new goods.

Digital Commerce 360 asked customers about these preferences in a September 2022 poll of 1,064 shoppers. 13% said that they had purchased a previously owned product from an online consignment seller. 14% said they had made purchases based on a retailer’s sustainability policies. About one-third of respondents said they never used these services and had no plans to in the next year.

For companies such as H&M, it can be easier and less costly to use the existing technology and logistics of resale platforms powered by ThredUp and its competitors, rather than creating a service on their own. “Resale-as-a-service” is a source of revenue for ThredUp in addition to what it earns selling used items on its own marketplace website. ThredUp doesn’t disclose how much revenue it generates selling through its business model.

H&M didn’t reveal its forecast for potential revenue from the sale of its used items. Many companies that have launched resale platforms recently have said that initial revenue is likely to be minimal but that it will grow over time as the market expands.

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