Abercrombie & Fitch Co. (No. 60)

Abercrombie net sales were up 3% year over year to $836 million. The retailer did not break out ecommerce sales. 

“On digital engagement, our team has leveraged social media platforms to showcase our lifestyle offering, where we are able to highlight key must-win products for us in an authentic way. Social has proven to be a great channel for our target millennial customer,” CEO Fran Horowitz told investors.

American Eagle Outfitters Inc. (No. 55)

American Eagle ecommerce revenue was down 4% year over year in the first quarter, while in store revenue was up 5%. Overall revenue grew 2%, the retailer reported.

“Customers returned to in-person shopping and demand continued to normalize from elevated builds during the pandemic,” chief operating officer Michael Rempel told investors in a call. Leaders at American Eagle are working on strategies to use analytics to increase engagement, traffic, and conversion, Rempel said.

Bath & Body Works Inc. (No. 57)

The health and beauty retailer finished expanding its BOPIS rollout across the U.S. in Q1, CEO and director Gina Boswell told investors on May 18. Bath & Body Works plans to increasingly connect its digital and in-store offerings, Boswell said, because customers who shop through both channels spend three times more than customers who only use one. As of May 18, just 15% of customers shop through both channels, she said.

Boot Barn Holdings, Inc. (No. 328)

Ecommerce sales were down 18.4% in Boot Barn’s fourth quarter. “We believe these declines are a result of competitors having a stronger in-stock position compared to last year and expect this softness will be transitory,” CEO and president Jim Conroy told investors.

“While our online business declined, that business is cycling two very strong years of 39% and 24% comp growth in fiscal 2022 and fiscal 2021, respectively. Given the extraordinary revenue increase last year, we are quite pleased with these results,” Conroy said. Retail same store sales declined just 3.3% over the same period.

BJ’s Wholesale (No. 69)

BJ’s Wholesale said that digitally enabled comparable sales were up 19% year over year for the quarter ended April 29 ,2023. Online sales made up 10% of total sales in the quarter, CEO and president Bob Eddy told investors. Members of the warehouse club who shop online spend 70% more than members who only shop in stores, Eddy said.

Canada Goose (No. 135)

The winter wear retailer grew revenue 31.4% year over year in its fiscal Q4, but growth was partially offset by lower ecommerce results, per CEO and chairman Dani Reiss. Canada Goose didn’t share specific ecommerce figures.

The retailer shared plans to “further enhance store productivity and e-commerce performance in the not-so-distant future,” without stating details.

The Children’s Place (No. 124)

Digital sales growth at The Children’s Place “significantly outperformed” in-store sales for the first quarter, CEO and president Jane Elfers said in a statement. 

Online purchases made up 46% of sales in the quarter, compared to 45% in the previous year’s Q1 and just 33% in 2019. Elfers said ecommerce is projected to be 30% of sales by 2025, representing over $1 billion. 

Web traffic was “up double digits,” and 56% of new customer acquisition came through ecommerce, the retailer said. 

“Our millennial moms’ clear preference for the ease and convenience of shopping for her kids online is here to stay,” Elfers told investors.

Dick’s Sporting Goods (No. 32)

The sports retailer didn’t share specific ecommerce figures, but president and CEO Lauren Hobart told investors that “our digital experience remains an integral part of our success,” in a Q1 earnings call. 

Dick’s acquired outdoor retailer Moosejaw in March. Moosejaw primarily operates online, averaging 3 million visitors per month.

“For just over 10 months in 2023, we expect Moosejaw will add approximately $100 million in net sales,” chief financial officer Navdeep Gupta told investors.

e.l.f. Cosmetics Inc. (No. 953)

Beauty retailer e.l.f. grew net sales by 78% in its fiscal fourth quarter, “primarily driven by strength across our retailer and e-commerce channels,” it said in a statement.

E.l.f. began as an exclusively online brand before expanding into stores. Consumption of the brand’s digital content was up 75% in fiscal 2023, CEO Tarang Amin told investors. The retailer’s beauty squad loyalty program grew to 3.7 million members in the quarter, up 25% year over year. Loyalty members were behind nearly 80% of ecommerce sales, along with higher AOV and more frequent purchases than non-members, Amin assid.

Foot Locker, Inc. (No. 52)

Foot Locker reported that comparable digital sales in Q1 were down 16.8% year over year. The footwear retailer also discontinued an ecommerce line called East Bay, and online sales were down 9.5% excluding the brand. That’s still a larger decrease than in store comparable sales, which were down 7.4%. 

Online sales made up 16.3% of sales in the quarter, down from 18% in Q1 2022. Ecommerce sales are starting to pick up, with April sales up year over year, CEO Mary Dillon said. The retailer is on track to reach its goal of 25% online sales by 2026, Dillon said.

Guess Inc. (No. 177)

Online sales at Guess grew in Q1, although more slowly than in store sales, CEO Carlos Alberini said. 

Total revenue was down 4% in the quarter to $570 million, with U.S. revenue declines offsetting growth in Asia and Europe.

Kohl’s Corp. (No. 23)

Digital sales were down 19.6% year over year in Q1, Kohl’s reported. Net sales were down just 3.3%. 

“Our customers continue to shift back towards stores, and we reduced online-only promotions as we work to simplify our value strategies,” CEO Tom Kingsbury told investors.

Online sales made up just over one-quarter of sales for the quarter at 26%.

Ralph Lauren Corp. (No. 75)

Ralph Lauren’s digital sales were up in fiscal 2023, the retailer said. ”Sales in our owned Ralph Lauren digital sites grew mid-single digits on top of 20% growth last year,” chief financial officer and chief operating officer Jane Nielsen told investors in a Q4 earnings call.

“We plan to enhance the user experience with rich digital content and even greater customer personalization in fiscal ’24,” Nielsen said. That includes using generative AI for copy editing, computer programming, and graphics in addition to inventory optimization and forecasting.

Urban Outfitters (No. 30)

Apparel retailer Urban Outfitters reported comparable sales grew by double digits both in stores and online for its Anthropologie, Free People, and FP Movement brands. The Urban Outfitters brand’s comparable sales were down, and overall comparable sales were up 5%, the retailer said. 

“The growth in Retail segment comp sales was driven by a high single-digit digital comp and a low single-digit positive store comp,” co-president and chief operating officer Frank Conforti told investors. 

Online rental and resale marketplace Nuuly revenue grew 125% year over year, ending the quarter with 167,000 subscribers. 

Williams Sonoma Inc. (No. 22)

Revenue decreased 6% year over year in Q1, but was up 3.5% over 2021. The retailer did not specify ecommerce revenue. 

Williams Sonoma plans to “optimize our digital spend and customer connections,” per CEO Laura Albner.

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Ecommerce remained a bright spot for the quarter ended April 28, 2023. Total U.S. comparable sales excluding fuel for the first quarter grew more slowly, up 8.2% year over year. International results were similar, with ecommerce sales up 25% and comparable sales up 12.9%.

U.S. and international ecommerce sales growth were driven by gains in curbside pickup and delivery, Walmart said in a statement.

“We had a strong quarter. … We leveraged expenses, expanded operating margin, and grew profit ahead of sales,” CEO Doug McMillon said in a press release. “And a big thank you to our associates, who continue to step up and deliver for customers and members whenever and however they want to be served.”

Total revenue, including advertising, in-store, and online sales, was up 7.6% for the quarter. Walmart’s $152.3 billion revenue exceeded Wall Street expectations of $148.76 billion.

The big box retailer also reported net income of $1.67 billion in Q1, an 18.5% decline from $2.0 billion in Q1 the previous year.

Walmart ranks No. 2 in the Top 1000 database for online sales, behind only Amazon.

Other results

Sam’s Club, Walmart’s membership-based warehouse chain, reported ecommerce sales grew 19% in the quarter driven by curbside orders. Like Walmart overall, comparable sales excluding fuel grew more slowly than ecommerce, up 7%. Membership reached an all-time high, Walmart said.

Walmart+ continued to grow, the retailer said, with nearly 50% of new members joining through pickup and delivery services. Members shop more frequently and spend more per trip, the company said. Walmart declined to share specific figures for Walmart+.

Category results

General merchandise sales in the U.S. declined “mid-single digits” Executive vice president and chief financial officer John David Rainey told investors, declining to share a specific figure. Food and consumable sales, however, increased “low double digits.” 

Walmart once again gained market share in grocery, and it made gains with higher income and younger shoppers, Rainey said.

“Customers are being cautious with their spending in discretionary categories,” he said, even as inflation decreased during the quarter.

Walmart has higher margins on general merchandise compared with food, meaning the shift toward grocery can slow profit growth. Rainey said Walmart expects this trend to continue through the end of the year.

Unusually cool spring weather negatively impacted garden and outdoor sales, he said.

Guidance for 2023

Walmart projected higher sales for the rest of the year after beating expectations in Q1. The retailer said it expects consolidated net sales to increase 4% in Q2, with consolidated operating income down 2%.

For the full year, Walmart expects consolidated net sales to grow approximately 3.5, with operating income up 4 to 4.5%.

Rainey explained the retailer’s reasoning behind updated guidance.

“In addition to the persistence of inflation in food and consumables, customers were also impacted by a reduction of SNAP benefits and lower tax refunds,” Rainey said. “These impacts were partially offset by higher spending due to a cost of living adjustment for social security benefits.” 

Walmart Q1 2024 financial results

For the fiscal first quarter ended April 28, Walmart reported:

• Walmart U.S. ecommerce sales grew 27% year over year.
• Comparable U.S. sales grew 8.2% over the year-ago period.
• Total global revenue grew 7.6% to $152.3 billion.
• Net income declined 18.5% to $1.67 billion.

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

Check back for more earnings reports.

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“We needed a global overview of our entire [pool] of consumers and their interaction with the brand,” says Yoed Negri, global director of digital transformation, SodaStream.

Yoed Negri, global director of digital transformation, SodaStream International

Negri says SodaStream understands that its customers interact with the brand through more than one channel: email, SMS text and social media posts. But they weren’t sure how those interactions lead to an increase in conversion, he says.

“We understood that the current marketing infrastructure we had was not enough,” Negri says.

SodaStream’s marketing software provider, Optimove, offers artificial intelligence software. In 2022, SodaStream began using the capability in six markets, which represents about 10% of countries where SodaStream sells its products, Negri says. SodaStream products are sold in store at retail chains like Walmart Inc., Target Inc., and others, as well as online. The retailer sells directly to consumers in 20 markets online.

Test campaigns show how likely consumers are to convert

One way SodaStream engages with SodaStream drinkers is by sending recipes to customers they know like Pepsi-flavorings, diet flavorings and other options based on past orders. The retailer wanted to see how its customers responded to the recipes when received via email, SMS text or through social media posts, Negri says.

The beverage retailer declined to disclose the specific flavors presented, but Negri says the results showed that ads appealed differently to consumers depending on the channel. For example, for email campaigns, SodaStream saw a 3%-5% increase in conversion and 15% increase in average order value.

SMS text conversion rates were 10%-15% higher compared with email depending on the market, Negri says.

For social media posts, Negri says it’s important to note engagement and conversions.

“We see 7%-10% increases in engagement for personalized content and 5%-7% increase in conversions,” he says.

SodaStream conducted the tests over a period of four to eight weeks in late 2022, Negri says. Optimove’s AI software learns how consumers are responding to ads within six to eight weeks, Negri says.

Using AI to anticipate conversion

When deciding which campaigns to propose to which customers, Optimove’s software uses the data it collected to determine the best campaign for each, says Pini Yakuel, CEO of Optimove.

A retailer might decide to send a marketing campaign or a promotion, such as a birthday promotion, via email, SMS or a combination of both methods. Optimove’s AI determines the best combination for each customer base, Yakuel says.

Digital marketers also use Optimove’s analytics for the following:

• The likelihood to convert.
• The likelihood of becoming a top spender.
• The risk of churn (the measure of how many customers stop using a product).
• Likelihood of reactivating (also known as re-engagement, where retailers reach out to people who have previously expressed interest or engaged but have since disengaged with communications).

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Adobe produced the report based on 100 million SKUs across 18 retail categories including groceries, personal care, and appliances.

The biggest price declines

11 of the 18 categories monitored by Adobe recorded lower prices in April 2023 than in the previous April. The largest year-over-year decline was flowers and gifts, with prices down 27%.

Electronics and computers saw significant declines in April, Adobe found. Electronics decreased 11.6% year over year, and computers decreased 15.4% over the same period. Both saw slight increases month over month of 0.5% and 1.9%, respectively.

The appliance category also drove the price decline, Adobe said, with prices down 7.1% year over. That was the largest annual decline for the category since Adobe started tracking them in 2014. Appliances prices were down 2.1% month over month, marking the seventh month of price drops following 29 consecutive months of price increases beginning in May 2020.

Sporting goods, toys, and home and garden were all also down year over year. Sporting goods marked a 12th consecutive month of year-over-year price declines. Before that, prices increased for 28 months beginning in January 2020. Prices peaked in September 2020 as consumers invested in home exercise equipment during the pandemic.

Grocery price increases slowed

Online grocery prices increased 9.3% year over year in April, more than every category except pet products (11.32%). Though prices were up, the growth rate decreased for seven consecutive months. Online grocery prices increased 10.3% year over year in March, and 11.4% in February. Growth peaked in September 2022 at 14.3% year over year.

Grocery ecommerce sales grew 10.8% in 2022 over 2021, according to a previous Adobe report. With prices steadily increasing, more consumers turned to buy-now-pay-later services to purchase groceries, with usage up 40% in 2022.

“The rise of buy-now-pay-later usage for groceries tells us that consumers are likely making bigger purchases online to take advantage of special promotions and stock up on staples, thus managing living expenses in more flexible ways,” Adobe Digital Insights lead analyst Vivek Pandya said in a March press release.

Ecommerce prices diverge from overall retail

Adobe says it uses the same general methodology that the Bureau of Labor Statistics uses to track prices in the Consumer Price Index (CPI). The agency hasn’t released its April numbers yet, but in recent months the CPI has diverged from Adobe’s Digital Price Index. In March 2023, ecommerce prices decreased 1.7% per Adobe, while the CPI grew 5%. In February, Adobe recorded a 1.4% decrease, and the CPI grew 6%. Both measured year-over-year price changes. 

Ecommerce prices have largely risen more slowly than retail prices as a whole, or even decreased. Online groceries are an exception to this, and generally move in step with the CPI, Adobe says.

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Devashish Saxena, chief digital officer, Imperial Dade

Imperial Dade, a major distributor of food-service packaging and janitorial supplies, is ready to take to a higher level its B2B digital commerce interactions with customers.

Devashish Saxena, as a former head of digital commerce at several large companies, has plenty of ecommerce experience behind him as he takes on his new role as Imperial Dade’s first chief digital officer.

“We will put the customer at the center of everything we do,” he says in this exclusive DC360 interview. “Through a data-driven approach, we will gain insights that enable us to anticipate their needs and exceed their expectations.”

Digital Commerce 360: You’ve built digital organizations at major companies including PPG, Rexel, Premier Farnell and Texas Instruments and guided them in making data-driven decisions to deliver business impact. What are some of the experiences that stand out for you where digital technology and strategy made a positive difference?

Devashish Saxena: At Texas Instruments, I was part of a team that revolutionized TI.com from a static brochure-ware site to a dynamic, user-focused design engineering tool that became the go-to destination for TI’s customers. We built a thriving design engineering community, E2E.TI.com, which remains a driving force today. Our team also created data frameworks that accurately measured the ROI of online conversions, connecting them to offline sales performance. The impact of our work at TI cannot be overstated – we changed the way TI interacted with its customers and transformed the company’s digital presence.

As digital employee No. 1 at Rexel and PPG, I was essentially a startup founder within two global powerhouses. At Rexel, we shifted the company’s focus from being a logistics company into a value-added, data-driven omnichannel distributor that saw €2.2B (US$2.4 billion) in digital sales in 2018 — all in less than five years.

This transformation was a human-centered effort, where digital technologies were key to driving organic growth. At PPG, we established AI as a core and integral part of our digital strategy, creating an AI factory that identified and scaled use cases across the value chain. As an example, an AI scaling effort in manufacturing at PPG could drive a few hundred million dollars in EBIT at scale. These milestones will stand out as significant achievements in both companies’ digital journeys.

DC360: As Imperial Dade’s first chief digital officer, how are you enjoying the new role? How can you use your C-level position to coordinate efforts companywide to build a solid digital and omnichannel strategy?

Saxena: As Imperial Dade’s first chief digital officer, I am thrilled to be leading the company’s digital transformation journey. The warm welcome I have received from every corner of the organization — from our CEO to employees in Sales, Marketing, Customer Service, Finance, Operations, and HR — has been nothing short of phenomenal. The positive energy and excitement for what lies ahead are palpable. It’s an honor to be part of a team that understands the significance of this journey and is committed to making it a success.

Driving a digital strategy is not just about adding new tools or technologies — it’s about fundamentally changing the way a company creates value. This is why we use the term “transformation” so often when talking about digital. And it all starts from the top.

At Imperial Dade, Jason Tillis, our CEO, Charles A. D’Elia Jr., our chief commercial officer, Scott Crocco, our chief financial officer, and our Board members all understand the magnitude of this work and are committed to making it a top strategic imperative. They know that it requires a shift in mindset and a willingness to embrace change. With their support, we are well-positioned to make a lasting impact on the company and our customers.

DC360: How important is it to Imperial Dade’s future to develop a world-class omnichannel experience for your customers?

Saxena: As I mentioned above, it is one of the key strategic imperatives for the company. So, I’d say it is very important.

DC360: What are Imperial Dade’s customers’ biggest demands and expectations — and how can you address them?

Saxena: In my short time at Imperial Dade, I have had the privilege of speaking with many of our customers, and it’s become abundantly clear that they have a deep love and respect for our company. Why? Because we listen to them, and we consistently exceed their expectations.

However, we recognize our digital experience has not kept pace with our customers’ rising expectations  which is why it’s such a priority for us now. Our customers have reasonable expectations — give them digital options for engaging and doing business with Imperial Dade – that are easy, intuitive, and fast. Speed is critical for our customers.

That is exactly what we will do. We will continue to speak to our customers, understand what their journeys are, and where they experience any friction today. As we reimagine our digital experience — including a new ImperialDade.com site and a mobile app, we will constantly seek to remove those friction points for our customers. Furthermore, we want to do the same for our amazing sales team who are out there in the field every day serving our customers. We want to make it easier for each salesperson to serve their customers every day.

We are fully committed to delivering the best possible digital experience for our customers and sales team alike!

DC360: Please comment on how data science powers the omnichannel experience. How difficult is that to accomplish, and what are some of the critical technology systems you’re deploying to support that?

Saxena: In today’s digital age, data-driven decision-making has become a crucial aspect of any successful company’s culture. For Imperial Dade, it is not just a nice-to-have but a fundamental requirement to remain competitive in the market. By utilizing data science, machine learning, and AI, we can take our tribal knowledge and transform it into a culture that prioritizes customer satisfaction and delivers unparalleled value.

As we embark on this journey, we will put the customer at the center of everything we do. Through a data-driven approach, we will gain insights that enable us to anticipate their needs and exceed their expectations. This new way of thinking will become the norm for our teams, ingrained in the fabric of our organization. By doing so, we will improve our ability to serve our customers and create a significant competitive advantage that sets us apart from our peers.

DC360: What about change management? How are you getting Imperial Dade’s internal personnel, suppliers and customers on board with the digital omnichannel commerce experience?

Saxena: This topic of change is absolutely crucial, and it reinforces what we previously discussed about the paramount importance of driving digital transformation from the highest levels of leadership. Most organizations have an inertia to change, and many have designed their current business processes years ago, which can impede progress. To capture a significant portion of the value at stake, everyone must change. Our customers must change (and the good news is many are ready), our salespeople have to change, our marketing people have to change, and over time through this journey every person at Imperial Dade must be prepared to adjust how they work on a daily basis.

With the focus and support of our leaders, my goal will be to build a compelling and concrete reason for why we must change before moving into a tiered and phased approach to bring it to life. In my experience, demonstrating small successes and creating numerous internal advocates for change are critical to our ability to successfully shift. But this is a process that demands continuous and ongoing focus — every day, every week, every month.

DC360: Imperial Dade has made several acquisitions of other distributors. How challenging is it to get then all connected and contributing to the company’s digital and omnichannel growth strategies?

Saxena: Imperial Dade continues to differentiate itself in the marketplace by strategically growing our North American presence through both acquisitions and organic growth. Our approach to digital and omnichannel must complement our growth trajectory, as our expanded footprint better positions us to effectively serve national customers in the U.S. and Canada.

To be successful, we must focus on integrating new businesses as they are acquired, ensure our processes are aligned, and ultimately migrate them to our primary ERP. As we build out our new digital experiences, we will actively work to ensure we build the right architecture to connect effectively into our back-end systems, enabling a single, superior customer experience on the new ImperialDade.com.

DC360: Going forward, what critical steps will Imperial Dade need to take to establish a cohesive coast-to-coast omnichannel business?

Saxena: In my first 90 days at Imperial Dade, my top priority is to kick off the execution of our new digital experiences. This is a crucial step for us, and with only five weeks left as we speak, we must act quickly.

We have already developed and aligned on an omnichannel strategy; we are already engaging with our customers to understand their journeys. We are already assembling the teams we need to kick off execution. A sharp focus on execution will be critical in the early part of our journey, which includes our work on data and business process and engaging our people as part of the journey.

DC360: What excites you the most in new digital commerce technology?

Saxena: AI.

DC360: What do you see as the most significant commerce challenges and opportunities in digital commerce?

Saxena: The problem I see in many companies today is that they continue to view digital commerce simply as a technological upgrade, rather than a fundamental shift in the way businesses create value. This narrow mindset limits their ability to fully leverage the potential of digital technologies to transform their operations, reach new customers, and ultimately drive growth. Companies that succeed in the digital age understand that digital commerce is not just about implementing new technologies but about reimagining their entire business model from the ground up.

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Gene Carbonara, vice president, e-commerce and digital, US Foods Inc.

As vice president of ecommerce and digital at US Foods Inc., Gene Carbonara manages the digital commerce strategy for a company that provides more than 400,000 food stock-keeping units, plus non-food items, sourced from approximately 6,000 suppliers. The company, which posted $34 billion in 2022 revenue, has 70 distribution facilities and a fleet of 6,500 trucks.

Carbonara will speak at the “How We Upgraded Our Tech — and Made Gains” session on June 21 during the EnvisionB2B Conference & Exhibition in Chicago. Here he shares some of his insights on ecommerce and how it fits into US Foods’ overall growth strategy.

DC 360: What is driving B2B companies like US Foods to expand online?

Carbonara: For US Foods, ecommerce is less of an expansion and more of a continuation of our go-to market strategy. MOXē is our latest ecommerce platform and is helping accelerate our ecommerce penetration faster than ever before. Another area where we are seeing rapid expansion is our endless-aisle program called US Foods Direct. Customers have really embraced ordering these unique products, and we’re seeing material growth and operational savings.

DC 360: What are your biggest internal and/or external barriers?

Carbonara: The biggest opportunity for us is to get customers to reconsider digital. Many customers and sellers are resistant to change. I believe there is a value proposition for all of our customers. Whether it’s cost control with our inventory, bill-pay or simple ordering and delivery visibility, it’s just a matter of finding that one feature that resonates with them.

DC 360: What are the chief gains you’re realizing?

Carbonara: We have several features that facilitate a complete and accurate order every time but also drive market-share growth. We’re seeing a significant number of cases being added from our merchandising efforts. As it turns out, when you have the easiest ordering experience, people order more.

DC 360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them?

Carbonara: Organizations need to develop comprehensive journeys that engage customers wherever they are and make conversions easy. Engaging a customer on any one channel will not move the needle consistently.

DC 360: Regarding COVID-19 and supply chain disruption, what is the biggest adaptation your company has made?

Carbonara: We’re more transparent than we have ever been about our inventory levels and supply chain disruptions. Customers appreciate it when you share information with them as soon as possible because it gives them time to react.

DC 360: Looking back over the past few years, is there anything you wish you had done differently in ecommerce?

Carbonara: As ordering plummeted in the pandemic, we took the opportunity to focus on developing our long-term strategy. Some of the key business elements needed to bring the strategy to life have taken longer than expected to deliver, and it would have been beneficial to start them earlier (e.g., product content).

DC 360: What excites you the most in new digital commerce technology?

Carbonara: Our new ordering platform MOXē stands for making operator experiences easy. We have more real-time customer feedback and analytics than ever before, and we are using that to feed our agile product teams. Those teams are innovating on features and delivering real value faster than ever before. In addition, we continue to build AI and automation into ecommerce. We are making great strides in complete and accurate orders that will act as a lead-in to predictive ordering, which will help us protect and gain market share.

DC 360: Going forward, what do you see as the most significant commerce challenges and opportunities?

Carbonara: In our industry, the technology landscape is crowded and complicated. One of our biggest challenges is to make it easy for our most straightforward customers while having robust capabilities for our largest, most sophisticated customers. The biggest opportunity for us is to service this wide range of customers in an elegant way that feels accessible to everyone.

Jim Daly is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.  

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Net sales for the quarter were $18.27 billion. That’s up from $17.39 billion in the retailer’s Q4 in fiscal 2021. Although cost of sales increased as well — to $13.18 billion in Q4 from $12.40 billion in the previous Q4 — gross margin did, too. Gross margin in Q4 2022 increased to $5.08 billion from $4.98 billion the year before.

As a percentage, though, Albertsons gross margin went down. It decreased to 27.8% of net sales and other revenue in Q4 2022. Gross margin in the year-ago quarter was 28.7%. Albertsons attributed some of that change in margin to fuel. It said selling and administrative expenses as a percentage of net sales and other revenue was essentially flat.

The grocery conglomerate reported identical sales increased 5.6% in the quarter. Direct-to-consumer digital sales are included in identical sales. Moreover, loyalty members increased 15% to more than 34 million.

CEO Vivek Sankaran said in a statement that Albertsons is “well-positioned to drive top-line growth by deepening relationships with our customers even as inflation continues.”

“However, we also believe that the economic backdrop is uncertain and is likely to be more challenging later in the year,” Sankaran said. “We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases.”

Albertsons digital sales in fiscal 2022

The Boise, Idaho-based retailer’s net sales in fiscal 2022 increased to $77.65 billion. That’s up from $71.89 billion in fiscal 2021.

Cost of sales for the fiscal year totaled $55.89 billion. That’s up from $51.16 billion the year before. And gross margin increased to $21.76 billion in 2022 (28.0% of net sales) from $20.72 billion in 2021 (28.8% of net sales).

Meanwhile, Albertsons digital sales increased 28% year over year in fiscal 2022. Identical sales increased 6.9%.

Kroger deal could change Albertsons forecast

Albertsons and The Kroger Co. are working to win regulatory approval that would have Kroger acquire Albertsons for $24.6 billion. Citing the pending deal, Albertsons didn’t provide a profit and sales forecast for the fiscal year, which ends in early 2024.

The $24.6 billion Kroger and Albertsons deal would remake the online grocery industry. If Kroger were to acquire Albertsons, it would create a 48-state grocery giant that could seriously challenge Walmart’s leadership that market.

Albertsons is No. 26 in the Top 1000, Digital Commerce 360’s database ranking the largest North American online retailers. The Kroger Co. is No. 8.

Albertsons earnings summary

For the fiscal fourth quarter ended Feb. 25, 2023, Albertsons reported:

• Net sales increased to $18.27 billion from $17.38 billion in the year-ago quarter.
• Cost of sales increased to $13.18 billion from $12.40 billion in the year-ago period.
• Albertsons digital sales increased 16% year over year.
• Loyalty members increased 15% to over 34 million.

For the fiscal year 2022 ended Feb. 25, 2023, Albertsons reported:

• Net sales increased to $77.65 billion from $71.89 billion in the previous fiscal year.
• Cost of sales increased to $55.89 billion from $51.16 billion in 2021.
• Albertsons digital sales increased 28% year over year.

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

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Devashish Saxena, vice president and chief digital officer, Imperial Dade

Devashish Saxena — a former senior ecommerce executive at manufacturer PPG and electrical supplies distributor Rexel — will focus on building a “world-class omnichannel customer experience as the new chief digital officer at Imperial Dade, the Jersey City, New Jersey-based company said today.

Leading that effort will be Devashish Saxena, a veteran B2B ecommerce executive Imperial Dade announced today as its first chief digital officer.

“Devashish is an excellent addition to our organization, contributing his expertise and passion to further develop and execute our digital strategy,” said Charlie D’Elia Jr., chief commercial officer of Imperial Dade. “Digital transformation has a critical role to play in our disciplined growth plans, and his experience and leadership will be invaluable in the years ahead.”

Saxena, a long-time veteran of digital commerce and marketing who also serves on the adjunct faculty at Carnegie Mellon University, most recently served as vice president and chief digital officer at PPG, the Pittsburgh-based coatings manufacturer.

Prior to PPG, Saxena was group vice president, global digital business and ecommerce at Rexel, a France-based omnichannel electrical supplies distributor. In earlier positions, he led digital operations at electronics distributor Premier Farnell (now part of Avnet) and Texas Instruments.

Acquiring distributors and opening logistics hubs

Imperial Dade, founded in 1935, says it has experienced substantial growth organically and through acquisitions since 2007, when it was acquired by Robert Tillis, its chairman, and Jason Tillis, CEO. The company does not break revenue figures.

In recent weeks, it has acquired such companies as janitorial-sanitation products distributor Classic Solutions Inc., Columbus, Ohio; Fresno, California-based food-service packaging distributor Focus Packaging & Supply Co.; and packaging and janitorial supplies distributor Solutions Sherby, Granby, Quebec.

In addition, Imperial Dade opened new logistics hubs this month in Las Vegas and Orlando, Florida.

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Rafa Oliveira, president of international markets, The Kraft Heinz Co.

The Kraft Heinz Co. will start out with sales to merchants in Mexico, Colombia and Peru, followed by expansion into Ecuador, Dominican Republic, Panama and other Latin American countries in an effort to “unlock 1 million potential new points of sale across LATAM,” Kraft Heinz and BEES said in a combined press release today.

Kraft Heinz expects its business through BEES to help grow its emerging markets strategy.

Tying into AB InBev’s distribution network

Rafa Oliveira, Kraft Heinz executive vice president and president of international markets, says the big CPG company expects BEES to be a “game-changer” in its efforts to expand globally. In the press release, he notes that selling on the BEES marketplace lets Kraft Heinz benefit from AB InBev’s distribution network, “particularly in countries where we have huge potential to grow, while also allowing us to customize our approach on a market-by-market basis serving the needs of regional retailers.”

Anheuser-Busch InBev developed BEES as an online B2B platform in 2019 to let retailers order from among AB InBev’s hundreds of brands, including global beer brands Budweiser, Corona and Stella Artois and many regional and local market brands.

But BEES recently opened its online platform to let other consumer packaged goods companies list their products within the BEES marketplace. BEES says it currently operates in 20 countries, including:

• Canada
• The United Kingdom
• China
• South Korea
• Several countries in Africa and Latin America

Overall, it notes that it has 3.1 million active monthly users and has processed more than $32 billion in gross merchandise sales.

BEES drives up ecommerce share of AB InBev’s revenue

Nick Caton, chief B2B officer, BEES

AB InBev reported $57.8 billion in revenue last year. It said the digital BEES platform accounted for “approximately 63% of our revenues.”

Buyers on BEES can:

• Browse for products
• Place orders
• Earn rewards in applicable markets
• Arrange deliveries
• Manage invoices
• Access market data for supply and demand insights

Nick Caton, chief B2B officer at BEES, says adding CPG companies like Kraft Heinze to the BEES marketplace complements BEES’ commitment to “accelerating digital transformation” and helping local retailers thrive in their markets.

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The analytics firm used data based on more than 1 trillion visits to U.S. retail websites, 100 million different products, and 18 categories.

Grocery ecommerce continues to grow

Adobe identified strong growth in the grocery and home furnishing categories. 

Ecommerce grocery spending grew 10.8% in 2022 over spending in 2021, Adobe found, leading to $86.8 billion in consumer spending. Grocery sales have been shifting online since the onset of the COVID-19 pandemic in 2020. Some consumers continued to buy groceries online even as stores reopened and many businesses resumed normal operations.

In an October 2022 survey of 1,000 online shoppers, 45% told Digital Commerce 360 that they’d ordered groceries online at some point. Just under one-third of online shoppers (29%) said they ordered groceries online routinely or occasionally, and another 16% tried for the first time during the pandemic.

The Kroger Co., one of the largest grocery chains in the U.S. and No. 8 on Digital Commerce 360’s ranking of the Top 1000 North American ecommerce retailers, recently reported growing online sales. Digital purchases were up 12% year over year in the fourth quarter ended Jan. 28, 2023.

“Despite the easing of pandemic-related shopping behaviors that led to a significant increase in online shopping, more and more customers are incorporating ecommerce into their daily permanent routine,” CEO Rodney McMullen told investors.

Growing expenses made BNPL more attractive

More consumers turned to buy-now-pay-later (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, possibly as a result of inflation.

Groceries and furniture drive BNPL growth

BNPL to purchase groceries saw the biggest increase of any category examined by Adobe in the first two months of 2023, up 40% over 2022. This is also likely part of the trend of using BNPL services to purchase lower-priced items.

“The rise of buy-now-pay-later usage for groceries tells us that consumers are likely making bigger purchases online to take advantage of special promotions and stock up on staples, thus managing living expenses in more flexible ways,” Adobe Digital Insights lead analyst Vivek Pandya said in a press release.

Furniture sales were the other main area where consumers used BNPL more so far in 2023 than in 2022. 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,” Pandya said.

Over the same period, BNPL grew more slowly or declined in other categories. BNPL use in apparel purchases grew 8%, and use for electronics fell 14%.

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