There is a lot going on in US e-commerce news and we’ve got a Friday roundup to keep you current. Morgan Stanley analysts are saying Costco’s business model is Amazon-proof. Nordstrom is struggling to manage the cost of its online business which grew by 10% while profits dropped 17%. KeyBanc Capital Markets analyst Edward Yruma identified Amazon’s private-label fashion line by recent trademark applications. Brands include Franklin & Freeman, Franklin Tailored, James & Erin, James & Erin Plus, North Eleven, Scout & Ro, Society New York and Lark & Ro.
Target’s digital sales jumped 34%, leading the pack of bricks-and-mortar retailers online, in the last quarter of 2015 according to Charlie Shea of Moody’s. 50% of US and UK shoppers say convenient delivery is a critical factor in purchase decisions according to retailgazette.co.uk. Google adds local delivery service to up the e-commerce competition with Amazon. Columbia Sportswear online sales were up 30% to reach $160 million in 2015. Groupon shown signs of a comeback with revenue up 3.8% to $917.2 million in 2015. Thirstie will be quenching thirst with alcohol deliveries in New York, Los Angeles, San Francisco, Chicago, Austin and Miami.
Why Costco’s business model is so great
Costco’s business model is making it unstoppable, even in an uncertain retail industry. Costco “operates one of the best business models in our space,” Morgan Stanley analysts wrote in a recent research note.
According to analysts, the retail giant succeeds by only minimally marking up offerings, passing along lower costs to customers, and providing “differentiated and high quality” products. Via businessinsider.com
Nordstrom’s High Cost for Online Sales
Nordstrom Inc. says it is struggling to control the high costs of competing for online sales. The Seattle-based retailer has gained market share by offering more-generous free shipping, in-store pickup for online orders and other services than many of its rivals. But the cost of boosting online sales has cut into profits, the company said last week when it reported full-year earnings. For the year ending in January, Nordstrom’s profits dropped 17% to $600 million, while expenses rose 10%.
Nordstrom’s results underscore how retailers haven’t figured out how to replicate online the profits generated in brick-and-mortar stores. Many companies are investing in technology and their distribution networks to seamlessly get merchandise to customers whether they order online or in-store. Via wsj.com
Browsing Amazon’s new private-label clothing lines
Amazon.com Inc. over the last eight months rolled out a series of Amazon-owned private-label apparel brands. The lines follow through on plans previously hinted at by Amazon executives, and represent a way for Amazon to become a bigger force in apparel, a segment where it’s been limited by the reluctance of some higher-end fashion brands to sell to Amazon.
KeyBanc Capital Markets analyst Edward Yruma identified the brands in a research note released earlier this week based on his research. Amazon has not commented or confirmed the brands directly, but Internet Retailer located trademark applications filed by Amazon Technologies Inc. for six of the seven brands dating to March 2015. Amazon did not respond to inquiries. Via internetretailer.com
Target has taken e-commerce lead against bricks-and-mortar rivals: analysts
A focus on core product areas, effective marketing and a multi platform inventory strategy have propelled Target Corp. to the head of the e-commerce pack among the bricks-and-mortar retailers, analysts and executives say.
Target TGT, +2.25% said digital sales during the fourth quarter jumped 34%, breaking company records and exceeding global digital sales growth at rival Wal-Mart Stores Inc. Globally, Wal-Mart WMT, +1.37% reported that e-commerce sales increased about 8% in the fourth quarter on a constant-currency basis. Target has likely seized the lead among the bricks-and-mortar chains on a percentage-growth basis, said Charlie O’Shea, lead retail analyst at Moody’s, in a statement. Via marketwatch.com
50% plus UK and US e-shoppers stress delivery convenience as key to purchase
More than 50% of the surveyed participants said they were willing to abandon their baskets if their chosen retailer was unable to provide their preferred method of delivery, a recent research study reveals.
Moreover, almost a quarter of the US participants surveyed and a third of UK counterparts expect delivery times of two days or less, whilst around four in ten in both countries would prefer click-and-collect options if available, according to the ‘2016 Consumer Trends Report’ issued by the e-consumer statistics provider Kibo, retailgazette.co.uk reports. Furthermore, 29% of all those surveyed said they would not purchase anything from retailers unable to offer in-store-pickup or extended payment options. Via thepaypers.com
Google Locks Horns With Amazon; Adds Grocery Delivery Service to Google Express
It is once again Google who is buzzing the media headlines as the company decided to lock horns with another giant, Amazon. In its latest move, the company has announced that it will start shipping perishable items to selected neighbourhoods in San Francisco and Los Angeles through its delivery service called ‘Google Express’. In order to provide a hassle free service to its customers, team of Google Express will be closely working with its retail partners Costco, Smart & Final and Whole Foods.
This new announcement has created lot of buzz in the market, with this; Google will be competing head on with Amazon whose ‘Prime Now’ delivery service is one the leaders grocery delivery business for a while now. Amazon is on the move to add more grocery partners into its team including players like Instacart, GrubHub Inc. etc. Via techstory.in
Columbia’s direct online sales top $160 million in 2015
Outdoor apparel maker and retailer Columbia Sportswear topped $160 million in direct online sales in 2015.
Columbia’s online sales in North America grew more than 30% year over year, CEO Tim Boyle told analysts on Columbia’s Q4 2015 earnings call. Worldwide online sales exceeded $180 million for the year, Boyle said. That figure includes $160 million in global direct e-commerce sales as well as $20 million “through various e-commerce portals in China.” The company’s yoga clothing brand Prana had a particularly strong year, posting 48% year-over-year e-commerce growth in 2015. China proved to be particularly strong in Columbia’s second year selling online there, Boyle told analysts. Via internetretailer.com
Groupon Gains Most Since 2011 on Strong North American Sales
Groupon Inc. jumped the most since its first day of public trading after the company reported fourth-quarter results that beat analysts’ estimates, driven by purchases in North America. The online marketplace said profit excluding some costs was 4 cents a share, compared with the average analyst estimate for a break-even quarter. Groupon surged 29 percent to $2.89, the biggest single-day increase since Nov. 4, 2011 — its first trading day after its initial public offering at $20 a share.
Having struggled since its IPO to spur growth and profits, Groupon replaced Chief Executive Officer Eric Lefkofsky in November. Since Williams took over, he increased the marketing budget in an effort to revive and reinvent the former Internet darling. Williams said his efforts are starting to bear fruit. Via washpost.bloomberg.com
Liquor Delivery Startup Thirstie Brews Branded Content
The combination of content and commerce can be a complex cocktail to get just right. Alcohol delivery service Thirstie is experimenting to find the right mix. “It’s not that content to commerce is all that hard to do,” said Devaraj Southworth, CEO and co-founder of Thirstie and a former AmEx exec. “It’s just hard to do well.”
Founded in 2013, Thirstie is a discovery/commerce platform for drinks, a sort of Seamless for adult beverages. Consumers make purchases on the Thirstie app or site and Thirstie fills their orders within the hour through partnerships with local liquor retailers in urban centers like New York, Los Angeles, San Francisco, Chicago, Austin and Miami. Via adexchanger.com
Retail Rocks
It’s an exciting time to be in retail online and in-store. E-commerce is continuing strong growth in consumers are using mobile more and more to make their purchases. Stay tuned for regular coverage in North America and around the world.