It’s no secret bricks and mortar retailers are struggling to maintain profitability and manage expenses for their retail stores. As the importance of omnichannel grows, who are the US retailers finding success with e-commerce? Today’s retail and e-commerce roundup answers that question.
According to the US Department of Commerce, Q2 2016 e-commerce sales grew 16%. Walmart announced positive Q2 earnings and an 11.8% jump in its e-commerce business. Target had a strong first half 2016 with e-commerce sales for pickup in-store up 50%. While Perry Ellis online sales grew 35.6% in Q2, it also plans to close 15 US stores, 20% of its retail locations.
Overall revenue decreased at Bon-Ton but sales on mobile devices were up 129% after enhancements to the mobile shopping site and simplifying its checkout for customers. Q2 2016 total sales for Nordstrom.com grew 9.4% to reach $683 million. Revenue was up 6.6% at Home Depot and it fulfilled 42% of online orders in-store. Staples saw online revenue grow to more than 50% of sales in its B2B e-commerce business.
E-commerce grows robust 16 percent in Q2, according to US Commerce Dept.
The Department of Commerce announced today that e-commerce sales for the second quarter were $97.3 billion, out of $1.2 trillion in total US retail sales. That was a sequential increase of 4.5 percent from Q1 and a significant 15.8-percent pop vs. Q2 2015.
E-commerce came in at roughly eight percent of total retail sales. Total retail sales grew just over two percent year over year. Accordingly, e-commerce saw dramatically stronger growth (from a smaller base) than traditional retail.
While 92 percent of retail sales happen in stores, many major retailers are suffering. Macy’s, for example, just announced closure of 100 stores. By comparison, several leading online retailers, mostly notably Amazon, have recently turned in very strong results. The Seattle company recently announced $30.4 billion in Q2 revenue, up 31 percent year over year. via MarketingLand
Wal-Mart bounces back to double-digit online growth in Q2
Even Wal-Mart’s CEO Doug McMillon admitted the big retailer’s 7% growth in online sales in the first quarter of its fiscal year wasn’t good enough, and that sluggish growth was widely cited when Wal-Mart Stores Inc. announced this month it would acquire Jet.com. Wal-Mart’s second quarter results announced today show somewhat better online growth.
Wal-Mart reported today that global sales on its 11 e-commerce sites around the world increased 11.8% year over year, when factoring out the strengthening dollar that reduces sales in dollar terms on Wal-Mart’s e-retail sites outside of the United States. That was the retailer’s strongest online growth since reporting a 16% e-commerce gain in the same quarter a year ago, an increase that also excluded currency factors.
McMillon cited “progress in e-commerce” in a prepared presentation that accompanied the earnings release. He also noted that online sales growth was stronger in the United States than in major international markets. Via internetretailer.com
Target grows its buy online, pick up in store business 50%
Online shoppers are increasingly picking up their orders in Target Corp.’s stores.
The number of orders picked up in store has increased 50% year over year through the first half of 2016, chief operating officer John Mulligan told analysts on the retail chain’s second quarter earnings call Wednesday. To accommodate that growth, Target is making strides to ensure its stores are ready for the holiday rush.
“In 75 of our highest-volume stores, we are increasing holding capacity to allow our team to retrieve items more quickly even during peak times,” he told analysts on the call, according to a transcript from Seeking Alpha. “We are also investing in additional digital devices to support peak demand and across all of our stores. We are rolling out new guidance on how our stores can optimize their storage space to enhance speed and efficiency.” Via internetretailer.com
Perry Ellis will close stores as online sales soar
“Overstored” is a term increasingly used by retail executives, as such chains as Macy’s Inc. and Kohl’s Inc. announce plans to close bricks-and-mortar locations in the face of growing online sales. Apparel brand Perry Ellis International Inc. is following suit.
As the company announced a strong 35.6% increase in online sales in the second quarter, it disclosed plans this week to close 15 stores—20% of its physical outlets—over the next 18 months.
“In my last conference call I mentioned that overstoring of America is a problem that is affecting retailers in a very negative way,” Perry Ellis executive chairman George Feldenkreis told analysts on a call Thursday, according to a transcript from Seeking Alpha. “It is better to have less stores, concentrate on new products and produce a better customer experience through less promotion and better service to customers.” Via internetretailer.com
Mobile improvements pay off for Bon-Ton
The Bon-Ton Stores Inc.’s investment in mobile commerce is paying off.
CEO Kathy Bufano told analysts on the retailer’s fiscal Q2 2016 earnings call that sales on mobile devices grew 129% year over year during the quarter, while mobile conversion is up 45% and mobile traffic increased by more than 40%. Bufano did not specify a dollar figure or mobile’s percentage of total sales.
“We made a number of enhancements to our mobile site, including a simplified checkout and greatly improved product pages and general navigation,” she said, according to a transcript from Seeking Alpha. “In addition to being able to pay with a virtual version of their credit card [meaning the version of a shopper’s credit card that they save to their account], we are also making it easier for [consumers] to apply their loyalty program rewards to online purchases. And we will be rolling out a new one-click-to-redeem functionality in the fall.” Shoppers also will be able to access their personal shopping cart, which saves the items they had placed in a cart when they are logged in on Bon-Ton’s site, whether they’re using their smartphone, desktop or other device, she said. Via internetretailer.com
Nordstrom’s e-commerce sales are strong thanks to heavy mobile investment
Luxury department store Nordstrom reported strong e-commerce sales growth in its Q2 2016 earnings report, even as the company saw an overall decline in total sales. Strong mobile engagement, which is outpacing desktop, was largely behind the e-commerce results.
Total sales for Nordstrom during Q2 2016 reached $3.5 billion, marking a 1.2% year-over-year (YoY) decline. However, total sales for Nordstrom.com grew 9.4% YoY to reach $683 million. Furthermore, total sales for Nordstrom’s off-price retail site and its flash-sale site HauteLook grew nearly 35% YoY to total $157 million.
Nordstrom’s drove strong e-commerce performance by a heavy focus on its mobile tools and engaging customers on their smartphones. The company focused on its mobile app performance during Q2, adding a visual search function and letting customers shop from specific store locations Via businessinsider.com
Home Depot Touts Use of Stores for Online Fulfillment
Home Depot Inc. is making progress in its effort to fulfill online orders from its stores. The home improvement retailer said customers are taking advantage of its new options for retrieving their e-commerce orders, including buying goods online that can be delivered from stores, with faster and more accurate delivery estimates.
About 42% of Home Depot’s online orders and almost 90% of its online returns for the second quarter were handled by its stores, executives said this week as they announced a 9.3% increase in net profit to $2.4 billion, on a 6.6% increase in revenue.
Many in the retail industry believe fulfilling online orders from physical stores can provide store owners an advantage over online competitors like Amazon.com Inc., allowing brick-and-mortar shops to serve as both showrooms and well-located mini-distribution centers. Via wsj.com
B2B e-commerce leads profits and sales at Staples
The second quarter wasn’t an easy one for Staples Inc. and its new interim CEO. Not only did its merger with rival Office Depot fall through, but the office suppliers retailer reported today a 4% drop in overall sales during the quarter ended July 30.
A bright spot in the Q2 earnings report was North American Commercial, or NAC, the business unit that manages sales to businesses through e-commerce sites StaplesAdvantage.com and Quill.com. NAC posted relatively strong if slack sales of $2.044 billion, down by 0.2% from $2.045 billion a year earlier, but the unit’s net income increased 5.8% to $146 million from $138 million a year earlier. Some of NAC’s sales are handled offline through sales reps and contact centers, but a big majority of them, or about 80%, are processed online, the company says….
Goodman noted several positive developments, including that “well over half of our sales are generated online through our private and public websites.” The company sells online to businesses of 10 or more employees through its NAC sites StaplesAdvantage.com and Quill.com; to companies through specially branded websites, and to small firms and individual consumers through Staples.com. Via b2becommerceworld.com
Omnichannel rules in retail
Omnichannel looks like the best way for retailers to compete with Amazon and other pure online competitors. The advantage of stores for pickup, fulfillment and exchanges is an important competitive advantage. As e-commerce grows as a larger percentage of total sales, watch for innovations and new services across retail channels. Cashback Industry News keeps you up to date on retail and e-commerce and who’s winning the omnichannel battle every M-W-F morning. Subscribe at the top of this page to get news you can use for free by email.