Home Furnishings | Digital Commerce 360

The top job changes hands at Beyond as the CEO hunt begins

Mark Brohan — Mon, 06 Nov 2023 22:30:31 +0000

There are lots of changes going on at Beyond Inc., the online home furnishing company formerly known as Overstock.com Inc., and now the owner of Bed Bath & Beyond. And most of the action takes place in the ranks of company executive management.

This morning, Beyond, No. 50 in the Top 1000, announced that CEO Jonathan Johnson has stepped down. Johnson’s departure follows mutual agreement by the Beyond board and Johnson to transition the company to new leadership, Beyond says. The hunt for a new CEO is underway. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers. Bed Bath & Beyond ranked No. 47 prior to its bankruptcy.

Beyond begins CEO hunt

While the search proceeds, company president David Nielsen will serve as interim CEO. Adrianne Lee, chief financial officer, will expand her responsibilities to oversee legal and human resources functions in addition to the finance organization.

As president, Nielsen oversees the company’s marketing, algorithms, customer, digital, technology, and sourcing and operations organizations. Prior to this role, Nielsen served as Overstock’s chief sourcing and operations officer.

“Following the recent acquisition of the Bed Bath & Beyond brand and our corporate renaming as Beyond, Inc., the board and Jonathan determined that this is the ideal time for a transition in leadership to guide the company forward,” says board chairman Allison H. Abraham.

In 2022, Johnson made total compensation of about $2.95 million, including a base salary of $871,154, according to company filings with the U.S. Securities and Exchange Commission. Nielsen in 2022 earned $1.41 million in compensation that included a base salary of $573,077.

In September, Angela Hsu stepped down as chief marketing officer at Overstock.com, which acquired the intellectual property assets of bankrupt retail chain Bed Bath & Beyond in June for about $21.5 million. As chief marketing officer for Overstock, Hsu made $842,557 in total compensation in 2022 .

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Retail blogs can deliver sales but only with a strategic plan

April Berthene — Thu, 02 Nov 2023 14:03:41 +0000

Blog content is a key digital marketing tool for online bridal merchant Azazie.

The bridesmaid dress retailer revamped its blog in Q2 2023 with a strategy, plan and one goal in mind: to have Azazie.com show up higher in search engine results, says marketing manager Keily Hernandez.

Azazie has had a blog on its site since 2019, with search engine optimization as one of its goals as well as using it to promote giveaways and promotions without significant financial investment. But SEO wasn’t the primary focus, and the merchant didn’t have a team dedicated to managing it. As a result, Azazie did not rank highly in search results for its targeted keywords, Hernandez says.

Now, Azazie updates the blog one to two times a week. Each month, Azazie picks a keyword to focus on, such as “bridesmaid” or “bridal gown,” and focuses all its marketing content, including social media posts, influencer content, content across the website and its blog, on that keyword.

“We have everything point back to us as the leader of that keyword,” Hernandez says.

I would think and I would hope that every company and every brand in every industry has a blog. It’s kind of like the low-hanging fruit of organic content.

Keily Hernandez

This focused and integrated effort has led to a 24% increase in sales revenue attributed to organic search (which includes blog content) from April until September 2023, compared with that same period in 2022, Hernandez says. And the content is resonating with shoppers, as sales from shoppers who viewed Azazie’s blog content increased 50% from January through September 2023, compared with the year-ago period.

Azazie is among the roughly half or so retailers that offer a blog or editorial content on their site, according to Gartner data. A Gartner analysis of 300 U.S. retailers (75 luxury retailers, 105 multi-brand retailers and 120 monobrands) in March 2023 finds that 47% of retailers have a blog or editorial content on their site, such as articles related to the products they sell, content about that category’s trends, company history or policies.

Merchants cite several reasons why investing in editorial content can help their bottom lines, including more traffic from search engines, higher conversion rates and low return rates. But execution is key, as retailers will not see any return on their investments if they are not thoughtful and thorough with their strategies. And investments can be significant, as merchants may have to invest in internal employees to generate the content or hire outside agencies.

Only 6% of online shoppers say blog content is an important feature for a well-designed and functional online shopping experience, according to a Digital Commerce 360 and Bizrate Insights survey of 999 online shoppers in October 2023. But shoppers put a higher value on similar content, which retailers could publish on a blog, such as how-to guides, at 19%, and an About Us page, at 12%.

Data from research firm Forrester Research Inc. also finds that only a small subset of consumers consult a blog before a purchase. 3% of U.S. online adults who purchased clothing or footwear (online or in person), and 5% who purchased furniture or home improvement products in the past six months visited the retailer’s blog in the past month, according to data fielded between November 2022-March 2023.

Yet, only 17% of shoppers say online retailers have met or exceeded their expectations with providing detailed product information such as origin story, history, business policies and sustainability. And only 12% said online retailers have met or exceeded their expectations with additional content such as how-to guides and blogs.

Retail blogs boost SEO value, organic search traffic

While shoppers may not rely on blog content to make a purchase, retailers and analysts still believe it can be an important component in the online shopping journey. In fact, shoppers may not realize that a blog post was how they landed on that retailer’s site to begin with. If brands write their blogs and editorial content with search engine optimization in mind, it can have a large impact on bringing in organic traffic, says Brad Jashinsky, director analyst at Gartner.

And organic traffic is important for Azazie. The wedding apparel retailer says about 10% of its site traffic and sales come from organic search, which includes shoppers finding its site from the blog articles.

“I would think and I would hope that every company and every brand in every industry has a blog,” Hernandez says. “It’s kind of like the low-hanging fruit of organic content.”

Chip Malt, CEO and co-founder of cookware brand Made In, says that roughly 25% of its site traffic comes from organic search, which includes shoppers who come to Made In’s robust blog. On average per month, its blog receives 2 million page views, and each reader views about six pages in the blog, Malt says. This shows good engagement, Malt says. On average, this is about 20% of the site’s overall page views, he says.

What’s more, when Made In sends content-focused emails, the click-through rates are three times higher than its selling-focused emails, Malt says. Similarly, its content-focused ads on Google produce click-through rates at four to 10 times higher than selling-focused ads, he says.

Education through content has been a part of cookware brand Made In’s strategy since Day 1, Malt says. Made In launched a blog six months prior to launching products on its cookware site and the fourth employee the brand hired was a part-time content contributor, he says.

“Education is a part of the brand’s story,” Malt says.

Made In sells high-end cookware that’s designed for cooking enthusiasts and is popular among professional chefs. For example, its 10-inch blue carbon steel frying pan is $109, and the brand’s average order value is $330, according to Digital Commerce 360 estimates. The blog helps to explain the value of its cookware.

Today, the brand has 10 full-time employees on its content team, it publishes roughly 50 blogs per month and the blog ranks for 56,000 keywords within Google Search, Malt says. About 50% of these keywords are in the top 20 search terms on Google, with 25% of those on the first page of search results, he says.

One of the top navigation tabs on MadeinCookware.com is “Learn,” where the brand publishes its founding story, recipes, care for its products and cooking techniques. As Made In has expanded its product lines to include bakeware and wine glasses, it also has added content to support these products as well.

“If we are offering this line of cookware, we also want to keep up the pace of content. …. It’s something we wanted to do for our community,” Malt says.

Retail blog content connects to shoppers post-purchase

This large breadth of content distinguishes the brand from its competitors, such as All-Clad, Malt says.

“Long term, we believe if you are shown All-Clad or Made In, and you walk out the door and you are on your own, and you went with Made In, you have all this helpful content behind you. And that makes the consumer go with us overall, because they see us as a value-add,” Malt says.

All-Clad has a blog on its site with recipes and other product content. All-Clad did not provide a comment as of press time.

Top online floral merchant 1-800-Flowers.com Inc. also invests in editorial content as a way to engage with shoppers, says chief marketing officer Jason John.

It operates six blogs across its 17 brands, which include a variety of giftable products such as cookies and chocolates as well as flowers. The goal is to deepen the relationship with shoppers, so they don’t just view the e-retailer’s ecommerce sites as shopping destinations, John says. It updates each blog multiple times per month.

“It takes us beyond one transaction and helps solidify us as a part of the customer relationship,” John says.

1800Flowers.com addresses themes within each brand’s product assortment and customer base to appeal to shoppers. For example, topics that have resonated with consumers are about how to write sympathy cards, including pet sympathy cards, for its 1800Flowers.com blog, and articles about hosting holiday dinners for its food and gifting brand HarryandDavid.com.

Results from retail blogs

Web visits to its blog have increased 70% year over year, John says. Even more telling is that shoppers who view a brand’s blog content convert at a 3%-5% higher rate than shoppers who don’t. This speaks to the quality of its blogs, John says.

“You need a North Star with content,” John says. “A lot of companies, you can tell they are putting out content to put out content, and they are putting out content for a commerce outcome. We don’t believe there is authenticity in that type of content.”

While conversion metrics are a clear performance indicator, Made In says privacy regulations can make it difficult to track a direct conversion to a blog post, because many shoppers don’t accept cookies and may visit the site several times before deciding to make a purchase. The path to purchase becomes more muddled especially with products that are high-ticket and more considered, like Made In’s relatively pricey skillets and knife sets. Instead, Malt describes its investment in content as a “brand tax that we absorb,” meaning a cost of doing business for higher-end products.

Besides increasing site traffic, results from investing in a blog shows up in other ways, Malt says, such as aiding in the customer journey, helping its customer service team and low return rates. If shoppers are more informed about the products they buy from reading the blog, they are more likely to purchase the right product for their needs and not return it. He points to its stainless-steel products, which have a less than 2% return rate, without sharing more.

Roughly a third of the visits to Made In’s blog come from shoppers already on the website, and the rest from outside the site, such as search results, emails and ads. If Made In was only doing the blog for SEO purposes or completely focused on that as the goal, Malt would expect 99% of the traffic to come from outside sources. But that’s not Made In’s primary goal.

The fact that a third is internal traffic shows that the content is providing value to shoppers as they consider the brand’s products. Instead of having an article only live in the blog section, Made In peppers relevant content throughout the site to aid in the shopper journey, Malt says. For example, on the search results page, it may surface a post about the difference between nonstick and stainless-steel cookware.

“We believe content should be intertwined in the customer journey and are happy to have internal traffic get there,” Malt says.

Using blog content in multiple ways is smart, Gartner’s Jashinsky says.

“If you are going the extra mile to make great content, you need to make sure it’s discoverable, across social, across search, and product pages and search pages,” Jashinsky says.

How retailers know what to feature in blog content

Made In surveys its shoppers via email and uses that feedback to inform its content strategy. Based on 20,000 comments, Made In determined it needed more blogs about how to care for its products post-purchase, and now publishes such articles regularly.

“The nice part of being a direct brand is that people tell you exactly what they think,” Malt says.

Made In’s editorial team plans the focus of its blog posts for each month. Each of the brand’s departments, such as its product, customer service and marketing teams, give input on their teams’ current priorities. For example, the product team may say that it is launching a bird beak’s paring knife that month and request at least two articles featuring the product. The customer service team might say it’s had an influx of shoppers calling in about how to season their carbon skillet and propose a video blog and step-by-step instructions on how to do this.

“Customer service acts as a very direct line to our actual customer. So our customer service team has direct input into the content calendar,” Malt says.

The customer service team’s input gets particularly high priority when planning the blog’s editorial calendar, as the articles they suggest can help them assist customers much faster, Malt says. For example, with the “how to season the carbon skillet?” question, instead of taking 10 minutes to write out tailored instructions for each shopper, agents can direct shoppers to a video or blog that addresses their need.

“It’s an efficiency play,” Malt says. While Malt doesn’t have a direct KPI figure to tie to its retail blog, he knows speeding up solving customer service issues keeps agents and shoppers satisfied.

Azazie also taps its customer service team for input on what it should include in its blogs.

“If they have a question about a trend, we can respond and create a content strategy to that, that tying into what’s trending, and what we are also offering,” Hernandez says.

For example, a common question shoppers call in about is sizing for a bridesmaid dress while pregnant. Azazie has a blog that provides examples and tips on this topic, but it was first published in 2016. So, the content team refreshed the blog with examples of Azazie’s current maternity dresses and relevant links to its products. The customer service team refers to this blog while helping shoppers and directs shoppers to read it.

Customer service acts as a very direct line to our actual customer. So our customer service team has direct input into the content calendar.

Chip Malt

Azazie also looks to any interactions it’s gotten on social media and trends in the bridal industry to inform its content strategy.

The blog is under the purview of its digital marketing team, and Azazie also employs an SEO consultant to help determine its content and execution. Overall, the blogs that gain the most traffic and lead to the most sales are the ones that are integrated into its overall marketing strategy and are tied to press releases and influencers, she says.

“It’s a lot of moving pieces and work, in order to put a campaign behind a keyword, but those are the most successful, the ones with a content strategy,” Hernandez says.

Involving multiple departments in content creation will serve retailers well, Gartner’s Jashinsky says. Retailers would also be wise to track which types of content shoppers click on, and use that information to personalize product recommendations and for ad targeting. This is a way to gather first-party data directly from the consumer, which is especially valuable now that cookies that track shopper behavior across the web are increasingly being phased out, and can greatly benefit retailers in the long term, he says.

If retailers do decide to make a focused effort on improving SEO through blog content or guided selling tools like a quiz to match shoppers with suitable products, they should expect it could take a year or two to see results, not months, Jashinsky says.

“We always tell clients, this is not something you can get up and running in a week or month,” Jashinsky says. “This takes many months to get up and running, and takes a year or two to start to see significant payout. So you really need to make sure you have a long-term strategy and you are ensuring you reallocate this content as many places as possible to make sure that investment pays off.”

For something like a quiz that guides shoppers through a series of questions and links to relevant product pages, retailers should expect to pay thousands to tens of thousands of dollars to a vendor to build it, Jashinsky says. But to do an editorial program at scale — which may take a team of writers to publish content daily and collaborate with different teams, plus the technology to plug into personalization software — that could take hundreds of thousands of dollars to millions, he says.

For Made In, these marketing costs show up as the salaries for 10 employees dedicated to digital content instead of spending these dollars on ads. Similarly, the cost of the blog for Azazie shows up in its marketing staff resources. 1-800-Flowers also has an editorial staff that “fluctuates” depending on the time of year, John says without revealing more.

Retailers that do strategically invest in content often see an increase in traffic from organic search, and small increases in basket size and conversion rates for shoppers that engage with this content, Jashinsky says. This, of course, varies by how well the content strategy is executed and product category.

“Whether you are selling online or in-store, it is a pretty cost-effective way to increase SEO and increase conversion rates, and typically almost every retailer is already creating content and already has a lot of these pieces in other parts of ecosystem,” he says.

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Wayfair earnings: Revenue grew in Q3

Mary Meisenzahl — Wed, 01 Nov 2023 18:52:53 +0000

Wayfair Inc. reported earnings results from the third quarter ended Sept. 30. Total net revenue increased 3.7% to $2.9 billion.

The online furniture retailer reported a larger increase in U.S. net revenue, which grew 5.4% to $2.6 billion. Meanwhile, international revenue declined 7.0% over the same period. Net loss was $163 million.

Wayfair ranks No. 10 in the Top 1000, Digital Commerce 360’s ranking of the largest online retailers in North America.

“We executed further in the third quarter to produce consistent profitability — with Adjusted EBITDA now positive on a trailing 12-month basis — while also driving demonstrable market share growth, as evidenced by our gains on customers and orders,” CEO Niraj Shah said in a statement. “Even with a turbulent macro, we remain committed to our profitability goals in good times and bad.”

Wayfair leans on promotions

Consumers are careful with their spending this year, and reluctant to make a purchase until they see a good deal, Niraj Shah told investors in an earnings call. Once the deal pulls them in, though, they start to shop around, he says. During promotional events, less than one-third of revenue comes from the featured products, he told investors.

Wayfair is using promotions to draw in customers year-round, Shah says. For example, the online retailer created a promotion in its app for National Dog Day over the summer that drove double-digit increases in click-through rates, conversions, and sales, he says. The retailer also held a second Way Day event in late October.

Wayfair’s suppliers are also discounting products as a way to clear out inventory. That allows Wayfair to purchase the inventory at lower prices and mark them down for consumers, gaining market share.

Wayfair says a slow housing market isn’t a dealbreaker

While a slowdown in the U.S. housing market has hurt home goods retailers, Shah says that doesn’t have a major impact on Wayfair. While some customers do go to Wayfair to outfit a new home, that’s not the typical customer experience, he says.

The average Wayfair customer spends $540 with the retailer annually, spread across two orders.

“This isn’t someone that’s typically refitting an entire room or house. Instead, they’re a shopper that’s going through their home item by item, project by project making small updates on a much more frequent cadence,” he says. Moreover, Wayfair is well positioned to be the retailer consumers choose when they redo a room in their existing home, Shah says.

Headwinds facing the home category were largely offset by Wayfair’s gains in market share, according to an analyst note from consumer research firm Baird Equity Research.

Wayfair earnings

For the fiscal third quarter ended Sept. 30, Wayfair reported:

Total net revenue grew 3.7% to $2.9 billion.
Net loss was $163 million.
Active customers declined 1.3% to 22.3 million.
Repeat customers made 79.7% of all orders, up from 77.8% in Q3 last year.

For the nine months ended Sept. 30, Wayfair reported:

Net revenue declined 2.5% to $8.9 billion.
Net loss was $564 million, down from $$980 million in 2022.
Active customers declined from 23 million to 22 million.

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

Check back for more earnings reports.

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What ecommerce retailers can learn from HomeGoods exit

Peter Lucas — Tue, 31 Oct 2023 14:26:17 +0000

The decision by off-price home furnishings retailer HomeGoods to shutter its ecommerce store should serve as a cautionary tale for other off-price retailers looking to sell online.

While ecommerce is a popular sales channel with consumers, off-price retailing is centered around attracting in-store traffic, which allows consumers to search for and discover bargains. That concept does not necessarily translate well to ecommerce, especially when off-price retailers’ catalogs and inventory are continually in flux, ecommerce experts say.

HomeGoods, which is a brand of parent The TJX Companies Inc., shuttered its online store Oct. 21, about two years after launching the site.

TJX Cos. Inc. ranks No. 69 in the Top 1000. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in North America by web sales. HomeGoods does not rank independently in the Top 1000. TJX’s brands include Marshalls, TJ Maxx and Homesense.

“Being able to walk an off-price retailer’s aisles and search and discover is part of the appeal of off-price retailing to consumers,” says Brendan Witcher, vice president, principal analyst, Digital Business Strategy for Forrester. “It’s really not surprising that HomeGoods opted to stop selling online, because the question always surrounding the store was ‘would it work?’”

Why did HomeGoods stop selling online?

The decision to stop selling online was prompted in part by HomeGoods’ decision to focus more resources on its brick-and-mortar locations.

“We’ve made the decision to focus our resources on our more than 900 brick-and-mortar stores across the United States, where we invite our passionate HomeGoods.com customers to continue shopping for home fashion and décor,” HomeGoods said in a statement. “Customers may also continue to shop online at our sister sites www.tjmaxx.com, www.marshalls.com, and www.sierra.com, which will not be affected by this decision.”

HomeGoods reportedly notified its customers Oct. 18 via email that it would stop selling online Oct. 21. HomeGoods says it will fulfill and ship all online orders placed prior to closing. The retailer adds that all employees affected by the decision are being offered other jobs within the company.

HomeGoods’ online sales weren’t enough

Another likely factor contributing to HomeGoods’ decision to shutter its online store is ecommerce sales weren’t strong. In a 10-K statement filed in March, the retailer noted that HomeGoods.com “represented less than 1% of HomeGoods net sales for fiscal 2023 and fiscal 2022, and did not have a significant impact on year-over-year segment margin comparisons.”

In the same filing, HomeGoods noted its total net sales were $8.3 billion for fiscal 2023, compared to $9 billion for fiscal 2022, an 8% decrease. The decrease in net sales reflects an 11% decrease from comp store sales, partially offset by a 3% increase from non-comp store sales, the retailer says in the 10-K.

Overall, ecommerce sales remain “a very small portion” of parent TJX’s overall sales, TJX executives told analysts during an August earnings call. Digital Commerce 360 research estimates ecommerce made up about 10% of total TJX sales in 2022. That would amount to a 4.8% year over year increase, according to Digital Commerce 360 data.

TJX reported total net sales grew 8% year over year to $12.8 billion in its fiscal 2024 second quarter. Comparable store sales also grew 6% during the period. That’s “well above the company’s plan, and entirely driven by customer traffic,” the retailer said in a statement.

Off-price retailers’ battle with ecommerce

HomeGoods is not the first off-price retrial to venture into ecommerce, then pull the plug on the strategy, Witcher notes. In 2020, Burlington Coat Factory announced it was shuttering its ecommerce business. It accounted for just 0.5% of total sales.

“Burlington Coat Factory tried [ecommerce] and had a lot of the same problems,” Witcher says. “HomeGoods knew selling online would be difficult. It was an experiment that didn’t work, but it was good they tried.”

One of the key challenges off-price retailers face in ecommerce is keeping their catalogs current. They typically carry end-of-season stock, closeouts, overruns, returns, and excess inventory. As a result, retailers typically limit quantities. Items tend to sell out fast, and retailers may not replenish them in such cases. Hence, shopping at an off-price retailer’s store is like going on a treasure hunt for consumers. They don’t always know what discounted gems they will unearth.

“It’s not easy to go through all of an ecommerce retailer’s products online,” Witcher says. “Plus, consumers can’t physically examine products, whereas in-store, consumers can walk the entire store in about 10 minutes. For off-price retailers, their advantage is the physical store.”

HomeGoods’ exit from ecommerce should serve as a lesson to off-price retailers about how difficult it is to sell online.

“The myth that ecommerce will automatically be profitable is not true,” Witcher says. “Not all ecommerce ventures will be profitable. “This is a good lesson for all retailers, not just off-price retailers.”

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Earnings recap: What you missed from Amazon, Deckers and more

Mary Meisenzahl — Fri, 27 Oct 2023 18:28:07 +0000

This week, more retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America reported ecommerce earnings results for the most recent fiscal quarter. Here’s the ecommerce earnings summary you need to know from this week. Read more ecommerce earnings coverage here.

Parentheses indicate the merchant’s ranking in the Top 1000.

Amazon.com Inc. (No. 1)

Amazon recorded its highest operating income ever in the third quarter ended Sept. 30. Operating income nearly quadrupled year over year, growing 343%.

Read more about Amazon’s earnings here.

Columbia Sportswear Co. (No. 149)

Columbia reported net sales grew 3% in its fiscal third quarter ended Sept. 30, 2023. Growth was balanced between wholesale and direct-to-consumer channels, it said. Physical stores are outperforming ecommerce within direct to consumer.

“Consumer demand for soft goods, including apparel, footwear, remains weak,” Tim Boyle, CEO, said in an earnings call.

Deckers Brands (No. 74)

Deckers reported revenue grew 25% to $1.1 billion in its second fiscal quarter of 2024 ended Sept. 30. Direct-to-consumer net sales increased 38.8% to $331.7 million.

“Consumer demand was robust in stores and online,” says Dave Powers, Deckers CEO. Greater numbers of Hoka and Ugg brands drove average prices up, he said. [what do you mean? products from those brands?]

Hasbro Inc. (No. 554)

Hasbro reported revenue declined 10% in the third quarter ended Oct. 1. However, the toy retailer reported large gains in online gaming. Digital gaming revenue grew 40%, driven by Magic The Gathering and Dungeons and Dragons. Consumer products and entertainment revenue declined 18% and 42%, respectively.

Overstock.com Inc. (No. 49)

Overstock reported revenue declined 19% to $373 million in the third quarter ended Sept. 30. Results reflect the Overstock brand through July 31, and Bed Bath & Beyond beginning Aug. 1. Active customers declined 15% and net revenue per active customer declined 13%.

Skechers USA Inc. (No. 301)

Skechers reported sales grew 7.8% to $2.0 billion in the third quarter ended Sept. 30. Direct-to-consumer sales, which include ecommerce, grew 23.8%. Domestic ecommerce slowed as U.S. consumers returned to stores. Last year at this time, stores had a lack of inventory, pushing consumers online, the retailer said. This year, stores are better stocked, so consumers went there first. [attribution?]

Tractor Supply Co. (No. 99)

Tractor Supply report net sales grew 4.3% to $3.41 billion in the third quarter ended Sept. 30. Ecommerce sales grew in the high single digits, the retailer said without revealing more. Digital sales made up more than $1 billion in the last 12 months. The Buy Online, Deliver from Store program is also doing well, Tractor Supply said.

Meanwhile, comparable sales declined 0.4%.

United Parcel Service Inc.

UPS reported profits and revenue declined in its fiscal third quarter ended Sept. 30, 2023. UPS consolidated revenue declined 12.8% from the year-ago period to $21.1 billion. Consolidated operating profit declined 48.7% over the same period to $1.3 billion.

So what does it mean?

Retailers are still reporting soft consumer demand in the face of rising prices and turn toward experiences rather than physical goods.
However, some apparel retailers are reporting bright spots. Deckers and Skechers both say they’re seeing strong interest from consumers.

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Williams-Sonoma is all business about B2B ecommerce

Mark Brohan — Mon, 23 Oct 2023 14:29:12 +0000

The home décor chain retailer Williams-Sonoma Inc. was one of the earliest chain retailers to really embrace business-to-consumer ecommerce.

Now, Willams-Sonoma is going all in on another ecommerce market: business-to-business.

Williams-Sonoma is No. 22 in the Digital Commerce 360 Top 1000. The database ranks the largest online retailers in North America by web sales.

Williams-Sonoma B2B sales

B2B is already a substantial omnichannel sales channel, CEO Laura Alber told analysts on a recent earnings call.

“We set the ambitious goal this year to reach $1 billion in demand in our B2B business. And we came close, driving 27% year-over-year growth and 166% on a two-year basis,” Albers told analysts. “And we continue to win B2B accounts due to our design capabilities and the wide range of products offered in our multi-brand portfolio.”

Last year, Williams-Sonoma generated total revenue of $8.7 billion. Of that total, about two-thirds of sales, or $5.742 billion, is generated through ecommerce, the company says.

For the 26 weeks ended July 30, sales declined to $3.618 billion from $4.028 billion in the prior year. But one bright spot so far this year is sales from B2B, which are primarily ecommerce.

“We won several proposals across industry segments, including with Sony in the entertainment space; the San Antonio Spurs’ training facility; and multiple properties with the Montage, the Four Seasons, Westin, Hilton, and Hyatt,” Albers told analysts on the retailer’s second-quarter earnings call. “The trade business has been more impacted by the slowed housing market. However, we see recent improvement in our trend, and we remain confident on this piece of the B2B business long term.”

Sales in the B2B markets Williams-Sonoma serves, including hospitality and office supplies, are an $80 billion annual business where no one company owns substantial market share, the retailer says.

“Capturing 3% of the market share will drive an additional $16B+ in revenues (or triple our business today),” Williams-Sonoma says in a recent investor presentation.

“There’s some really exciting things going on in B2B,” Albers told analysts.

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How one furniture retailer combats fraud during online checkout

Gretchen Salois — Thu, 12 Oct 2023 13:15:20 +0000

After 25 years exclusively as B2B, outdoor furniture merchant Polywood shifted to include B2C to “own our own brand,” says Sean Valencourt, executive vice president of information systems.

As business grew, so did Polywood’s fraud risk, Valencourt says.

“We were actually targeted by a fraud ring,” he says. The retailer received multiple fraudulent orders, to the point where its manual process for flagging suspicious orders could no longer keep up, Valencourt says.

The retailer was in danger of hitting the 1% threshold where financial companies won’t allow a retailer to process its credit cards anymore, he says. For example, Visa has a 0.9% threshold. The financial institution issues an “early warning” when the percentage of fraudulent orders reaches 0.65%.

“We hadn’t gotten to that point, but we were approaching a 1% threshold on fraudulent orders,” Valencourt says.

The retailer turned to online payment and checkout platform Bolt. Instead of relying on employees to manually flag potential fraudulent orders, the retailer automated the process. That freed up employees to serve customer inquiries directly instead, Valencourt says.

It also increased conversion, Valencourt says. Polywood began using Bolt in 2018. The first year after adding Bolt, Polywood’s conversion rate increased 10% in 2019. By the end of 2020, conversion increased 20%, he says. That’s increased to about 50% conversion currently, he says.

Customer checkout rate

A portion of Polywood’s customers order furniture for locations other than their main home. Some are for second homes or other properties, for example. These orders were often flagged as fraudulent because the billing zip code did not match the shipping zip code.

“A bank might flag it and it hurts checkout,” he says.

That’s a big deal when the average order value for a Polywood order is around $1,000, he says.

Instead, Bolt automates this process and catches these details.

“Now, our customer service agents can answer customer questions like what product is right for them or sizing and colors about products,” Valencourt says.

Polywood uses Bolt as its default checkout processor. Customers can check out as a guest. They can also use Bolt if they’ve purchased through other retailers that also use Bolt or are saved in the Bolt network. This allows shoppers to check out quicker because their information is already stored with Bolt.

Polywood preventing fraud

Bolt flags fraud and offers Polywood the ability to track deliveries. As Polywood expands its customer base, the shopping process has grown more complex. There are split shipping and multiple manufacturing centers and warehouses to navigate, Valencourt says.

“We actually did start offering split shipping a couple of years ago,” he says. “But we didn’t really let the customer know what was going on. A customer might get half an order and call in saying they were missing part of it. They didn’t realize it was coming in a separate shipment. The customer service team didn’t either. They would send a replacement for the missing items only to find out the rest of the initial shipment arrived later.”

That Bolt network is growing, says Shilpi Narang, chief customer officer. The number of Polywood shoppers who check out using a Bolt account has more than doubled since the merchant went live with the vendor. Shoppers with a Bolt account constitute 30% of Polywood’s total volume of checkout as of September 2023.

Merchants don’t typically want to outsource their entire checkout process, Narang says.

“We work with them so they can keep their branded look while tapping into elements of our technology,” she says.

While merchants want an automated fraud and checkout solution, Narang says they also find value in Bolt’s growing network. The vendor claims that its shopper network includes tens of millions of U.S. shoppers and has grown year over year in 2023 by 44%.

“As we work with more merchants, especially with larger more complex merchants, we heard they wanted to increase conversion and leverage our shopper network,” she says. According to Narang, when a U.S. ecommerce merchants turns “on” Bolt, “immediately about 17% of their site traffic is recognized by Bolt,” she says.

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A veteran ecommerce marketer steps down at Overstock.com

Mark Brohan — Thu, 12 Oct 2023 13:00:43 +0000

A high-profile retail marketing executive with a long track record in ecommerce is leaving one of the oldest and most recognized online retailing companies.

Angela Hsu has stepped down as chief marketing officer at Overstock.com, which acquired the intellectual property assets of bankrupt retail chain Bed Bath & Beyond in June for about $21.5 million.

Angela Hsu

Overstock president Dave Nielsen has taken on Hsu’s responsibilities while a search for a new CMO gets underway. Hsu joined Overstock as CMO in March 2022. Hsu is leaving Bed Bath & Beyond and Overstock to pursue new opportunities.

“It’s been a pleasure being the CMO transforming Overstock.com into a 100% home furnishing retailer in 2022 and swiftly relaunching as the new online Bed Bath & Beyond in August 2023,” she says in a post on her LinkedIn page. “Now that this incredible period is a fait accompli, it’s time for me to refocus on one of my other passions: growing companies at the strategic level via board director roles.”

Overstock loses Hsu and her ecommerce background

Hsu has a long history as an ecommerce and retail marketing executive. Before joining Overstock, she worked for 19 years as senior vice president of marketing and ecommerce at lighting retailer Lamps Plus.

As chief marketing officer for Overstock, Hsu made $842,557 in total compensation in 2022.

Overstock.com ranks No. 50 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers. Bed Bath & Beyond ranked No. 47 prior to its bankruptcy.

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Ikea adds BNPL late in the game — why?

Gretchen Salois — Tue, 10 Oct 2023 12:45:05 +0000

Buy now, pay later (BNPL) allows consumers to pay for products or services in a series of interest-free installments. Housewares and home furnishings retailer Ikea added the payment option in September 2023.

“We know we’re a little late to the game with BNPL. But we really wanted to see how it was going to play out,” says Christine Briganti, financial services deployment project leader, Ikea

“After looking at BNPL, we’ve structured it in a thoughtful way to service a demographic at Ikea we weren’t serving properly,” Briganti says.

That demographic included consumers that don’t want an Ikea credit card or don’t qualify for one. Ikea already offers a private label Visa credit card that starts at $500.

“We wanted to make sure that the BNPL option wasn’t in direct competition with that,” she says.

Ikea uses Afterpay to offer customers the ability to pay using BNPL for purchases ranging from $40-$500.

Other retailers like Wayfair LLC began offering BNPL in 2016. Amazon.com Inc. in 2018 through Amazon Pay and then through Affirm in 2021, Walmart Inc. offered Affirm in 2019, and Target Corp. through Sezzle and Affirm in 2021.

“We know this is an inflationary time and coming out of this pandemic where people have lost jobs or taken jobs that pay less and they’re maxing out credit cards. We wanted to make sure that if you were not qualified for traditional credit, that this would help the consumer not overextend themselves,” Briganti says.

BNPL vs. credit cards

Unlike Afterpay, consumers that want to use a higher-amount-limit Ikea Visa must go through a traditional credit check and approval process. “Not everyone can qualify for a Visa card,” Briganti says.

“We had been approached by several vendors about offering a higher credit limit change. We might reevaluate in 2-5 years and bump it up,” Briganti says. “But for starting out, we have noticed quite a bit as default rates have gone up with higher limits that we did not want to risk the financial health of our consumers.”

The Ikea shopper is generally 20 to 40 years old, “and that demographic loves technology,” Briganti says. “So, we always wanted to bring BNPL to market. It just took us a while to evaluate what the rest of the market was doing.”

BNPL helps Ikea steer sales

With a lower limit, Briganti says BNPL helps the retailer “steer sales,” she says. “If you were going to buy a living room coffee table and you saw one for $100, but maybe there’s another for $200-$300, you might opt for the higher-priced table if you’re not paying cash for it upfront,” she says.

Jewelry, automotive parts, and apparel retailers most likely to offer BNPL

While more than half of the Top 1000 retailers offer BNPL, the top retailers differ in which  pay-in-installment vendor they offer. 18.3% of Top 1000 retailers offer PayPal credit, one of PayPal’s versions of BNPL, 14.7% offer Affirm, 13.3% offer Klarna, and 11.9% offer AfterPay, with other services coming in behind. 18.9% of retailers offer multiple BNPL vendors.

Jewelry, automotive parts, and apparel retailers are the most likely to offer BNPL. Food and beverage companies are the least likely, according to Top 1000 data.

Ikea is No. 7 in the Europe Database. The database ranks the region’s largest online retailers based on their web sales.

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The Container Store entices back-to-school college shoppers via text

Gretchen Salois — Wed, 20 Sep 2023 16:53:48 +0000

The Container Store turned to SMS and MMS and in-app push messages to entice back-to-school college shoppers. The program enrolled more than 175,000 subscribers, which was 45% higher compared with its 2022 college subscriber list.

The retailer continues to adjust how it engages with subscribers, says Sydney Hamilton, senior director of digital marketing.

“When we started this program back in 2021, it was about ‘how do we just get out there and make a name for ourselves in the college space?’” Hamilton says.

Shoppers can opt out. But, once subscribed, the retailer can re-engage with shoppers during other busy shopping periods.

This year, college-related sales exceeded expectations, Hamilton says, without revealing more. The retailer shared sign up details through signage in-store, online, email and through the header of the retailer’s website. The retailer’s back-to-school messaging campaign is growing in popularity. In 2022, The Container Store enrolled more than 121,000 subscribers, which was 61% higher year over year compared with 2021.

The Container Store shared sign up details through signage in-store, online, email and through the header of the retailer’s website for its college back-to-school messaging campaign.

Back to school SMS text campaign

The Container Store began texting college-bound shoppers last spring — well before school started, Hamilton says.

“We understand this isn’t necessarily the time when people start purchasing,” Hamilton says. “But we looked at when college-bound high school graduates start getting gifts at graduation parties. So we started engaging in April and May about e-gift cards.”

The retailer uses mobile marketing vendor Vibes to reach customers. It’s not always about a sale, Hamilton says. The engagement rate for SMS, MMS and in-app push messages around types of products have increased, she says. The software looks at the list of recipients and their engagement history to determine who is likely to convert at one of three send times a day, Hamilton says. Vibes then sends messages out during their respective engagement times.

“We’ll share the types of products we have and show items they could potentially be using,” Hamilton says. “It’s been a great way to keep people engaged outside of those prime shopping moments.”

Click through rates and promotions

The click through rate (CTR) varies. This year, the retailer sent a text featuring a $20-off promo code for coffee machine and accessories manufacturer Keurig that resulted in 9% CTR. The retailer’s benchmark is 5%. Click through time is best at about 10 a.m., Hamilton says. The text was optimized for send times, meaning that they sent the message on a single day but split it to send in the morning only to SMS subscribers who had shown to engage more with text messages in the mornings. The same logic was applied to texts sent in the afternoon. This resulted in higher engagement versus sending it to all college SMS subscribers at the same time, according to the retailer.

Click through rate is a metric that measures how effective an ad is by calculating the percentage of people who view an ad and then click on it. A benchmark is the typical percentage of consumers who click on a retailer’s content.

The Container Store also sent an SMS text with a 20% discount on 3-tier storage carts, stacking drawers and other storage items. These also saw strong engagement, particularly because the promotion was targeted to only subscribers that previously purchased storage products.

Filling in the Bed Bath & Beyond gap

In addition to targeting text subscribers to maximize engagement, the retailer also noticed an opportunity in 2023 after Bed Bath & Beyond filed for bankruptcy. Online-only home goods retailer Overstock.com purchased it and has rebranded as Bed Bath & Beyond in June 2023. The website went live in August 2023. The retailer was a go-to shopping destination for many back-to-school college students.

“With Bed Bath & Beyond no longer in the market, it did leave a whitespace [this year],” Hamilton says. “So we asked ourselves, where can we fill in?”

Hamilton says The Container Store customer is looking online as well as shopping in-store. A popular promotion is the retailer’s 25% off offer that shoppers can add to their wallet pass on the app, similar to Bed Bath & Beyond’s promotional discounts.

Going forward, Hamilton says the retailer also uses its app to connect with shoppers. In fiscal year 2022, which ended in March 2023, the retailer had 450,000 first-time app downloads.

The Container Store Inc. ranks No. 345 in the Top 1000, Digital Commerce 360’s ranking of North America’s online retailers by web sales.

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