In public life there may not be a second act for many politicos but in e-commerce apparently there is for Pier 1 Imports Inc.

After abandoning e-commerce the first time around in 2007 when the retailer’s annual online sales peaked at about $15 million, Pier 1 launched a limited comeback in 2010 and a full-scale return in 2012.

Now more than two years later e-commerce is clearly the growth driver and accounts for about 12% of total sales compared with 4.2% in the third quarter of 2013. Based on 12% and 4.2% of web sales as a percentage of total revenue, respectively, Internet Retailer estimates that Q3 web sales increased 196.4% to $58.1 million from $19.6 million in the previous year.

E-commerce grew nearly 80 times faster than comparable-store sales that increased 2.5%, and almost 50 times faster than total revenue that increased 4.1% to $484.5 million from $465.5 million. A big reason for the big jump in e-commerce is using Pier 1 stores to grow online, CEO Alex Smith told Wall Street analysts on the company’s third quarter earnings call, based on a transcript from SeekingAlpha.com.

In the latest quarter nearly one-third of all online sales were made in Pier 1’s 600 stores where sales personnel are equipped to order any merchandise from Pier1.com that a particular store doesn’t have in stock with web-enabled tablets. Items from Pier1.com also can be bought online and shipped to a local store for free pick-up. “Our decision to add more tools to our stores, a second personal computer, swatch stations as well as tablets to 600 locations is beginning to pay dividends,” Smith told analysts. “E-commerce orders placed in-store increased from approximately 25% of e-commerce sales last quarter to nearly 30% in Q3.”

Pier 1 also continues to enhance its e-commerce platform with more updated mobility capability such as updated apps, but didn’t disclose much detail. “The accelerated investment in functionality on Pier1.com, including mobile and tablet optimization is driving significant increases in conversion, and smartphone traffic surpassed desktop traffic for the first time in Pier1.com history on Thursday and Sunday of the Thanksgiving holiday weekend,” Smith told analysts. “Conversion on mobile devices was up 85%.”

Other factors contributing to rapid growth in e-commerce at Pier 1 is the opening of a web distribution center near Columbus, OH, in August. “There are multiple ways that our customer can purchase: point-of-sale, order at home pickup in store, order from home parcel service, order from home white glove delivery, order in store pickup in store, order in store parcel service,” Smith told analysts. “We opened our second e-commerce fulfillment center in August, which has enabled us to add capacity and shortened delivery time.”

For the first three quarters:

• Based on metrics listed in Pier 1 financial documents on file with the U.S. Securities & Exchange Commission, Internet Retailer estimates that e-commerce sales increased 227.5% to $138.2 million from $42.2 million in the first three quarters of 2013. In the first six months e-commerce accounted for 9.3% and 3.2% of all sales, respectively.
• Total sales increased 4.8 to $1.32 billion from $1.26 billion.
• The web accounted for 10.5% of total sales compared with 3.3% in the prior year.
• Net income was $42 million compared with $64.9 million in the first three quarters of 2013.

The retailer didn’t break out comparable-store sales.

“The company expects to achieve e-commerce sales of at least $200 million in fiscal 2015 and e-commerce sales of at least $400 million in fiscal 2016,” Pier 1 says. “This compares to previous expectations for e-commerce sales to comprise 10% of total sales by the end of fiscal 2016.”

 

Favorite