Williams-Sonoma Inc.’s digital push, which includes increasing digital advertising and more personalization on its site and in its marketing material, is helping drive desired results for the home goods retailer .
Williams-Sonoma’s online sales rose 5.2% to $630.8 million in the fiscal second quarter from $599.7 million a year earlier.
The retailer’s total revenue for the quarter ended July 30 was $1.202 billion, up 3.7% from $1.159 billion in the year-ago quarter. E-commerce accounted for 52.5% of revenue compared with 51.7% in 2016’s second quarter. The retailer is No. 23 in the Internet Retailer 2017 Top 500.
For the first six months of fiscal 2017, e-commerce increased 3.0% to $1.211 billion from $1.176 billion. Total revenue grew 2.5% to $2.313 billion from $2.257 billion. E-commerce accounted for 52.4% of revenue compared with 52.1% in the year-ago period.
“Digital leadership is one of our highest priorities. We are increasing our investments to improve the customer experience and engagement and to drive profitable top-line growth,” said president and CEO Laura Alber last week on a conference call with analysts. “Year-to-date we have significantly increased our digital advertising investment and as a result we are seeing strong new customer accounts with higher traffic trends and increased orders.”
Expanded personalization efforts also are paying off, she said. “We have experienced an uplift in engagement and higher margins in our new personalization-based emails and we are seeing these same results translate to our site,” Alber said, according to a Seeking Alpha transcript. “By the end of the fiscal year we anticipate tripling the number of personalized impressions delivered on our websites enabled by both an expansion of personalization campaigns and improved customer identification.”
Williams-Sonoma’s brands include Mark and Graham, Pottery Barn, Pottery Barn Kids, PBteen, Rejuvenation, West Elm, Williams-Sonoma Home and Williams-Sonoma.
The West Elm brand, which focuses on housewares, launched its Pinterest Style Finder tool in July. The tool analyzes the attributes of items on consumers’ Pinterest boards and cross-references West Elm’s product catalog of more than 5,000 items to recommend further options. “This visual search tool is just one example of the artificial intelligence-based solutions that we are working on. It is a great complement to the efforts we are driving on the augmented reality [front],” Alber said.
In the third quarter, Williams-Sonoma will roll out additional e-commerce initiatives, including:
- A re-platforming of its mobile site to use Google’s progressive web app technology. Progressive web apps have the look and customer engagement of an app but they work on a mobile website. For example, PWAs typically load much faster than traditional mobile websites, allow retailers to send web push notifications to a shopper’s smartphone and let shoppers add an icon for that retailer’s site to their smartphone home screen without having to download the app.
- A redesign of product information pages to offer improved functionality, product information and storytelling, Alber said.
- A buy online, pick up in store service in the Williams-Sonoma brand stores this fall.
- A favorites feature offered on PotteryBarn.com will expand to the sites of all Williams-Sonoma brands. The feature allows shoppers to bookmark favorite products across the retailer’s desktop and mobile sites. “We’ve already seen great response with over 600,000 favorites in less than six weeks and the directly attributable revenue has exceeded our expectations,” Alber said.
- An enhanced customer order visibility platform will enable customers to better track the status of their furniture orders and receive text alerts. As it relates to damage free and speedy delivery, we’ve seen significant improvements in our metrics and are aggressively challenging ways to find further advancements.
William-Sonoma’s newer brands experienced double-digit sales growth, and international e-commerce growth also helped drive the retailer’s sales gains. “Rejuvenation and Mark and Graham once again delivered double-digit growth of over 25%, and our company-owned international businesses also delivered another quarter of double-digit revenue growth, primarily driven by the strong growth we continue to see in our e-commerce businesses in Australia and the U.K.,” chief financial officer Julie Whalen said.
For fiscal second quarter ended July 30, Williams-Sonoma also reported:
- Store sales increased 2.0% to $570.8 million from $559.4 million in the year-ago period.
- Cost of goods sold increased 4.1% to $778.9 million compared with $748.5 million.
- Net earnings of $52.9 million compared with $51.8 million.
For the first six months of fiscal 2017 the retailer reported:
- Store sales increased 1.9% to $1.102 billion from $1.081 billion in fiscal 2016.
- Cost of goods sold increased 2.8% to $1.495 billion from $1.454 billion.
- Net earnings of $92.5 million compared with $91.4 million.