Dick’s Sporting Goods and Express Inc. both reported increasing fulfillment costs as they look to use physical retail locations to fulfill online orders. Online sales, however, are increasing for both Dick’s (No. 56 in the Internet Retailer 2017 Top 500) and Express (No. 102).
This week, several retailers reported their 2017 and fourth quarter earnings:
- Dick’s Sporting Goods’ e-commerce sales increased 13% in 2017 to surpass $1 billion in online sales for the year. President Lauren Hobart pointed to the company’s new web platform as a major growth driver for the year. Web glitches during the holiday season, however, caused Q4 online growth to slow to 9%. Holbart says the impact was “meaningful” but the problems are fixed. Similar to Walmart Inc. (No. 3), the cost of fulfilling online orders increased as Dick’s competed with Amazon.com Inc. (No. 1) on shipping. Fulfillment costs decreased overall profits, the retailer says. The majority of e-commerce orders during the quarter shipped from the company’s more than 800 stores.
- Express reported $509 million in web sales for 2017, up 23% year over year. E-commerce sales accounted for nearly a quarter of the company’s revenue. For the fourth quarter alone, the apparel brand did $203.3 million in online sales, up 20% year over year. Overall, the company’s total sales decreased 2% for the year to $2.1 billion. Express expects costs associated with e-commerce sales to rise over the next year as shipping rates increase and its e-commerce penetration rises. It will continue its plans to use its stores to fulfill online orders.
- Signet Jewelers Ltd. (No. 113) acquired R2Net, parent of JamesAllen.com (No. 140), this year, which helped boost e-commerce sales for its fourth quarter by 52.8% year over year. Web sales accounted for 11% of quarterly sales or $252.2 million. However, without the acquisition, online sales were up just 13%. Still, JamesAllen.com’s online sales alone increased 35% year over year in Q4. The company announced plans to use some of JamesAllen.com’s back-end technology to boost online sales of its other brands including Zales and Kay Jewelers.
- DSW Inc. (No. 146) had its strongest growth in online sales in nearly a decade during 2017, although the shoe retailer didn’t break out exact numbers. Internet Retailer estimates the merchant generated about $286 million in online sales in 2017. Mobile traffic is growing more than desktop traffic. The company’s mobile app is also seeing more action than ever, with 1.5 million downloads since launching and 5 times the monthly active users it had in 2016. Retail locations are also playing a big part in the company’s omnichannel operations, as stores fulfilled 40% of web orders during the holiday season.