A pandemic-ridden year pushed retailers with fleets of stores to lean on ecommerce. Consumers avoided crowded, public spaces and shifted buying habits, turning to digital to shop. Shoppers used retailers’ omnichannel services more than ever last year. For example, 35% of U.S. online shoppers picked up an order curbside in the past six months, up from 13% this time last year, according to 2021 and 2020 Digital Commerce 360 and Bizrate Insights surveys of 1,052 and 1,000 shoppers, respectively. Therefore, while online sales jumped for most retail chains, stores remained an important factor last year, particularly in how retailers fulfilled online orders.
Here’s how some of the large chains fared in a unique, digital-focused climate.
Best Buy Co. Inc.’s ecommerce grows 144%
Consumer electronics retailer Best Buy reported domestic online revenue of approximately $18.67 billion in its 2021 fiscal year ended Jan. 30, up 144% from $7.64 billion in the same period the year prior. Domestic eommerce sales accounted for roughly 40% of total sales in its fiscal 2021, up from 17.5% in 2019.
In its fiscal Q4 ended Jan 30., online sales grew 90% to a record $6.62 billion and accounted for 43% of domestic sales. Nearly two-thirds of online revenue was picked up in store or curbside, shipped from a store or delivered by a store employee, CEO Corie Barry said on a call with investors, according to a SeekingAlpha transcript. 48% of online orders were picked up at a store, up 90% year over year. Same-day shipping volume increased 376% year over year, and in-store employees delivered more than 1 million products to consumers.
The retailer made changes to the functionality within its mobile app to provide better customer service, executives said, resulting in new app users and more engagement within the app. First-time users of the app increased nearly 80%, and the average number of app visits per unique user rose 34%.
Total sales increased 7.8% to $43.39 billion from $40.11 billion for the year. In Q4, total sales were up 11.2% to $15.40 billion. Best Buy is ranked No. 10 is the 2020 Digital Commerce 360 Top 1000 ranking of the largest North American online retailers.
The Home Depot Co.’s online sales jump 86%
Online sales at hardware retailer Home Depot (No. 5) jumped 86% to $19.30 billion in its fiscal year 2020 ended Jan. 31. The retailer operates 2,000 stores in North America—all of which remained open during lockdowns. And its stores complemented online sales, as more than 60% of online orders were fulfilled through stores, the retail chain says.
Home Depot offered buy online pickup in store to its customers before the pandemic began, and that foundation allowed the retailer to launch curbside in a matter of days after COVID-19 hit the U.S., executives said on a call discussing the results with investors, according to a SeekingAlpha transcript.
Additionally, last year the retailer began live streaming workshops that it typically held in stores pre-COVID-19. “The live streaming platform has allowed us to go from an average of five in-store workshops per month to approximately 40 online live streaming workshops per month. These online workshops have driven a deeper level of engagement and connectivity with our participating customers,” Menear said.
Total sales increased 19.9% to $132.11 billion in Home Depot’s fiscal year ended Jan. 31. That means ecommerce represented 14.6% of total revenue.
Lowe’s Cos.’ ecommerce totaled $8.7 billion
Home Depot rival Lowe’s (No. 22) grew ecommerce sales 111% to approximately $8.70 billion during its fiscal year 2020 ended Jan. 29. Similar to Home Depot, approximately 60% of Lowe’s online orders were fulfilled from stores. To meet the demand of contactless pickups, the retailer launched curbside and buy online pick up in store lockers in Q1 and Q2 last year.
“We now have BOPIS lockers in over 1,200 stores with the goal of rolling out lockers to all U.S. stores by April, providing multiple contactless pickup options for our customers, we are meeting consumer demands to shop lows in whatever way they choose,” Joe McFarland, executive vice president of stores, said on a call discussing the results, according to a SeekingAlpha transcript.
Total sales jumped 24.2% to $89.60 billion in its fiscal year. That means ecommerce accounts for roughly 9.7% of revenue.
Kohl’s Corp.’s digital sales accounted for 40% of all sales
Ecommerce sales at apparel chain Kohl’s accounted for 40% of total sales in its 2020 fiscal year ended Jan. 30. That means online sales totaled $6.38 billion last year, up 40.8% from $4.53 billion. Total sales declined 20.1% to $15.96 billion for the year.
Like most retail chains, stores remain an integral part of Kohl’s revenue, and specifically, digital sales. 40% of online sales were fulfilled from stores in 2020, CEO Michelle Gass said on a call discussing the results with investors, according to a SeekingAlpha transcript. Additionally, digital sales are 10% higher in markets that have stores. Even more significant: Omnichannel customers spend four times more than a store-only shopper, and six times more than a digital-only customer, Gass said.
A key component of Kohl’s stores is its partnership with Amazon.com Inc., which allows customers to return Amazon orders at dedicated kiosks within Kohl’s stores. Executives have touted this partnership—that began in late 2017 as a trial run—as bringing in new customers to Kohl’s stores. 2020 was no different.
“In 2020, we can attribute at least 2 million new unique customers shopping at Kohl’s, as a result of the Amazon returns program, a third of which are millennial,” Gass said. Without providing more details, Gass said allowing Amazon returns in stores has contributed positively to sales and profit.
Gap Inc.’s ecommerce represented 45% of total revenue
Online sales accounted for approximately 45% of revenue for apparel retailer Gap Inc. (No. 23) in its fiscal year ended Jan. 30, up from 25% in 2019. That means online sales were $6.31 billion, up 54% from $4.09 billion.
Total sales declined 15.8% year over year to $13.8 billion from $16.38 billion. Seeing a need in the market after COVID-19 hit, Gap began selling face masks. The company sold more than $400 million masks in 2020, which represented approximately 3% of total sales. The retailer says masks sales drove new customer growth as well.
Mobile is the biggest driver of digital sales, CEO Sonia Syngal said on a call discussing the results with investors, according to a SeekingAlpha transcript. More than 50% of site traffic and 75% of online sales were from mobile devices, she said.
In 2020, Gap and Kanye West announced a partnership, which will be called Yeezy Gap, and have been at work designing products in Wyoming, where West has a ranch. The deal is for 10 years and includes apparel for men, women and kids. It does not include footwear, since the Yeezy brand is in a long-term deal with Adidas.
Looking forward, Gap expects digital to represent 50% of sales this year.
Nordstrom Inc.’s digital sales increased 17.4%
Digital sales increased 17.4% at apparel chain Nordstrom (No. 18). Ecommerce sales during its fiscal year 2020 ended Jan. 30, totaled $3.85 billion and accounted for 55% of total revenue, up from $3.28 billion in fiscal 2019 when it accounted for 33% of total revenue. Nordstrom gained 1.8 million new customers online in the fourth quarter alone, a 40% increase year over year. Total sales were down nearly 30% for the year.
Roughly 30% of online orders were fulfilled from stores and 10% of online orders were picked up in stores last year. “These capabilities allow us to increase delivery speed, customer spend and inventory efficiencies,” CEO Erik Nordstrom said on a call discussing the results with investors, according to a SeekingAlpha transcript.
Percentage changes may not align exactly with dollar figures due to rounding.Favorite