In 2020, ordering online and relying on ecommerce has been critical for consumers who couldn’t, or wouldn’t, shop the way they had before the pandemic. The positive impact of this shift to online purchasing has been unprecedented for many retailers. The Q3 earnings reports from Walmart, Target and Kohl’s show the immense impact digital strategies and ecommerce have had on revenues for these retailers, with solutions like in-store order fulfillment and omnichannel innovations proving to be game-changers for consumers and businesses alike.
Target: Curbside Pick-Up And Innovative Delivery Options Make The Difference
Like other retailers during the pandemic, Target saw a huge uptick in digital sales. John J. Mulligan, chief operating officer & executive vice president for Target, reported on the earnings call that “year-to-date digital sales of nearly $7 billion have already eclipsed our full-year digital sales in 2019,” but where the store really saw ecommerce innovation make a difference was in-store fulfillment. Consumers were still placing their orders online, but could avoid the worry of shipping issues by opting for curbside or in-store pick-up. Target stores became the hub of their own order fulfillment, bypassing externalities they couldn’t control and offering convenience to consumers when they needed it.
“Our stores actually drove more than 90% of our second quarter growth, given that they enabled more than three-quarters of our digital sales. As a result, the majority of our digital demand is driven by items that are already available in our stores, which positions us to efficiently rely on those locations to fulfill the demand. Among our store-enabled digital fulfillment options, we continue to see the most rapid growth in our same-day offerings, in-store pickup, drive-up and Shipt.” said Brian C. Cornell, Target chairman and CEO. Adding, “They're [the fulfillment options are] digital capabilities enhanced by human interaction, even though they are contactless. This explains why they generate some of the highest levels of satisfaction of anything we provide. Together, our same-day services saw more than 270% comp growth in the second quarter, outpacing overall digital growth.”
Walmart: Emphasis On Ecommerce Helped The Retailer See Record Sales
The necessary push to all things ecommerce has led to huge growth for Walmart, with the retailer reporting that ecommerce sales rose 79% , and overall revenue rose to $135 billion, a 6.1% increase. C. Douglas McMillon, Walmart president, CEO and director, reported that, despite a slow start to Q3 due to less back-to-school traffic, Walmart saw growth across a mix of categories. “Consistent with prior quarters, we saw continued strength in home, electronics, and sporting goods,” noted Brett M. Biggs, Walmart CFO and executive vice president. Adding, “Grocery sales also strengthened throughout the quarter, led by strong comp sales in food categories, helped by expanded store hours, improving in-stocks and strong price positioning.” Like Target, Walmart was helped by a mix of delivery options, including in-store pick-up. Sam’s Club in particular, benefitted from delivery options with ecommerce sales growth of 41% and “strong demand for direct-to-home delivery and increased Club Pickup.”
Walmart Marketplace, Walmart’s ecommerce solution for third-party sellers, was the “overall winner in the ecommerce business” according to John Furner, president & CEO of Walmart U.S., helping the retailer hit “comps in total to 79% for the quarter.”
Kohl’s: Bridging Ecommerce And Brick-And-Mortar As Consumers Become Omnichannel Shoppers
“Digital sales represented 32% of our [Kohl’s] total sales this quarter, increasing 25%. Our stores supported much of this growth, fulfilling nearly 40% of the digital sales. Kohl's is positioned to continue benefiting from the shift [to ecommerce]. We have an extremely healthy and flexible off-mall store base, a large and growing digital platform and compelling and differentiated omni capabilities, which reach our base of 65 million customers,” said Michelle D. Gass, CEO of Kohl’s. Although Kohl’s didn’t see unmitigated revenue growth like Target and Walmart, the brand was able to effectively grow its omnichannel usership. By focusing on modernizing in-store capabilities through fulfillment and product curation and ramping up ecommerce assets, Kohl’s was able to create a more diverse customer base. “Our omnichannel customer is six times more productive than a digital-only customer and four times more productive than a store-only customer,” said Gass.
In response to the growth of customers shopping both in store and online, Kohl’s has improved their Kohl’s Rewards program to include more seamless, digital integrations, such as customers easily accessing the balance of their Kohl’s cash online and automatic alerts of Kohl’s cash expiration dates.
Ecommerce And Digital Innovations Are The Present And Future Of Retail Growth
According to eMarketer, online shopping growth has accelerated to a point it wasn’t expected to hit until 2022. The pandemic and multiple worldwide crises have tasked consumers, brands and retailers with being flexible, innovative and agile. The earnings reports for Q3 illustrated just how powerful and necessary ecommerce solutions are for retailers that want to reach consumers, and how essential it is that businesses remain tuned in to the preferences of their shoppers.
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