Retail Sales and Earnings – E-Commerce the Winner

May 22, 2019


April’s retail sales announcement was a disappointment as core retail sales fell 0.2% and “non-store” retail sales (mostly e-commerce) also fell 0.2% in the period, according to the U.S. Department of Commerce. However, both measures saw year-over-year gains with core sales rising 2.8% and e-commerce 9%.

While April year-over-year growth for e-commerce retail sales were impressive, first quarter data from the U.S. Department of Commerce indicates that e-commerce continues to take a bigger share of total retail sales at 10.2% compared to 9.4% for first quarter 2018 and 9.9% for fourth quarter 2018. In terms of dollars, e-commerce retail sales were $137.7 billion during first quarter while total retail sales were $1,344.9 billion.

Indeed, Amazon’s first quarter total revenue increased 16.9% while such retailers as Walmart reported total revenues up only 1% and Kohls reported total sales down 2.9%. But, it is the e-commerce component of retailers such as Walmart and Kohls that is the shining star. Walmart reported its U.S. e-commerce sales grew by 37% while Kohls reported “high single-digit” online sales growth.

Walmart credited groceries as part of its e-commerce gains citing its last-mile delivery services as well as its order online and pickup at store concept.  Meanwhile, Kohls has established a unique relationship with Amazon whereby Kohls accepts Amazon returns at its stores. In fact, Kohls CEO said in their recent earnings call that its acceptance of returns for Amazon customers at all of its more than 1,150 U.S. locations starting this summer was the “single biggest initiative of the year.”

The Amazon-Kohls tie-up appears to be successful according to research from Earnest Research, Kohls stores near Chicago that accepted Amazon returns had a 9% increase in new customers last year; by contrast locations in other parts of the country that didn’t accept Amazon returns had a 1% increase in new customers.

Both Walmart and Kohls should be applauded for their investments in omnichannel solutions. For those retailers that do not choose to make such investments a high priority will be left behind. Remember Sears? Right now we, along with many analysts, are concerned about JC Penney. For the first quarter, JC Penney reported a net loss of $154 million and comparable sales down 5.5%. The retailer’s CEO said in a statement that she was “pleased with the strides” the company has made. But, the CEO said further that the transformation of 117-year-old Penney, “will take time”. As we noted on our LinkedIn page, time is not on the retailer’s side, particularly in such a rapidly evolving retail environment. Don’t get left behind, be like Walmart and Kohls.

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Retail Sales and Earnings – E-Commerce the Winner

May 22, 2019


April’s retail sales announcement was a disappointment as core retail sales fell 0.2% and “non-store” retail sales (mostly e-commerce) also fell 0.2% in the period, according to the U.S. Department of Commerce. However, both measures saw year-over-year gains with core sales rising 2.8% and e-commerce 9%.

While April year-over-year growth for e-commerce retail sales were impressive, first quarter data from the U.S. Department of Commerce indicates that e-commerce continues to take a bigger share of total retail sales at 10.2% compared to 9.4% for first quarter 2018 and 9.9% for fourth quarter 2018. In terms of dollars, e-commerce retail sales were $137.7 billion during first quarter while total retail sales were $1,344.9 billion.

Indeed, Amazon’s first quarter total revenue increased 16.9% while such retailers as Walmart reported total revenues up only 1% and Kohls reported total sales down 2.9%. But, it is the e-commerce component of retailers such as Walmart and Kohls that is the shining star. Walmart reported its U.S. e-commerce sales grew by 37% while Kohls reported “high single-digit” online sales growth.

Walmart credited groceries as part of its e-commerce gains citing its last-mile delivery services as well as its order online and pickup at store concept.  Meanwhile, Kohls has established a unique relationship with Amazon whereby Kohls accepts Amazon returns at its stores. In fact, Kohls CEO said in their recent earnings call that its acceptance of returns for Amazon customers at all of its more than 1,150 U.S. locations starting this summer was the “single biggest initiative of the year.”

The Amazon-Kohls tie-up appears to be successful according to research from Earnest Research, Kohls stores near Chicago that accepted Amazon returns had a 9% increase in new customers last year; by contrast locations in other parts of the country that didn’t accept Amazon returns had a 1% increase in new customers.

Both Walmart and Kohls should be applauded for their investments in omnichannel solutions. For those retailers that do not choose to make such investments a high priority will be left behind. Remember Sears? Right now we, along with many analysts, are concerned about JC Penney. For the first quarter, JC Penney reported a net loss of $154 million and comparable sales down 5.5%. The retailer’s CEO said in a statement that she was “pleased with the strides” the company has made. But, the CEO said further that the transformation of 117-year-old Penney, “will take time”. As we noted on our LinkedIn page, time is not on the retailer’s side, particularly in such a rapidly evolving retail environment. Don’t get left behind, be like Walmart and Kohls.

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