Many online markets and a few retailers are having a strong holiday sales season. Today, we’ve got a roundup of how some of the key players are doing. The Wall Street Journal reports on the challenges retailers are having and how they’re having to offer discounts to keep consumer interest. Prosper Insights & Analytics research shows 25% of consumers bought gifts this year from Amazon, up 10% over last year. Fortune says the use of online promotions by retailers is up 79% this year.
While retailers managed inventories carefully this year, Joseph Schmitt at AlixPartners said retailers “flinched” and started offering discounts to consumers. Jet.com, now a subsidiary of Walmart, is one of this year’s e-commerce success stories with Thanksgiving sales up 300% and average order size up 19%.
Ulta Beauty Q3 net sales rose 24.2% to $1.13 billion fueled in large part by online sales. CBRE Group estimates the total value of returned goods bought online this holiday season will range from $14 billion to nearly $29 billion. eMarketer says product returns from online sales range from 15% to 30%, a significant cost to retailers. Luggage designer and retailer Away has reached sales of $10 million, most of them online, in only its first year of operation.
What a Michael Kors Bag at Macy’s Says About Christmas Sales
Slashing prices can be a sign that a company is struggling to move its inventory, or a preplanned part of the pricing strategy. Both are on display as Christmas gets closer.
The rise of e-commerce has spread holiday sales out more evenly across November and December. As a result, sales aren’t as front-loaded toward Black Friday as they might once have been. That has made holiday pricing an increasingly complex task as retailers try to carefully time promotions while still selling some items at full price.
Evidence of that balancing act was starting to show when Heard on the Street made our third trip this week to four bricks-and-mortar stores— Macy’s, J.C. Penney, Ralph Lauren and Gap—to check up on the basket of five items we have been tracking at each of them. Via wsj.com
Report: Amazon widens lead on holiday sales
Amazon is outpacing its rivals this holiday season, according to a Prosper Insights & Analytics survey of nearly 7,000 U.S. adults conducted this month. More than one in four holiday shoppers say they’ve bought most of their gifts from Amazon this year, a 10% increase over from last year, according to the study Forbes reports.
Wal-Mart Stores Inc. took second place at 14.5%, lagging behind Amazon by nearly 50%, the study found. Target, Kohl’s, Macy’s, Best Buy, JC Penney, Toys “R” Us, eBay.com and Costco follow, in that order, Pam Goodfellow, Prosper Insights & Analytics Principal Analyst/Consumer Insights Director, said, writing in Forbes.
This is Amazon’s third straight winning holiday season, and it’s been steadily widening the gap with Wal-Mart (which nears 12 percentage points this year) over the past decade, Goodfellow said. In December 2006, for example, Wal-Mart held a 15-point lead over Amazon, she said. Via retaildive.com
Discounting Is Up So Far This Holiday Season, Crimping Retailer Sales
If it feels like the deals are deeper and more plentiful this holiday season, it’s not your imagination. The use of online promotions is up 79% this year.
Even though major retailers were much more careful to avoid over-ordering after last year’s hyper-promotional Christmas season, shoppers are winning their game of chicken with stores, holding out for even bigger deals than last year.
“It’s a race to the bottom,” Charles O’Shea, a retail analyst at Moody’s Investor Service told a media briefing on Wednesday. “This huge cycle has been fueled by the big guys.” Via fortune.com
Stores push deals, hope to lure shoppers for holiday stretch
Stores are pushing deals and incentives like free shipping for the final week of the holiday shopping season, as new numbers show people are so far spending at a bit of a slower pace than last year.
Retailers pared down their inventories and offered more exclusive merchandise this season in a bid to avoid having to offer big discounts that shoppers have come to expect. But customers seem willing to wait, and so stores are once again counting on last-minute buyers for the final stretch, particularly Saturday, which could be the busiest day of the year.
“This has really become a game of chicken. In that game of chicken, retailers once again were the ones who flinched,” said Joseph Schmitt, director at the retail consulting firm AlixPartners. Via nwitimes.com
Jet.com Holiday Sales Are Growing Fourfold Thanks to Wal-Mart
When Wal-Mart (NYSE:WMT) acquired Jet.com earlier this year, the majority of the focus was on what Jet, the e-commerce upstart, could do for Wal-Mart, the world’s largest retailer.
Mostly ignored was how Wal-Mart’s vast supply chain, logistics network, and infrastructure could help Jet, and the early results show that it’s made a significant difference.
In its second holiday season, Jet saw sales over the Thanksgiving weekend jump 300%, and the average order value was up 19%. Jet focused on key gift categories such as electronics, toys, home goods, and apparel and benefited from Wal-Mart’s supply-chain expertise, as the company was able to replenish its inventory faster and maintain higher in-stock rates. Via fool.com
Ulta forecasts strong holiday sales, fueled by e-commerce boom
Ulta Beauty beat analyst expectations for its third quarter and raised guidance as it continued to increase sales both in stores and online.
The beauty retailer’s Q3 net sales rose 24.2% to $1.13 billion from $910.7 million, beating FactSet analyst expectations for $1.11 billion. Q3 earnings were $1.40 per share, up from $1.11 in the same period last year and beating FactSet expectations for $1.37 per share.
Ulta’s Q3 same-store sales plus e-commerce rose 16.7%, up from an increase of 12.8% in the same quarter in fiscal 2015, driven by 11.1% growth in transactions and 5.6% growth in average ticket. E-commerce sales alone grew 59.1% to $73.6 million, up strongly from $46.2 million in the third quarter of fiscal 2015. Via retaildive.com
Holiday E-Commerce Returns May Reach $29 Billion, Impacts US Logistics Markets
Holiday season sales beget returns, but e-commerce sales more so says a new report by CBRE Group, Inc.
Based on that fact, CBRE Group, Inc. has released a report outlining the methods that retailers use to handle returns of e-commerce merchandise and recent improvements of those processes. Based on standard return rates for online sales, CBRE calculates that the total value of returned goods bought online this holiday season will range from $14 billion to nearly $29 billion.
Retailers’ processes for handling online returns, called reverse logistics, have added importance as e-commerce continues to grow by double-digit percentage rates on a year-to-year basis. Research firm eMarketer predicts that online sales will increase by 17 percent this holiday season to $95 billion. The return rate for goods bought online typically ranges from 15 percent to 30 percent, due to online shopping habits such as buying multiple versions of a product and deciding later which to keep. Via worldpropertyjournal.com
Away packs in a big first year
A year ago, luggage designer, manufacturer and retailer Away was just getting started. Now, it is closing a roller coaster of a year with sales exceeding $10 million, most of them online.
Away this year walked a similar path as several other fast-growing web merchants: It used the internet to disrupt and rewrite a product category by eschewing traditional sourcing and retail methods. Dollar Shave Club (razors, and No. 238 in the Internet Retailer 2016 Top 500 Guide), Casper (mattresses, No. 290) and Warby Parker (eyewear, No. 197) are also in this group.
Away co-founder and co-CEO Stephanie Korey, in fact, led supply chain operations at Warby Parker for four years before launching Away with Jen Rubio, who used to head up Warby Parker’s social media and later was apparel chain AllSaints’ global innovation lead. Via internetretailer.com
Retail roller coaster will continue
Analysts expect retailer discounts to continue through the holiday season and online sales to finish strong. Stay with us and Cashback Industry News will have regular sales updates right through the end of the holiday season.