Michaels ranks No. 111 in the Top 1000, Digital Commerce 360’s ranking of the 1000 largest online retailers in North America.

A tiered loyalty program allows better targeting

The crafting retailer created Michaels Rewards, which allows all members to earn 3% back in rewards for all purchases. It’s free to join, and customers who spend $300 or more in a year can earn 6% back in vouchers that can be used at the retailer.  

“Convenience and personalization are the most important elements in any membership program,” Bennett says. “Loyalty programs should not be developed with a one-size-fits-all approach, which is why we offer three tiers in our program.” 

A tiered reward system allows a retailer to offer the greatest savings to the most loyal customers, who will likely return to make more purchases in the future, Bennett says. That’s why Michaels added a credit card in the latest round of updates to its program, which comes with 9% back in rewards. Members without the credit card can reach a maximum of 6% in rewards. The credit card was something customers asked for when they gave Michaels feedback, she says.  

“This benefit of 9% in rewards is really meaningful for those customers who are stocking up on supplies frequently or run their own creative businesses,” that require craft supplies, Bennett says.   

Loyalty program membership is growing

Bennett says the program has “tens of millions” of members. Membership is growing 9.75% year over year. Plus, more than 50% of Micheals customers are rewards members, she says. She declined to share a specific membership number. 

“Members in the Rewards program are more likely to add more items to their baskets and make purchases more frequently than those not in the program thanks to the benefits of stacking up rewards points,” Bennett says.

For example, customers who reached the 6% reward level spend on average 2.8 times more than members in the 3% tier. Credit card holders in the 9% tier spend an average of four times more than customers without credit cards, she says.   

Retailers can use rewards strategically

Retail chains are good examples of retailers that can effectively use loyalty programs to their advantage, says Neil Saunders, managing director of retail analysis firm Global Data.  

While tiered programs like those employed here aren’t “strictly necessary,” Saunders says, they make a lot of sense.  

“Retailers want to give the best rewards to those who spend more so they can ensure their loyalty. They also use tiers to encourage people to spend more so they can move to a higher tier and get better rewards or benefits,” he says. 

The potential downside is that consumers in lower tiers may not feel as valued. However, personalized rewards like a birthday gift can combat this and keep consumers engaged, he says.  

Loyalty programs in the Top 1000

Fewer than one-third of Top 1000 retailers have a loyalty program. The number of Top 1000 retailers with loyalty programs has grown 16.8% since 2019, according to Digital Commerce 360 data. The majority of the growth took place in 2020, and has remained nearly flat since. 

Though not strictly necessary, “rewards programs can be very useful for retailers both because they enable them to gather information about customers and drive certain behaviors,” Saunders says.

If a retailer does choose to use a rewards program, it must have a clear purpose, he says. 

“Is it to increase loyalty, to stimulate consumers into spending more, to gather data, to improve price perceptions, and so on? Knowing the purpose is vital as it then allows retailers to work out the cost of a scheme versus the potential reward,” Saunders says. 

Retail chains are far more likely than other merchant types to have loyalty programs. 48.1% of retail chains have a free loyalty program. That’s compared to 26.5% of consumer brand manufacturers, the next highest merchant type. Retail chains with loyalty programs generated $164.47 billion in web sales for Top 1000 retailers in 2022, 46.8% of total sales in the category.  

This high penetration of retail chains having loyalty programs could be because they are more likely than other types of merchants to have the resources and finances to implement an effect rewards program, Saunders says.  

“Chains have a very large base of customers, so rewards schemes make sense in terms of allowing them to gather data and use incentives to encourage more buying,” he says. Because these programs are so common among retail chains, consumers are also more likely to expect them, he says. 

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Michaels ranks No. 111 in the Digital Commerce 360 Top 1000 database.

Michaels MakerPlace competes with Etsy

The retailer launched its marketplace following a successful three-month beta test, the retailer said. 

MakerPlace is positioned as a competitor to Etsy Inc. In addition to handmade products, Michaels MakerPlace sellers can sell places in virtual classes and how-to guides.

Handmade bud vases for sales on Michaels MakerPlace.

“Our research found that nearly three in four makers believe there’s a void in the online marketplace landscape today, and that existing platforms come with pain points like high upfront costs, increasing fees for product listings and competition with an overflow of mass-produced goods,” says Heather Bennett, executive vice president of marketing and ecommerce at Michaels. “MakerPlace by Michaels was designed in direct response to these challenges with the goal of helping handmade artists and makers succeed,” she says.

Michaels MakerPlace doesn’t charge a listing fee to sellers. It charges a 4% referral fee to sellers on its basic subscription plan, along with a 2% referral fee to sellers in the professional tier, which costs $9.98 per month. All sellers pay a transaction fee of 3% plus $0.20 per item.

In comparison, Etsy charges a $0.20 listing fee and a 6.5% transaction fee. Etsy ranks No. 17 in Digital Commerce 360’s ranking of the Top 100 online marketplaces by GMV.

Why add an online marketplace?

Starting an online marketplace puts Michaels in good company. 40 retailers in the Top 1000 operate a consumer marketplace, with 23 those in the Top 100, according to Digital Commerce 360 research. 

“For retailers like Michaels, with specific audiences, adding a marketplace expands selection in a way that consumers appreciate,” says James Risley, research data manager and senior analyst at Digital Commerce 360.

Michaels can lend its name recognition and trust among consumers to marketplace sellers, and consumers might then feel safer buying those items from a known source, he says. It’s also a way to generate revenue beyond selling goods, with the learning component in the marketplace.

“With Michaels’ solution, there’s a little risk in moderation, making sure a woodworking class isn’t turned into a venue for how to make weapons. But I think it’s a good niche for this kind of non-goods marketplace,” Risley says.

MakerPlace will operate alongside the other third-party marketplace Michaels launched in February. That marketplace appears on Michaels.com alongside first-party goods, and expanded Michaels online offerings to more than 1 million SKUs.

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This morning, Beyond, No. 50 in the Top 1000, announced that CEO Jonathan Johnson has stepped down. Johnson’s departure follows mutual agreement by the Beyond board and Johnson to transition the company to new leadership, Beyond says. The hunt for a new CEO is underway. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers. Bed Bath & Beyond ranked No. 47 prior to its bankruptcy.

Beyond begins CEO hunt

While the search proceeds, company president David Nielsen will serve as interim CEO. Adrianne Lee, chief financial officer, will expand her responsibilities to oversee legal and human resources functions in addition to the finance organization.

As president, Nielsen oversees the company’s marketing, algorithms, customer, digital, technology, and sourcing and operations organizations. Prior to this role, Nielsen served as Overstock’s chief sourcing and operations officer.

“Following the recent acquisition of the Bed Bath & Beyond brand and our corporate renaming as Beyond, Inc., the board and Jonathan determined that this is the ideal time for a transition in leadership to guide the company forward,” says board chairman Allison H. Abraham.

In 2022, Johnson made total compensation of about $2.95 million, including a base salary of $871,154, according to company filings with the U.S. Securities and Exchange Commission. Nielsen in 2022 earned $1.41 million in compensation that included a base salary of $573,077.

In September, Angela Hsu stepped down as chief marketing officer at Overstock.com, which acquired the intellectual property assets of bankrupt retail chain Bed Bath & Beyond in June for about $21.5 million. As chief marketing officer for Overstock, Hsu made $842,557 in total compensation in 2022 .

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It’s No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV.

“We already have made these investments, technologies,” Witcher said, speaking from Amazon’s perspective. “How do we create incremental revenue by applying those sunk costs to new opportunities for others to take advantage of those costs where we can benefit in a financial way? This has been part of Amazon’s strategy for quite a while.”

Andy Jassy, Amazon’s CEO, spoke about different SaaS initiatives on a recent earnings call with investors for its fiscal third quarter ended Sept. 30, 2023.

Amazon’s fastest-growing sectors are ads and seller services, said James Risley, research data manager and senior analyst at Digital Commerce 360.

It shows that “while Amazon’s online stores are still growing well, its third-party sellers are the real growth leaders for the company,” Risley said. “Online stores only grew 2.0% in the first half of the year, though, and grew 7.0% in Q3, so the momentum is strong for first-party sales as Amazon potentially shifts its focus ahead of government pressure and a more savvy consumer who prefers direct relationships with sellers.”

Supply Chain by Amazon changes the fulfillment game

Two key Amazon software-as-a-service programs Jassy addressed were Supply Chain by Amazon and a growing generative AI initiative. New Amazon generative AI technology gives merchants the ability to create web pages and product imagery “with nearly endless flexibility,” calling it, along with Supply Chain by Amazon and AWS “the democratization of technology.”

Jassy said the company has seen “very positive early response from sellers to Supply Chain by Amazon.”

Supply Chain by Amazon is a fully automated set of services in which the mass merchant handles:

• Inventory pickup
• Shipping
• Customs clearance
• Ground transportation
• Inventory storage
• Replenishment

Amazon has been making “huge investments” in supply chain for more than a decade, Witcher said. The idea was that Amazon would eventually reach scale and those investments would pay off, he added.

“I think you’re starting to see that now, particularly because they’re starting to outsource delivery as a service,” Witcher said.

Amazon already has the infrastructure in place, so these are sunk costs, he said.

Amazon software as a service (SaaS) can change the game for third-party sellers

“Generative AI developments should be given more weight than Amazon let on,” Witcher said. “Using this innovative technology really gives Amazon the operational efficiencies in inventory planning and route planning that they need to realize the ROI of all these investments they made in supply chain.”

Witcher said AWS was the proof of concept that Amazon can create incremental revenue from its existing services and offerings. He said Fulfilled by Amazon (FBA) “clearly” works for a lot of sellers.

“Now, Amazon’s removing the pain points of being a small-business seller,” Witcher said. “Nobody gets into the retail business saying, ‘I can’t wait to build web pages’ or do photoshoots. That’s not why they get into selling products. They want to sell products. Amazon understands this, and so they’re using this in a way to make it easier for third-party sellers to have that Amazon relationship and make more reasons to say why they should have the Amazon relationship. I think that’s really what this comes right down to.”

Generative AI technology and the Amazon ecosystem

Witcher said Amazon understands that mom-and-pop shops and small companies don’t necessarily have the time or skill set to generate web pages and product imagery.

“The ability to use generative AI just helps those sellers,” Witcher said. “There’s a compounding effect to this, which is: The easier it is for me to build websites, the easier it is for me to upload product pages. Then, it’s easier for me to sell on Amazon. Well, if I’m already selling on Amazon, then it’s easier for me to give Amazon my supply chain, pay for them to do my supply chain, pay for them to have Amazon Pay on my website. It just bakes you deeper into the ecosystem of Amazon as you start to find value in the things Amazon offers.”

He added that this is “certainly a differentiator” for Amazon compared with other marketplaces. However, he said, he expects other retailers to follow suit.

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Parentheses indicate the merchant’s ranking in the Top 1000.

Amazon.com Inc. (No. 1)

Amazon recorded its highest operating income ever in the third quarter ended Sept. 30. Operating income nearly quadrupled year over year, growing 343%.

Read more about Amazon’s earnings here. 

Canada Goose Holdings Inc. (No. 154)

Canada Goose reported total revenue grew 1% to $281.1 million in its fiscal third quarter ended Oct. 1. Direct-to-consumer revenue grew 15% in the same period, while comparable DTC sales declined 7%. Comparable store sales grew, but not enough to offset ecommerce declines, the retailer said in a statement. Though online sales were down, website visits to product pages increased in the quarter, Canada Goose says.

E.l.f. Cosmetics Inc. (No. 950)

Beauty retailer e.l.f. reported net sales grew 76% to $215.5 million in its fiscal second quarter ended Sept. 30. The growth was attributed to strong sales both in stores and online. Ecommerce made up about 17% of sales in the quarter, the retailer says. The e.l.f. app and loyalty program are also both growing quickly, the retailer says.

Etsy Inc. (Marketplace No. 17)

Etsy reported consolidated revenue grew 7.0% to $636.3 million in the third quarter ended Sept. 30. Gross merchandise sales on the platform grew 1.2% in the period, to $3 billion. Meanwhile, active buyers grew 3.4%, and active sellers grew 19.0%.

Read more about Etsy earnings here.

Pitney Bowes

Pitney Bowes reported revenue declined 6% to $784 million in the third quarter ended Sept. 30. Global Ecommerce, the sector of the shipping vendor that handles B2C fulfillment services, reported a revenue decline of 12% to $313 million. Domestic parcel revenue grew 29% and volume grew 38%, offset by declines in international revenue.

“We recognize that the level of losses that we’ve been reporting in that segment are not sustainable,” Jason Dies, interim CEO, told investors of the Global Ecommerce segment in an earnings call. 

Pitney Bowes is a shipping carrier for 104 retailers in the Top 1000.

Revolve Group Inc. (No. 87 in the Top 1000)

Revolve reported net sales declined 4% in the third quarter ended Sept. 30. Expenses increased over the same period due in part to a pending legal case, leading to a 73% decline in net income to $3.2 million.

Revolve did not share specifics on online sales, but said sales through TikTok shop “increased meaningfully” over Q2. The retailer plans to expand its TikTok presence in the future.

Shopify Inc.

Shopify reported total revenue grew 25% to $1.7 billion in the third quarter ended Sept. 30. Gross merchandise volume, the total value of merchant sales across Shopify’s systems, increased 22% to $55 billion. Gross profit also grew, up 36% to $901 million.

45 retailers in the Top 1000 use Shopify. They account for a combined $8.30 billion in web sales annually.

Target Corp (No. 5)

Target announced that digital sales declined 10.5% year over year in the fiscal second quarter ended July 29. The retailer’s Drive-Up service led online sales, Target says.

Meanwhile, comparable in-store sales declined 4.3% versus Q2 last year. Target’s total revenue in Q2 reached $24.8 billion. That’s down 4.9% year over year. Operating profit after taxes was $3.89 billion, down from $4.63 billion in the year-ago period. Read more here.

Walmart (No. 2)

Walmart announced that U.S. online sales grew 24% for its fiscal second quarter ended July 28. International ecommerce sales grew 26%. Ecommerce sales were fueled by pickup and delivery orders.

Over the same period, comparable in-store sales grew more modestly, up 6.4%, excluding fuel. Total revenue grew, too, by 5.7% to $161.6 billion. Read more here.

Wayfair Inc. (No. 10)

Wayfair reported total net revenue increased 3.7% to $2.9 billion in the third quarter ended Sept. 30.

The online furniture retailer reported a larger increase in U.S. net revenue, which grew 5.4% to $2.6 billion. Meanwhile, international revenue declined 7.0% over the same period. Net loss was $163 million.

Read more about Wayfair’s earnings results here.

So what does it mean?

• Apparel results were mixed, but Revolve’s involvement with TikTok shop hints at future possible avenues of growth for savvy retailers.
• Pitney Bowes reported volume declines similar to what UPS previously recorded. Both fulfillment vendors will rely on the upcoming holiday season to reinvigorate business.

Ecommerce earnings calendar

Here’s when to expect other ecommerce earnings this quarter:

• Amazon.com Inc.: Oct. 26
• Best Buy Co Inc.: Nov. 21
• Chewy Inc.: Dec. 6
• Costco Wholesale Corp.: Dec. 14
• The Gap Inc.: Nov. 16
• The Home Depot Inc.: Nov. 14
• Lowe’s Cos Inc.: Nov. 21
• Macy’s Inc.: Nov. 16
• Target Corp.: Nov. 15
• Walmart Inc.: Nov. 16

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In the year ahead, many retailers and brands will turn away from that strategy and focus instead on adding specific pieces of ecommerce technology that address pressing needs and promise a quick ROI, Forrester Research Inc. says in its recently released “Predictions 2024: Digital Commerce” report.

Emily Pfeiffer, principal analyst, Forrester Research Inc.

Retailers and other types of companies are driven to seek new solutions when existing ecommerce systems that impact customer-facing transactions and internal processes are unable to meet new needs, says report co-author Emily Pfeiffer. For example, many retailers and brands have inventory systems that do a good job of tracking merchandise from suppliers to distribution centers to customers. However, they are not designed to provide online shoppers with real-time information about inventory availability.

Commerce teams move away from replatforming to ‘point solutions’

Those inventory systems and other components of ecommerce operations, Pfeiffer says, “would have a very high cost to rip and replace.” Instead, she says, more companies are leaving those systems in place for now and seeking add-on technology that addresses the pressing needs they currently face.

“And that is the right way to think about it,” Pfeiffer says. “I have a business problem, what capability will solve it, what tech function will give me that capability, let me go add that. Those are the types of moves we see coming in the next year.”

Pfeiffer, a principal analyst at Forrester, isn’t surprised by this development. In last year’s report, she and her colleagues predicted that one-third of organizations that tried to “play software company” by piecing together combinations of function-specific technology would regret they did. She believes that prediction was on the money.

In response, Forrester predicts that fewer companies will attempt big initiatives to refresh their ecommerce technology infrastructure. It also predicts that “smaller, targeted moves will replace half of major replatforming projects.”

2024 Leading Vendors to the Top 1000 Retailers Report

Analysis of the leading vendors that serve North America's Top 1000 online retailers. Includes rankings of the Top 10 leading vendors across 24 categories, including Customer Relationship Management, Ecommerce Platforms, Fulfillment Services, Marketing Automation Platforms, and more.

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In many cases, those smaller moves will consist of retailers and brands looking for a “point solution,” technology that addresses their specific problem. While that may lead them to new vendors, she says it’s a good idea to determine what a retailer’s current vendor offers, as ecommerce tech providers are constantly acquiring companies with specialized expertise and innovating themselves.

“Start with your trusted vendor, then look at point solutions,” Pfeiffer says. “The last resort should be a major replatforming.”

Other ecommerce technology predictions for 2024

Besides predicting a shift to more targeted tech investments, the Forrester report makes four other predictions for 2024:

1. At least one-quarter of digital tech spending will shift away from maintenance.

Given the need for flexibility today, “businesses will realize they can’t keep throwing good money after bad. They’ll spend less on maintaining legacy systems — and on the partners that support them — as they finally move to eliminate outdated tech instead of paying to keep it on life support.”
With many tech budgets tight, Pfeiffer says she and her colleagues hope companies will “put money into things that will move them forward instead of automatically writing that check” to maintain the systems they have in place.

2. Only one-quarter of businesses will benefit from digital commerce initiatives based on generative AI.

Retailers will be constrained by consumers demanding more control over their personal data and new AI-related regulations, Forrester predicts.
“Trust is everything,” Pfeiffer says. “Make it really clear what data is being used, how it’s being used and give customers control if they want it not to be used.”

3. Social media giants will partner with three retail media networks for commerce.

Forrester doesn’t predict which three retailers’ advertising networks will partner with social networks. But it points to examples such as Meta Platforms Inc., owner of Facebook and Instagram, working with retailer Dollar Tree. It also points to Pinterest working with U.K. retailer Tesco.
Such relationships, Forrester says, will leverage customer data to make purchasing on social networks more appealing. And social commerce is yet to take off among U.S. consumers overall. However, a 2022 Forrester survey found 61% of U.S. online adults under 25 had completed a purchase on a social network.

4. Six percent of businesses will boost employee productivity with computer vision and augmented reality.

Examples include store associates, warehouse workers and B2B salespeople using cameras on mobile devices to capture physical data and get recommendations on the best actions to take. Already, 4% of retail and wholesale workers say they used augmented or mixed reality tools on their jobs weekly. Forrester projects an increase of at least 50%, to 6% or more, in the coming year.
“Digital businesses should initially adopt these tools as tests with clearly defined desired outcomes — and then carefully monitor the impact on those intended results and goals,” the Forrester report advises.

In addition to Pfeiffer, Forrester analysts Lauren Cevallos, Chuck Gahun and Brendan Witcher co-authored the 2024 digital commerce predictions report. They had input from Fiona Swerdlow, Keith Johnston, Kelsey Chickering, Joe Cicman, J. P. Gownder and Delilah Gonzalez.

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True Religion ranks No. 892 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest online retailers in North America.

True Religion’s holiday plans

True Religion’s digital holiday campaign is called “Style is a gift,” says Kristen D’Arcy, chief marketing officer. It’s based around the idea of giving True Religion jeans as a gift. The campaign will incorporate influencers, musical artist Quavo, and the Los Angeles Rams leading up to the holiday season.

Quavo poses for True Religion’s holiday campaign.

Like many retailers, True Religion typically records its highest sales volume of the year in the fourth quarter, D’Arcy says. That makes successful holiday marketing even more important, because of the potential for even more sales and gifting. 

True Religion’s holiday campaign will involve influencers with varying follower counts, D’Arcy says, from larger influencers to micro- and nano-influencers. Each week, a different influencer will take over True Religion’s Instagram account to post about the retailer as a gifting destination. 

Customer engagement is important to True Religion this year, D’Arcy says. In addition to the Instagram takeovers, the brand will launch a meme generator to encourage consumers to engage directly with it.

“So they [users] will be able to take a picture of absolutely anything. And then we will auto-generate a word to complete the line. Blank is a gift,” D’Arcy says.

True Religion will launch a meme generator as part of its holiday campaign.

True Religion launched its holiday campaign in October, earlier than in previous years. That was an intentional choice, D’Arcy says. The retailer studied consumer behavior and Google search trends, alongside information from consumer research firms like McKinsey and Deloitte.

“What they are all saying across the board is that people are going to shop earlier, but there’s still a bulk of people that will wait for the big deal moment in November,” she says.

So, True Religion launched an early holiday campaign to enter consumers’ consideration for gifting, with plans to unveil further deals in the traditional Cyber 5 period.

Traffic growth across channels

True Religion is doing well with brand awareness, but it takes an extra push to get consumers to consider the retailer for holiday gifting, D’Arcy says. That’s where the holiday campaign comes in. True Religion started setting the stage for the campaign earlier, with efforts to boost web traffic.

D’Arcy attributes traffic growth to several factors. First, True Religion is in the middle of a repositioning of who its core customer is. The retailer is now targeting 25- to 45-year-olds, and styling photos and campaigns more attuned to that audience as a result. 

Second, True Religion gained online traction from its involvement in New York Fashion Week in the form of comments and mentions on social media, D’Arcy says. Follower counts began rising 10% week over week, the highest it had experienced in a long time, she said without specifying further.

Then, a “tremendous amount of traffic” started coming to the website from consumers going directly to the retailer’s URL, she said. At the same time, paid social ads started to perform better, and organic social traffic grew to numbers normally only seen during the holidays. So far, October web traffic is up double digits over last year, she says.

The growing traffic and engagement are already turning into sales, D’Arcy says without giving more details. The engagement and social media mentions create a “halo effect” that continues itself, she says.

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While ecommerce is a popular sales channel with consumers, off-price retailing is centered around attracting in-store traffic, which allows consumers to search for and discover bargains. That concept does not necessarily translate well to ecommerce, especially when off-price retailers’ catalogs and inventory are continually in flux, ecommerce experts say.

HomeGoods, which is a brand of parent The TJX Companies Inc., shuttered its online store Oct. 21, about two years after launching the site.

TJX Cos. Inc. ranks No. 69 in the Top 1000. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in North America by web sales. HomeGoods does not rank independently in the Top 1000. TJX’s brands include Marshalls, TJ Maxx and Homesense.

“Being able to walk an off-price retailer’s aisles and search and discover is part of the appeal of off-price retailing to consumers,” says Brendan Witcher, vice president, principal analyst, Digital Business Strategy for Forrester. “It’s really not surprising that HomeGoods opted to stop selling online, because the question always surrounding the store was ‘would it work?’”

Why did HomeGoods stop selling online?

The decision to stop selling online was prompted in part by HomeGoods’ decision to focus more resources on its brick-and-mortar locations.

“We’ve made the decision to focus our resources on our more than 900 brick-and-mortar stores across the United States, where we invite our passionate HomeGoods.com customers to continue shopping for home fashion and décor,” HomeGoods said in a statement. “Customers may also continue to shop online at our sister sites www.tjmaxx.com, www.marshalls.com, and www.sierra.com, which will not be affected by this decision.”

HomeGoods reportedly notified its customers Oct. 18 via email that it would stop selling online Oct. 21. HomeGoods says it will fulfill and ship all online orders placed prior to closing. The retailer adds that all employees affected by the decision are being offered other jobs within the company.

HomeGoods’ online sales weren’t enough

Another likely factor contributing to HomeGoods’ decision to shutter its online store is ecommerce sales weren’t strong. In a 10-K statement filed in March, the retailer noted that HomeGoods.com “represented less than 1% of HomeGoods net sales for fiscal 2023 and fiscal 2022, and did not have a significant impact on year-over-year segment margin comparisons.”

In the same filing, HomeGoods noted its total net sales were $8.3 billion for fiscal 2023, compared to $9 billion for fiscal 2022, an 8% decrease. The decrease in net sales reflects an 11% decrease from comp store sales, partially offset by a 3% increase from non-comp store sales, the retailer says in the 10-K.

Overall, ecommerce sales remain “a very small portion” of parent TJX’s overall sales, TJX executives told analysts during an August earnings call. Digital Commerce 360 research estimates ecommerce made up about 10% of total TJX sales in 2022. That would amount to a 4.8% year over year increase, according to Digital Commerce 360 data.

TJX reported total net sales grew 8% year over year to $12.8 billion in its fiscal 2024 second quarter. Comparable store sales also grew 6% during the period. That’s “well above the company’s plan, and entirely driven by customer traffic,” the retailer said in a statement.

Off-price retailers’ battle with ecommerce

HomeGoods is not the first off-price retrial to venture into ecommerce, then pull the plug on the strategy, Witcher notes. In 2020, Burlington Coat Factory announced it was shuttering its ecommerce business. It accounted for just 0.5% of total sales.

“Burlington Coat Factory tried [ecommerce] and had a lot of the same problems,” Witcher says. “HomeGoods knew selling online would be difficult. It was an experiment that didn’t work, but it was good they tried.”

One of the key challenges off-price retailers face in ecommerce is keeping their catalogs current. They typically carry end-of-season stock, closeouts, overruns, returns, and excess inventory. As a result, retailers typically limit quantities. Items tend to sell out fast, and retailers may not replenish them in such cases. Hence, shopping at an off-price retailer’s store is like going on a treasure hunt for consumers. They don’t always know what discounted gems they will unearth.

“It’s not easy to go through all of an ecommerce retailer’s products online,” Witcher says. “Plus, consumers can’t physically examine products, whereas in-store, consumers can walk the entire store in about 10 minutes. For off-price retailers, their advantage is the physical store.”

HomeGoods’ exit from ecommerce should serve as a lesson to off-price retailers about how difficult it is to sell online.

“The myth that ecommerce will automatically be profitable is not true,” Witcher says. “Not all ecommerce ventures will be profitable. “This is a good lesson for all retailers, not just off-price retailers.”

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“Buy Buy Baby is back and is guaranteed to be better than ever,” says a spokesperson for the revived retailer.

The company planned to unveil its ecommerce site offering baby and maternal products in October ahead of the stores, but late in the month, it rescheduled both the online and store openings for simultaneous launch in mid-November. The spokesperson didn’t say why. The stores will be in locations ranging from Maryland to Massachusetts.

Buy Buy Baby had 115 stores nationwide earlier in 2023, but they all closed this summer after parent company Bed Bath & Beyond Inc. filed for bankruptcy in April. Piscataway, New Jersey-based Dream On Me Inc., a manufacturer of cribs and other nursery furniture that had been a vendor to the old Buy Buy Baby, acquired the defunct retailer’s intellectual property out of bankruptcy for $15.5 million in July, the business publication NJBiz reported. In a separate auction, Dream On Me also acquired 11 Buy Buy Baby store leases in the Northeast for $1.17 million. Those locations will be the first of more than 100 planned stores to reopen, according to NJBiz.

What’s next for Buy Buy Baby and its ecommerce site

For the moment, Buy Buy Baby isn’t revealing much about its coming ecommerce site and mobile app.

In a statement, the spokesperson says “shoppers can engage with their favorite brands and receive expert advice to find the right products. Customers can also download the registry app in-store and on buybuybaby.com and scan items directly from their phones to add to the registry.” She adds that Buy Buy Baby will have “a fully ownable registry experience where customers directly add and purchase items off the dedicated app.”

The spokesperson says company executives won’t be giving interviews until about the time of launch. Buy Buy Baby’s new chief executive officer is Pete Daleiden, who came to the company in August from retailer Bealls Inc., where he worked for about a year in senior merchandising positions. Before that, he spent 16 years at Bed Bath & Beyond, mostly as a merchandising executive, according to his LinkedIn profile.

Online retailer Overstock.com Inc. acquired Bed Bath & Beyond’s intellectual property in June for $21.5 million and has taken the Bed Bath & Beyond moniker as its brand name, although the firm’s legal name remains Overstock.

Overstock.com ranks No. 50 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers. Bed Bath & Beyond ranked No. 47 prior to its bankruptcy.

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Parentheses indicate the merchant’s ranking in the Top 1000.

Amazon.com Inc. (No. 1)

Amazon recorded its highest operating income ever in the third quarter ended Sept. 30. Operating income nearly quadrupled year over year, growing 343%.

Read more about Amazon’s earnings here. 

Columbia Sportswear Co. (No. 149)

Columbia reported net sales grew 3% in its fiscal third quarter ended Sept. 30, 2023. Growth was balanced between wholesale and direct-to-consumer channels, it said. Physical stores are outperforming ecommerce within direct to consumer.

“Consumer demand for soft goods, including apparel, footwear, remains weak,” Tim Boyle, CEO, said in an earnings call.

Deckers Brands (No. 74)

Deckers reported revenue grew 25% to $1.1 billion in its second fiscal quarter of 2024 ended Sept. 30. Direct-to-consumer net sales increased 38.8% to $331.7 million.

“Consumer demand was robust in stores and online,” says Dave Powers, Deckers CEO. Greater numbers of Hoka and Ugg brands drove average prices up, he said. [what do you mean? products from those brands?]

Hasbro Inc. (No. 554)

Hasbro reported revenue declined 10% in the third quarter ended Oct. 1. However, the toy retailer reported large gains in online gaming. Digital gaming revenue grew 40%, driven by Magic The Gathering and Dungeons and Dragons. Consumer products and entertainment revenue declined 18% and 42%, respectively.

Overstock.com Inc. (No. 49)

Overstock reported revenue declined 19% to $373 million in the third quarter ended Sept. 30. Results reflect the Overstock brand through July 31, and Bed Bath & Beyond beginning Aug. 1. Active customers declined 15% and net revenue per active customer declined 13%.

Skechers USA Inc. (No. 301)

Skechers reported sales grew 7.8% to $2.0 billion in the third quarter ended Sept. 30. Direct-to-consumer sales, which include ecommerce, grew 23.8%. Domestic ecommerce slowed as U.S. consumers returned to stores. Last year at this time, stores had a lack of inventory, pushing consumers online, the retailer said. This year, stores are better stocked, so consumers went there first. [attribution?]

Tractor Supply Co. (No. 99)

Tractor Supply report net sales grew 4.3% to $3.41 billion in the third quarter ended Sept. 30. Ecommerce sales grew in the high single digits, the retailer said without revealing more. Digital sales made up more than $1 billion in the last 12 months. The Buy Online, Deliver from Store program is also doing well, Tractor Supply said. 

Meanwhile, comparable sales declined 0.4%.

United Parcel Service Inc.

UPS reported profits and revenue declined in its fiscal third quarter ended Sept. 30, 2023. UPS consolidated revenue declined 12.8% from the year-ago period to $21.1 billion. Consolidated operating profit declined 48.7% over the same period to $1.3 billion.

Read more here.

So what does it mean?

• Retailers are still reporting soft consumer demand in the face of rising prices and turn toward experiences rather than physical goods.
• However, some apparel retailers are reporting bright spots. Deckers and Skechers both say they’re seeing strong interest from consumers.

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