The company’s financial gains reversed recent quarterly declines, as Bodor noted that Protolabs did well in Q3 despite continued softness in manufacturing markets.

Robert Bodor, president and CEO, Proto Labs Inc.

“We continue to accelerate innovation for customers with the fastest and most reliable lead times in the industry,” Bodor said on a Q3 earnings call. “The broader economic environment is still uncertain. Manufacturing conditions in the U.S. and Europe remain soft and have not consistently improved throughout 2023.”

Protolabs revenue in Q3

Despite that economic downturn, Protolabs “grew in the quarter, especially in our digital manufacturing network business,” he said.

Bodor added that Protolabs is gaining market share with larger companies and expanding in new markets.

“Recently, a luxury high-end automotive manufacturer selected Protolabs to assist with its first foray into the electric vehicle market,” he said, without naming the manufacturer.

Bodor added that Protolabs worked with vehicle manufacturer’s design firm, Hutchinson, to make prototypes for and electric vehicle battery pack cooling system.

“We rapidly manufactured injection molded parts, which meant stringent project timelines and quality utilizing our speed, reliability and quality,” he said.

Bodor noted that Protolabs’ traditional business over most of its 24-year history has been in manufacturing prototypes of parts that customers use in designing and testing new products. But it is now seeing growing demand for parts that customers use in the production of final products.

Protolabs “is becoming a one-stop shop for custom prototypes and low-volume production,” he said.

Protolabs’ services include:

• Injection molding
• 3D printing
• Sheet metal
• CNC machining

CNC machining is a manufacturing process in which pre-programmed applications dictate the movement of factory tools and machinery. The process enables three-dimensional cutting tasks to be accomplished in a single set of prompts.

Protolabs reported for the third quarter ended June 30:

• 23,800 product developers served by its digital manufacturing.
• Gross profit of $59.28 million, for a gross margin of 45.4%. That’s up from $53.6 million and 44% a year earlier.
• $19.5 million in earnings before interest, tax, depreciation and amortization (EBITDA) or 14.9% of revenue. That’s up from $11.4 million and 9.3%.
• Net income of $7.95 million, up from $3.95 million.

For the nine months ended June 30:

• Revenue of $166.18 million, nearly unchanged from $166.85 million a year earlier.
• Net income of $10.32 million, down from $11.60 million.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Protolabs update.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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So as a prominent tire supplier to Canada’s automobile manufacturers, dealers, and independent tire retailers, Montreal-based distributor Groupe Touchette Inc. has relaunched its ecommerce platform to meet the demands of multiple B2B channels and individual consumers.

Denis Gallagher, vice president of IT, Groupe Touchette Inc.

The company’s new ecommerce platform, running on SAP Commerce technology from SAP SE, hosts several transactional commerce sites, including TireLink.ca for sales to motor vehicle manufacturers and their dealers; DTTire.ca for independent tire dealers and installers; and Tireland.ca, where consumers can purchase tires and arrange for professional installation.

Groupe Touchette says 94% of customer orders are now placed through the ecommerce site, up from less than 80% on its prior site.

Operating online with more agility

“The tire distribution industry has seen significant shifts in recent years, including the emergence of private label tires, and advanced use of data, analytics and technology logistics,” says Denis Gallagher, vice president of IT. “Since the establishment of the new omnichannel B2B platform, we have been able to respond to these demands with more agility.”

As a result, he adds, “we are seeing our customer loyalty, competitive advantage, and market share all increasing, coupled with a reduction in calls and costs to our call centers.”

Groupe Touchette also operates more than 50 distribution centers throughout Canada, putting it “in a position to offer delivery services in 90 of the 100 largest cities in the country in less than three hours,” Gallagher says.

The distributor’s overall sales and fulfillment operations, however, require reliable connections to exchange customer and product data between its ecommerce platform and backend business operations software.

Integrating ecommerce with ERP

Groupe Touchette worked with Toronto-based systems integrator Pivotree to deploy SAP Commerce and integrate it with the distributor’s SAP S/4HANA enterprise resource planning software, providing for accurate online presentation of such content as customer contract pricing, order details and status, customer activity data, and promotions.

Among other improvements, the ecommerce platform also features enhanced site search and navigation, resulting in more repeat customers and fewer calls to customer service, Gallagher says.

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23andMe Inc. (No. 309)

Revenue was down 8% year over year for the fiscal fourth quarter, but it grew 10% to $272 million for the full fiscal year ended March 31, 2023. The biotechnology company grew its customer base 11% in the fiscal year to 14 million genotype users.

It also grew its subscription membership, 23andMe+, CEO Anne Wojcicki told investors. Subscription membership grew 51% year over year to 640,000 members. More customers are also opting in to the subscriber program with their initial purchase, though she did not give a specific figure.

Advance Auto Parts Inc. (No. 101)

Advance Auto Parts reported a “double-digit sales increase” in ecommerce for its first quarter. Over the same period, net sales grew 1.3% year over year and comparable store sales decreased 0.4%. The auto parts retailer also reported that DIY omnichannel sales grew, without sharing specifics.

Bark (No. 173)

Revenue was down 2% year over year in the fiscal fourth quarter to $126 million, coming out ahead of Bark’s guidance. Direct-to-consumer revenue also decreased 1.5% to $116 million. For the full fiscal year, direct-to-consumer revenue increased 5.3% over fiscal 2022.

Bark broke down DTC revenue by product category. Toys, beds, and apparel generated $307 million in revenue in fiscal 2023. Consumables including treats and food generated $165 million.

Best Buy Co. Inc. (No. 7)

Domestic online revenue declined 12.1% for the first quarter to $2.69 billion, Best Buy said. Online sales made up 30.5% of total domestic revenue in the quarter, down slightly from 30.9% last year. About 40% of those sales were buy online, pick up in store (BOPIS) orders, the retailer said.

Online sales have doubled since 2020, CEO Corie Barry told investors.

Big Lots (No. 251)

Net sales were down 18.3% year over year to $1.1 billion the first quarter, Big Lots reported.

“Our lower-income consumer was hurt by inflation, lower tax refunds, and higher interest rates, and their confidence has been shaken by banking failures,” CEO Bruce Thorn said in a statement.

The discount retailer declined to share specific ecommerce data.

“We continue to improve the [online] customer journey through a more curated experience, better site navigation, and eliminating friction,” Thorn told investors.

Deckers Brands (No. 167)

Direct-to-consumer net sales grew 19.5% in the fiscal fourth quarter to $343.1 million, up from $287.2 million the previous year. Much of the growth came from a few specific brands. Sneaker company Hoka net sales, including in stores and ecommerce, grew 40.3% year over year to $397.7 million. Teva sales also grew 14.6%, while Ugg sales were down 16.1%.

“Fiscal year 2023 was an exceptional year for the Deckers organization, delivering 15% revenue growth and increasing earnings per share nearly 20%,” CEO Dave Powers said in a statement. “We continue to deliver record results, including the HOKA brand adding more than half a billion dollars of top-line revenue.

Lululemon Athletica Inc. (No. 27)

Lululemon reported ecommerce sales grew 18% in Q1 over the year-ago period. Online sales contributed $835 million in revenue in the quarter, 42% of total revenue, the retailer said.

Traffic grew 30% year over year both in stores and online, chief financial officer Meghan Frank told investors. 

Macy’s Inc. (No. 17)

Online sales were down 8% year over year in the first quarter. Ecommerce sales made up 33% of total sales in the quarter, CEO Jeff Gennette told investors. Digital penetration remained flat from 2022, down from a high of 40% during the pandemic. 

Nordstrom Inc. (No. 21)

Ecommerce sales were down 17.4% in Q1 due to eliminating digital order fulfillment at Nordstrom Rack stores and closing the Trunk Club in 2022, the retailer said.

Nordstrom reported that digital sales made up 36% of net sales in the quarter, down from 39% of net sales in the year-ago period. Digital sales were approximately $1.1 billion in the quarter.

Sportsman’s Warehouse (No. 361)

Net sales decreased 13.5% year over year to $267.6 million in the quarter. Sportsman’s Warehouse didn’t provide specific information on ecommerce sales. CEO Jeff White told investors that online sales are a “continually growing highlight” of the business even as overall sales were down.

Ulta Beauty (No. 48)

Ulta comparable sales were up 9.3% year over year in the first fiscal quarter. The beauty retailer didn’t specify what percentage of sales were through ecommerce.

Ulta also finished the two-year rollout of its updated website and app in the quarter. 

Victoria’s Secret & Co. (No. 53)

Net sales decreased 5% year over year $1.4 billion in the fiscal second quarter, Victoria’s Secret reported. Web traffic for the apparel retailer remained flat from 2022, though conversion rates and average unit retail both declined over the period. 

Casual sleep and beauty were the best performing categories both online and in stores, CEO Martin Waters told investors. Sales in China showed “outsized growth in digital,” he said.

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Enzo Rabante, head of global digital solutions, Dayco

Just ask Enzo Rabante, head of global digital solutions for Dayco, an engine parts manufacturer for automotive, truck, construction, agriculture and industrial vehicles and equipment. Dayco sells primarily to small and mid-size distributors in a hurry to find what they need, so it decided to develop the “Dayco digital garage” as a B2B ecommerce site at DaycoAftermarket.com that its customers would find helpful for purchasing such Dayco products as engine belts, front-end drive system components, hoses and tools.

“Our customers expect a personalized journey that generates value at each touchpoint,” he says.

The starting point for designing and building the Dayco digital garage was getting a deep understanding of buyer expectations. Those expectations lay the foundation for delivering a customer experience that triggers initial sales, as well as repeat sales, and generates customer loyalty, Rabante says.

To Dayco, the reason for making the buyer experience central to its plans for developing the new ecommerce site was simple: If buyers consider the digital experience inferior to the in-store experience, odds are they won’t come back to digital.

Getting multiple departments involved

The internal digital team, and any third-party digital consulting firms brought in on the project, play a critical role in developing the blueprint for an ecommerce site, Rabante says. But he asserts that one department that also needs to be involved is marketing, because it delivers a brand’s message to the target audience to develop leads and post-sale follow-up and service opportunities.

“Marketing is important to the digital experience, pre-sale and post-sale,” says Rabante, who spoke about the Dayco digital garage at the Sitecore Symposium last fall. “Buyers expect a journey that generates value at each touchpoint and enhances the brand in every [line of] business, without barriers.”

Dayco’s primary customers are small and medium distributors who expect to find what they want quickly on the site and not feel their time spent online is being wasted. “That’s why marketing and customer profiling need to be clean and push promotions and products that are relevant to the customer,” Rabante says. “Our customers expect a personalized journey that generates value at each touchpoint, enhancing the brand in every business, without barriers.”

Web content for end customers

While Dayco determined that it needed to build buyer experiences unique to its target audience of distributors, the manufacturer also realized its content needed to address the needs of the end-users of its products,  mechanics and do-it-yourselfers. That way it would reassure its distributors that they were purchasing the right product mix for their customers. “We sell to the distributors, who sell to the garages [and parts retailers], who make the products available to the mechanics or do-it-yourselfers,” Rabante says.

This strategy also means providing easy online access to the product catalog, product pages and related documents. “Our mission is to turn buyers into loyal customers by providing the pre- and post-sale digital services buyers expect,” he adds.

Dayco’s largest markets are in Europe, the Middle East and Africa, or EMEA, which generates 48% of its revenue, and North America, which generates 35%. Asia-Pacific and South America account for 9% and 8% of revenue, respectively. In its fiscal year 2020, which ended February 2020, Dayco posted revenue of $1 billion, the latest figures the privately held company was willing to share. The manufacturer has 18 manufacturing sites, 16 distribution centers and six technical centers.

Setting key performance indicators

Having settled on the parameters of the what the customer experience should be, Dayco laid down a set of key performance indicators for the new site. Those KPIs include increasing the conversion rate for marketing campaigns, measuring how well push promotions perform and customer loyalty.

When it came to selecting the digital experience platform to power its new site, Dayco chose Sitecore because it offers a fully integrated platform, a headless ecommerce solution, and takes an API- first approach, Rabante says. Dayco also liked that the Sitecore platform was cloud-based and the knowledge the Sitecore team brought to the development process. To build its new B2B ecommerce site, Dayco is using the Sitecore OrderCloud headless commerce platform integrated with the Sitecore Experience Manager content management application and Sitecore Send email management system.

“An API-first approach is very important to us as it makes changing the front-end very easy,” Rabante says. As an API-first, headless design, the Sitecore platform was built with application programming interfaces to integrate the independent customer-facing front end interface with the ecommerce engine.

Integrating Microsoft technology

He says Dayco also brought in digital agency Cluster Reply to consult on the project, largely because of its expertise for integration of Microsoft applications, including Azure, Microsoft’s cloud computing platform for application management.

With its digital team still putting the final touches on its planned digital garage, Rabante expects the new website will provide a valuable experience for buyers that helps win sales from competing sites.

In summarizing Dayco’s approach to building its digital garage, Rabante quotes Bruno Vallilo, Dayco’s president of global aftermarkets: “We change the way we think, keeping customers at the center of our digital transformation.”

Peter Lucas is a Highland Park, Illinois-based freelance journalist covering business and technology.   

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The company, based in Dallas, has expanded its online inventory to include 1 million parts and made other ecommerce site updates. FleetPride has deployed a new search engine updated with artificial intelligence applications to help customers perform faster and more relevant searches and doubled the number of part cross references to 10 million to help customers find the exact part they need, the company says.

FleetPride ecommerce features

Darren Taylor, senior vice president, marketing and digital, FleetPride Inc.

“Our customers told us they need more available products and more delivery options to keep their trucks on the road,” says Darren Taylor, senior vice president of marketing and digital. “They expect to find the right product fast and easily order it with confidence, and we listened to them.”

FleetPride also is adding more new features. They include a “Complete The Job” tool, which helps customers find all the parts they need in one order based on technician repair data, real-time stock availability through a network of more than 300 locations, cash-back rebates on their online purchases and free standard shipping on select parcel orders of more than $200.

The company distributes heavy duty truck and trailer replacement parts. It offers products such as brakes and wheel ends, drive trains, suspensions, air conditioning, starters, alternators, and engine components.

Taylor will speak on a panel about B2B customer experience at the EnvisionB2B 2023 Conference & Exhibition in June in Chicago.

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Josh Brazil, vice president of supply chain insights at project44, a supply chain visibility platform, says last-mile delivery service has dramatically improved since the worst of the pandemic — when 20% or more packages arrived later than promised. But persistent labor shortages have kept delays above pre-pandemic levels during 2022. That’s likely to continue for the rest of the holiday period, Brazil says.

“Labor is an issue across all supply chains,” Brazil says. During the pandemic, numerous workers in all parts of the supply chain left the industry. And those departures — and a generally tight labor market — have put stress on last-mile delivery, he says.

The “last mile” refers to the final leg of a product’s journey. That’s when it moves from a transportation hub to its destination, generally via a common carrier like FedEx Corp., United Parcel Service Inc. (UPS), or the United States Postal Service (USPS).

A good sign for shippers is that average weekly parcel transit times during the second half of 2022 has improved since peaking at 3.01 days at the end of June, according to project44 data. For the week ending Sept. 28, transit time was down to 2.07 days.

Retailer and consumer expectations for parcel delivery

During the 2021 holiday season, consumers found themselves frustrated by out-of-stock inventory. This year, many retailers have too much stock. But merchants expect consumers to take nothing for granted.

According to a Digital Commerce 360 survey of 70 retailers, conducted in July-September 2022, half said they expected shoppers to buy earlier this holiday season to avoid finding inventory out of stock. And 36% of retailers said they expected consumers to demand faster shipping than in years past.

A survey of 1,088 consumers conducted by Digital Commerce 360 and Bizrate Insights in September 2022 confirms that consumers remain worried about inventory levels. 57% of those surveyed said they planned to check product availability before placing an order for delivery.

Delivery speed and in-stock are important

The Digital Commerce 360/Bizrate survey also found that 32% of consumers  ranked speed of delivery among the most important factors when choosing an online retailer. More than a quarter (27%) selected “product in stock and ready to ship” as an important factor.

Having orders arrive late is always a problem, says Calvin Kim, CEO of Coverland, an online retailer of vehicle covers and other automotive, motorcycle and boat accessories. But, when delivery is slow everywhere, customers can be forgiving.

“Having my customers experience delays is indeed a major issue,” Kim says. “However, I don’t find the delay during the holiday season to be a major issue since the reason behind this delay is something justifiable and expected, and all retailers are suffering.”

“Of course we are expecting delays in shipping during the holidays; it is the same case every year, as it is a busy season,” Kim adds. “However, we expect the delay to be within the reasonable period of time and we make sure that our customers are informed about the maximum delay that could occur so we don’t shake their trust in us.”

But this year, consumers are confident and don’t expect retailers to suffer from slow shipping by parcel carriers, according to a project44 survey of 1,603 consumers in the United States, United Kingdom, France and Germany.

The project44 survey, conducted in August 2022, found 71% of consumers expect holiday gifts to arrive on time in 2022. Also, 64% of consumers polled said they still wouldn’t pay higher prices to guarantee their purchases arrive in time for the holidays.

Upgrading and diversifying parcel delivery

During the 2021 holiday season and the period before Valentine’s Day in 2022, Moriarty’s Gem Art received “a ton” of customer complaints about late parcel deliveries, said Jeff Moriarty, marketing manager of the family-run jewelry merchant. The retailer, which had always used USPS as its primary domestic carrier, decided to switch to offering free USPS express delivery on all orders, which solved the problem.

Moriarty said the switch raised the price of shipping orders to about $30 per parcel from about $10. But, because Moriarty Gem Art has an average order value of about $2,500, it was easy to cover the extra shipping costs by slightly raising prices.

“The good news is that it hasn’t affected sales, and customers are thrilled to get their packages so quickly. Almost every shipment arrives in one to two days (guaranteed) instead of five to seven. We don’t expect to see any issues this holiday season,” Moriarty said.

The retailer offers FedEx service to domestic customers who want to pay extra for it, Moriarty said. For non-U.S. orders, it uses FedEx exclusively.

Moriarty’s Gem Art sells online at MoreGems.com and operates a physical retail store in Crown Point, Indiana.

But not all retailers can upgrade their shipping services and simply work that extra cost into product prices. On average, companies that ship parcels — including e-retailers — are working with more last-mile carriers than in the past.

According to project44, the average shipper worked with four carriers in September 2019. That number grew to 5.7 in September 2022, a 42.5% increase. From August to September 2022 alone, carrier diversity grew 9.6%, up from an average of 5.2.

“This could be a sign that retailers are bulking up their carrier networks proactively in preparation for peak season starting in November,” according to a project44 report.

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To achieve its new ecommerce strategy, Ford is borrowing a page from the playbook retail chain Target Corp. developed and uses to keep pace with Amazon.com.

Amazon ranks No. 1 in Digital Commerce 360’s database of Top 1000 e-retailers. It ranks e-retailers based on web sales. Target Corp. ranks No. 5.

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“It’s kind of like what happened between Amazon and Target. Target could have gone away, but they didn’t,” Farley told attendees at the Alliance Bernstein 2022 38th Annual Strategic Decisions Conference on June 1. “They bolted on an ecommerce platform, and then they use their physical store to add groceries and make returns much easier than Amazon. They use their expertise as a physical retailer to their advantage, but they modernize the ecommerce piece, so it would be easy to do business with them.”

Online sales strategy

Now, Ford will use the same online strategy to change how its network of dealers sell vehicles, Farley says.

“It’s exactly what we have to do on the retail side,” he said. “We got to go to non-negotiated price. We got to go to 100% online. The vehicle, there is no inventory, goes directly to the customer, 100% remote pickup and delivery.”

Ford and Farley did not reveal many details on the vehicle maker’s ecommerce plans, but ecommerce is a big part of Ford’s enterprise-wide digital transformation — and how they do business as a car company.

“We spend $600 or $700 on a vehicle to promote it, and we spend nothing post-warranty on the customer experience. And the problem is on a parts business, which historically has been very profitable, we only get maybe 10% or 20% of the customers come back to us,” Farley said. “It would be much better if we tried to develop an ecosystem where 100% came back, and we gave them experiences, and that is our marketing. You buy Ford Model E, and after a year, we are going to give you a complete detail of the vehicle, check all your software’s up to date. You get a complete birthday for your vehicle.”

Ford first looked at selling direct online to consumers in 2000 but met stiff resistance from its dealer network. Instead, Ford launched Ford Direct as an organization to use the web to drive foot traffic to dealerships. But now Ford is looking to change the way its dealers sell to consumers with a digital-first approach.

“The vehicle, there is no inventory, goes directly to the customer. 100% remote pickup and delivery,” Farley said. “But then we have this opportunity to use our physical presence to outperform them (the competition).”

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