Walmart and Target huge e-commerce gains are a blaring siren to brick-and-mortar retail

It’s no shock that amid the ongoing pandemic, retailers are seeing e-commerce sales surge. But even so, the numbers are eye-popping. The stay-at-home era has served as a tide to lift many e-commerce boats: in the first quarter Target saw its online sales spike 141%, and said that in April […]

It’s no shock that amid the ongoing pandemic, retailers are seeing e-commerce sales surge. But even so, the numbers are eye-popping.

Walmart reported blowout Q2 earnings on Tuesday, led by a 97% surge in online sales. That comes after Walmart’s online sales rose 74% in Q1. The chain, which was criticized years ago for being too slow to beef up its online presence, has been on an e-commerce hot streak since before the pandemic and is now a formidable online sales foe to Amazon, which saw its net sales rise 40% in Q2.” data-reactid=”17″>Walmart reported blowout Q2 earnings on Tuesday, led by a 97% surge in online sales. That comes after Walmart’s online sales rose 74% in Q1. The chain, which was criticized years ago for being too slow to beef up its online presence, has been on an e-commerce hot streak since before the pandemic and is now a formidable online sales foe to Amazon, which saw its net sales rise 40% in Q2.

Target saw its online sales spike 141%, and said that in April alone, online sales were up an astonishing 282%. Target reports second-quarter earnings on Wednesday and is likely to disclose similar massive e-commerce gains.” data-reactid=”22″>The stay-at-home era has served as a tide to lift many e-commerce boats: in the first quarter Target saw its online sales spike 141%, and said that in April alone, online sales were up an astonishing 282%. Target reports second-quarter earnings on Wednesday and is likely to disclose similar massive e-commerce gains.

ETSY), which due to its size is rarely compared to giants like Amazon (AMZN), Walmart (WMT), and Target (TGT), saw its Q2 sales (which are entirely online) rise 137%, driven by mask purchasing, which comprised 14% of all sales in the quarter.” data-reactid=”23″>Even Etsy (ETSY), which due to its size is rarely compared to giants like Amazon (AMZN), Walmart (WMT), and Target (TGT), saw its Q2 sales (which are entirely online) rise 137%, driven by mask purchasing, which comprised 14% of all sales in the quarter.

e-commerce grew 44.5% in Q2, the biggest quarterly growth in more than 20 years.” data-reactid=”24″>Overall, U.S. e-commerce grew 44.5% in Q2, the biggest quarterly growth in more than 20 years.

bankruptcy filings galore, including Lord & Taylor, Men’s Wearhouse parent Tailored Brands, Ann Taylor and Lane Bryant parent Ascena Retail, Lucky Brand Jeans, and The Paper Store, all in the past two months.” data-reactid=”25″>That e-commerce surge stands in brutally sharp contrast to the headlines in brick-and-mortar: bankruptcy filings galore, including Lord & Taylor, Men’s Wearhouse parent Tailored Brands, Ann Taylor and Lane Bryant parent Ascena Retail, Lucky Brand Jeans, and The Paper Store, all in the past two months.

People wearing face coverings wait in line to shop at Walmart, July 22, 2020 in Burbank, California. (Photo by Robyn Beck / AFP)

None of this is very surprising at first glance.

retail sales rose 1.2% in July, which was less than predicted but marked the third straight month that spending rose, a good sign of economic recovery. Consumers are shopping again, but doing it mostly online.” data-reactid=”47″>As Americans continue to work from home and socially distance, they’re shopping online, and also beginning to make more than just essential purchases online. U.S. retail sales rose 1.2% in July, which was less than predicted but marked the third straight month that spending rose, a good sign of economic recovery. Consumers are shopping again, but doing it mostly online.

So, this massive e-commerce surge can be largely chalked up to the pandemic.

The scarier question for traditional brick-and-mortar retailer is: What if it isn’t?

e-commerce makes up just 16.1% of total U.S. retail spending. But the direction of the trend is obvious. One year ago, e-commerce was 10.8% of U.S. retail. Just a few years ago, retail chains were encouraged to have an online presence as an addition to their physical presence; then over time, the buzzword became an “omni-channel” approach; soon, if it isn’t the case already, a chain’s e-commerce platform is going to be more important than its physical footprint.” data-reactid=”50″>According to Department of Commerce statistics, e-commerce makes up just 16.1% of total U.S. retail spending. But the direction of the trend is obvious. One year ago, e-commerce was 10.8% of U.S. retail. Just a few years ago, retail chains were encouraged to have an online presence as an addition to their physical presence; then over time, the buzzword became an “omni-channel” approach; soon, if it isn’t the case already, a chain’s e-commerce platform is going to be more important than its physical footprint.

A strong e-commerce platform is becoming table stakes for all retailers, period. Peter Tchir, head of macro strategy at Academy Securities, noted on Yahoo Finance Live on Tuesday: “Walmart would be insane not to look at Amazon’s valuation right now and commit billions and billions to some sort of better online experience.”

TJX) and Ross Stores (ROST), both of which have been dinged for their weak e-commerce platforms, and both of which also report Q2 earnings this week.” data-reactid=”52″>That’s bad news for stores like TJ Maxx (TJX) and Ross Stores (ROST), both of which have been dinged for their weak e-commerce platforms, and both of which also report Q2 earnings this week.

A general view of Lord & Taylor in Mizner Park, one of the nation’s oldest department store chains, has started liquidating 19 of its 38 stores. The retailer filed for Chapter 11 bankruptcy protection Sunday, joining the growing list of retailers who say they were impacted by temporary store closures amid the coronavirus pandemic, as Florida’s Covid-19 surgeon August 6, 2020 in Boca Raton, Florida. Credit: mpi04/MediaPunch /IPX

often with their stimulus checks) like electronics, outdoor furniture, and sporting goods.” data-reactid=”73″>Walmart’s report also sheds light on what items Americans are buying online: everything, including food. Walmart says its online grocery pickup ordering “continued to experience all-time high sales volumes” in Q2. Walmart’s profit, which some analysts expected to suffer due to shoppers buying lower-cost items, also beat expectations. Walmart saw fewer total transactions (down 14%), but bigger totals at checkout (average ticket price rose 27%), thanks to shoppers buying pricier items (often with their stimulus checks) like electronics, outdoor furniture, and sporting goods.

Source Article

Next Post

S&P 500 rises to a record close as stocks regain pandemic-related declines

Tue Aug 18 , 2020
The S&P 500 and Nasdaq each closed at record highs Tuesday, with tech shares leading the broader market to regain its pandemic-related losses. Walmart and Home Depot shares turned negative despite the companies reporting estimates-topping second-quarter results, after executive commentary around slowing sales growth in the current quarter drove investor […]