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Beyond Q2 earnings show revenue down 5.7%, but key metrics show positive trends

Beth Duckett — Wed, 31 Jul 2024 20:08:04 +0000

Beyond Inc., the parent company of Overstock, Bed Bath & Beyond and Zulily, released its Q2 earnings results on July 29, reporting total net revenue of $398 million, marking a 5.7% decrease year-over-year.

Despite the drop, the online-only retailer reported some positive developments for the quarter ended June 30. Revenue was up 4% from the previous quarter. Beyond credited a 35% increase in active customers and an 18% rise in average order value from the same period a year ago. The net loss for the quarter was $42.6 million, an improvement from last year’s $73.5 million loss.

Beyond Inc. is No. 63 in Digital Commerce 360’s Top 1000 database of the largest North American online retailers. Bed Bath & Beyond formerly ranked No. 47 before its bankruptcy and Overstock.com previously ranked No. 50. Digital Commerce 360 projects Beyond’s total web sales in 2024 will reach $1.58 billion.

Beyond Inc. web sales by year

Beyond updates on turnaround effort in Q2 earnings report

“We have made significant progress in the past 150 days and will continue to execute on our plan to achieve growth and profitability,” Marcus Lemonis, Beyond’s executive chairman, said in a statement.

After acquiring the intellectual property of bankrupt Bed Bath & Beyond for $21.5 million in June 2023, Overstock.com rebranded as Bed Bath & Beyond. It then shut down the Overstock ecommerce website. By November, the company had rebranded again as Beyond Inc.

In March, Beyond backtracked on its decision and relaunched Overstock.com. It also acquired the intellectual property of ecommerce retailer Zulily for $4.5 million, with the new Zulily website slated to go live on Sept. 10.

Beyond expects profitability in 2025

In Beyond’s Q2 earnings call, Lemonis outlined plans to turn Bed Bath & Beyond into a $1 billion-plus ecommerce brand, emphasizing the need for “thoughtful and creative ways” to expand and leverage the brand’s IP for cash flow.

David Nielsen, president and CEO, highlighted that during the quarter, Bed Bath & Beyond experienced growth in core categories such as bedding, bath, and decor, as well as higher-ticket items like patio and outdoor furniture.

On the Overstock front, the brand’s online relaunch, supported by a new AI-driven marketing campaign, delivered strong performance in traditional categories like area rugs and furniture, Nielsen said. Its ecommerce site has expanded its product lineup and improved the user experience. Additionally, Overstock is set to finalize a deal with a major closeout and reverse logistics company, which could draw in more customers.

Looking ahead, Beyond plans to test a new technology, Vercel. Vercel provides an ecommerce solution that integrates with Shopify to speed up and personalize customer interactions. Over the next 18 months, the company plans to create a global loyalty program that leverages its database and partnerships with non-competing companies, with options to use and transfer reward points.

“Think about it like a Bonvoy at Marriott or a Star Alliance in the airlines,” Lemonis said.

In the coming months, he noted that Bed Bath & Beyond and Overstock typically see Q2 revenue outpace Q3 by about 12% to 14%, with Q3 serving as a transition to the busy Q4 season. The goal is to maintain or surpass this trend and improve gross margins every quarter, he said. Lemonis said he expects Beyond will achieve profitability sometime in 2025.

Other Q2 highlights reported by Beyond

Active customers numbered 6.2 million, up 35% year over year.
Orders delivered were 1.9 million, up 8% year over year.
Gross profit was $80 million or 20.1% of revenue. That’s a 530-basis-point decline year over year but a 70-basis-point improvement from the prior quarter.
Cash and equivalents totaled $186 million at quarter’s end.

The company is two-thirds of the way through a plan to cut fixed expenses by $45 million annually.

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Beyond Inc. revamps Overstock.com with fresh look, expanded inventory

Beth Duckett — Tue, 23 Jul 2024 20:01:48 +0000

Beyond Inc. has given Overstock.com a fresh new look and expanded its inventory in categories like liquidation and factory direct, according to a company news release. The online-only retailer had a soft launch in March and announced its “Grand Reopening” this month, adding millions of new items to its ecommerce site.

“As it relates to the site experience, it now reflects renewed branding and an improved overall look and feel, reflects improved navigation, and offers compelling promotions,” Alexis Callahan, Beyond’s vice president of investor and public relations, shared in an email to Digital Commerce 360.

In June 2023, Overstock acquired Bed Bath & Beyond’s intellectual property for $21.5 million and later relaunched the retailer’s ecommerce platform, shutting down its own website. However, during a February earnings call, Beyond executive chairman Marcus Lemonis acknowledged that closing Overstock.com was a “fatal mistake.” Under new leadership, Beyond fast-tracked the online retailer’s launch by six months, debuting the new site in March.

Beyond Inc. web sales by year

“We believe that our company can be an online leader, helping manufacturers, retailers, distributors, and lenders solve complex inventory problems in order to generate cash and improve their own profitability while creating a frequently visited, value-centric destination for consumers,” Lemonis said in a statement.

Rebuilding Overstock

Overstock.com now features a “significant” increase in core legacy categories, including indoor and outdoor furniture, apparel and footwear, décor and jewelry. Additionally, the platform expanded its offerings to include more closeouts, liquidation items, factory direct merchandise and reverse logistics products, according to the company.

Despite starting from scratch, Overstock’s soft launch exceeded expectations, Beyond president Dave Nielsen said in a May earnings call. Nielsen added that he expects continued growth in site visits as the brand improves customer engagement and expands its email and other acquisition efforts.

Lemonis noted in the call that while Overstock and Bed Bath & Beyond can thrive independently, they also complement each other. While Bed Bath & Beyond saw some success in traditional Overstock categories such as family room furniture and large area rugs, it didn’t meet Beyond’s key performance indicators for margin contribution and acquisition costs, he noted. The company believes Overstock can better return to its historical performance in these areas.

For the fiscal first quarter ending March 31, Beyond reported a modest rise in earnings, with an increase in active customers and orders. The company plans to release its fiscal second-quarter 2024 financial results on July 29.

Zulily website launch

Overstock.com’s full relaunch comes four months after Beyond acquired ecommerce retailer Zulily’s intellectual property for $4.5 million — including its website, domain names, trademarks, customer database, social media and software. Zulily, once known for its online flash sales, shut down in December after a period of financial instability. The company was previously owned by Qurate Retail, which ranks No. 18 in the Top 1000.

Beyond now expects to relaunch Zulily’s website toward the end of the third quarter of 2024.

“Our vision for Zulily is to focus on the segment of customers who loved Zulily before, working moms who enjoy shopping for themselves and their families,” Nielsen told investors in the May earnings call. “Shopping is fun for them, and they like to browse frequently.”

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How B2B startup Inhaven is reworking vacation rentals

Paul Demery — Fri, 19 Jul 2024 20:58:44 +0000

When Ashley Ching and her family of six started vacationing in privately owned rental properties instead of hotel chains, she noticed that vacation rentals often didn’t always measure up to their online marketing images.

“You see the pictures online, you like the location, but oftentimes we show up to terrible beds and missing pots and pans,” she says.

The challenge we have today in the vacation rental industry is 25,000 property management companies doing things in different ways.

Ashley Ching, founder and CEO

Inhaven

Ashley Ching, founder and CEO, Inhaven

Ching, a veteran of product sourcing, merchandising and ecommerce, figured there must be a better way to manage the growing U.S. vacation rental business, which, according to research firm AirDNA, totals approximately 1.5 million rental units in the U.S. market.

In September 2022, she founded and became CEO of Inhaven, an online B2B company she launched to raise the operational standards of the short-term vacation rental industry. Ching brought to Inhaven her experience in product sourcing, merchandising and managing brand standards at Tiffany & Co. and in ecommerce at The Home Depot housewares brand The Company Store.

Inhaven deployed a customized a B2B ecommerce site at Inhaven.com on the BigCommerce platform, which it designed to make it easier for property managers and their buyers in the complex vacation rental industry to find and purchase quality products ranging from beds, linens and pillows to bathroom supplies, kitchen utensils and tableware.

Inhaven also has deployed the Zoho CRM application to manage things such as customer application forms and Klaviyo for email marketing.

One of Inhaven’s primary goals is also to establish product standards among the thousands of vacation rental property management companies, who handle about 40% of the U.S. vacation rental market of 1.5 million units, Ching says.

“The challenge that we have in the vacation rental industry today is that there are 25,000 property management companies … 25,000 companies doing things in different ways.”

She asserts that, just as the hospitality industry set higher bed standards decades ago for economy as well luxury hotels, the vacation rental industry needs to follow suit.

Working with suppliers to furnish “Masterpieces”

Ching says Inhaven works with suppliers to provide products that meet quality standards in four levels, from basic (or “Canvas”) to high-end (or “Masterpiece”). It organizes them with images, pricing and other product details on Inhaven.com to simplify how buyers can choose the ones that fit their market and pricing strategy. Buyers for property managers can see which products meet their companies’ purchasing policies.

Inhaven.com has API connections to suppliers to update product details in real time and forward custom orders to vendors for drop-shipping. It works with about 200 brands, including Gibson Home and Martha Stewart.

Ching says Inhaven also uses the Flxpoint drop-ship platform, which “helps us maintain current inventory and supports our order workflows to and from our manufacturers.” It also uses Aftership to track order fulfillment once a manufacturer ships to a customer.

Inhaven is privately funded and doesn’t release revenue figures. But Ching notes that it has been growing steadily since launching in 2022 and now serves buyers for about 55,000 rental units.

“We’ve been doubling sales every quarter since then,” she says.

Going forward, Ching says she hopes to expand on Inhaven’s product standards strategy by working with online travel agencies and rental listing services to identify vacation properties that meet particular Inhaven standards.

“We’re focused on people looking for vacation homes managed by teams committed to these standards, and making it easy for them to find these homes,” she says, adding, “There’s nothing like that in the vacation rental industry.”

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

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Ecommerce earnings recap: What you missed from Aritzia, Helen of Troy and more

Brian Warmoth — Mon, 15 Jul 2024 19:03:34 +0000

New earnings results are out from retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America. The luxury apparel boutique Aritzia saw growth as it prepared for a website relaunch. Meanwhile, problems in the furniture and housewares and home goods spaces appeared front and center as two other retailers updated investors on their restructuring plans. Read more ecommerce earnings coverage here.

Parentheses indicate the merchant’s ranking in the Top 1000, unless otherwise stated.

This week’s ecommerce earnings takeaways

Aritzia Inc. reported a 7.8% rise in net sales for its first fiscal quarter of 2025.
Helen of Troy continues to deal with challenges, confronting a 12.2% decline in net sales in its fiscal first quarter.

Aritzia Inc. (No. 154)

Q1 2025 earnings: Aritzia Inc. recorded a year-over-year net sales increase of 7.8% to $498.6 million for its first fiscal quarter of 2025, which ended June 2. In addition, the luxury apparel retailer said its ecommerce net revenue increased 4.2% to $140.8 million for the same period, accounting for 28.2% of its net revenue.

The company has been investing in digital marketing and updated investors on its planned website relaunch for 2024.

“We expect the improved site to go live in the back half of this fiscal year,” Aritzia CEO Jennifer Wong told investors during the Q1 earnings call. “Other initiatives to drive digital include improving our online merchandising, optimizing our omni-channel capabilities, enhancing our international ecommerce site, and developing a mobile app.”

Bassett Furniture Industries Inc. (No. 409)

Q2 2024: Bassett Furniture Industries Inc. reported a 17.1% drop in net sales year over year to $83.4 million for its second fiscal quarter of 2024, which ended June 1. The decrease came as the company took an $8.5 million operating loss for the period and a restructuring plan that includes shuttering its Noa Home ecommerce business.

“Bassett Furniture has a long history of weathering economic cycles, such as the inflationary environment and slow housing market we’re experiencing in 2024 — factors that led to soft demand in our second quarter,” said Bassett Furniture CEO Robert H. Spilman in the retailer’s earnings announcement. “The business climate has remained difficult through the first six months of this year and may not improve in the near future.”

Helen of Troy Limited (No. 190)

Q1 2025 earnings: Helen of Troy Limited said that net sales declined 12.2% year over year to $416.8 million in its first fiscal quarter of 2025, which ended May 31. The housewares and home furnishings retailer also lowered its annual outlook as it proceeds with its Project Pegasus restructuring plan.

“Project Pegasus continues to provide us with fuel to fund our initiatives and organizational focus to capture opportunities and leverage our scale,” said Helen of Troy CEO Noel M. Geoffroy. “We also invested in new talent and next-level data, analytics and capabilities to improve our effectiveness and productivity across the enterprise.”

Other recent ecommerce earnings results

Alibaba Group Holding Limited

Q4 2024: Alibaba said it grew revenue 7% year over year in its fiscal fourth quarter ended March 31, 2024. Meanwhile, net income decreased 96% compared to the prior Q4.

Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by third-party GMV. Tmall ranks No. 2. Both operate in China.

Amazon.com Inc. (No. 1)

Q1 2024 earnings: Amazon net sales increased 13% to $143.3 billion in its fiscal first quarter. Meanwhile, its operating income more than tripled.

It ranks 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 third-party gross merchandise value (GMV).

Read more on Amazon’s earnings results here.

Conn’s Inc. (No. 568)

Q1 2024 earnings: Conn’s, Inc. announced on June 26 that it received a delinquency notification from Nasdaq regarding its failure to file Form 10-Q for the results from its first fiscal quarter of 2024, which ended April 30. Amid filing delays, the furniture retailer was seeking refinancing and considering bankruptcy, Bloomberg reported July 1.

The Home Depot Inc. (No. 4)

Q1 2024: Home Depot reported that sales declined 2.3% in its fiscal first quarter of 2024 ended April 28 due to challenges in the broader economy. B2B and Pro sales were equally impacted, while online sales grew.

Indigo Books & Music Inc. (No. 416)

No longer public: Toronto-based retail Indigo Books & Music Inc. went private, resulting in the company being delisted from the Toronto Stock Exchange on June 4. It did not report Q4 and fiscal 2024 results.

MillerKnoll Inc. (No. 211)

Q4 2024 earnings: MillerKnoll Inc. reported that net sales fell 7.1% year over year to $888.9 million in its fourth fiscal quarter of 2024, which ended June 1. The furniture company, known for its Herman Miller and Knoll brands, also reported that sales for its full fiscal 2024 were down 11.2% to $3.6 billion from a year earlier.

Results accounted for the closure of MillerKnoll’s Hay ecommerce channel in North America, as well as the shuttering of its Fully business.

“Turning to retail, we delivered organic order growth of 1% year over year despite the tough macroeconomic conditions our industry still faces,” MillerKnoll CEO Andi Owen said during the company’s earnings call. “We’re continuing to do the work to drive orders in the short term while optimizing our retail engine for significant long-term sales growth.”

Target Corp. (No. 5)

Q 1 2024: Target reported that total revenue declined 3.1%. That’s down to $24.5 billion in the first quarter of its fiscal 2024 ended May 4. However, online sales did increase slightly. Declines in discretionary categories were partially offset by continuing growth in the beauty category.

Read more on Target’s earnings results here.

Walmart Inc. (No. 2)

Q1 2025: Walmart grew U.S. online sales 22% for its fiscal 2025 first quarter ended April 30, 2024. Consolidated revenue grew 6.0% to $161.5 billion in Q1.

Ecommerce earnings calendar

Here’s when other ecommerce earnings are scheduled to report this quarter:

Carvana Co.: July 31
Adidas AG: July 31
LVMH: July
Amazon.com: Aug. 1

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Ecommerce earnings recap: What you missed from MillerKnoll, Conn’s and more

Brian Warmoth — Mon, 08 Jul 2024 17:40:24 +0000

New earnings results are out from retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America. Two retailers, which would have previously reported results from their past quarters, did not do so. Conn’s Inc. and Indigo Books & Music Inc. both had different stories behind those absent filings. Meanwhile, MillerKnoll Inc. announced decreases in net sales for its most recent fiscal quarter and fiscal year, illustrating a difficult environment right now for furniture retailers. Read more ecommerce earnings coverage here.

Parentheses indicate the merchant’s ranking in the Top 1000, unless otherwise stated.

This week’s ecommerce earnings takeaways

MillerKnoll Inc. reported an 11.2% drop in net sales for its 2024 fiscal year from fiscal 2023.
Conn’s Inc. did not report earnings as scheduled for its fiscal first quarter of 2024, as it is reportedly exploring bankruptcy.

Conn’s Inc. (No. 568)

Indigo Books & Music Inc. (No. 416)

MillerKnoll Inc. (No. 211)

Results accounted for the closure of MillerKnoll’s Hay ecommerce channel in North America, as well as the shuttering of its Fully business.

Other recent ecommerce earnings results

Alibaba Group Holding Limited

Q4 2024: Alibaba said it grew revenue 7% year over year in its fiscal fourth quarter ended March 31, 2024. Meanwhile, net income decreased 96% compared to the prior Q4.

Amazon.com Inc. (No. 1)

Q1 2024 earnings: Amazon net sales increased 13% to $143.3 billion in its fiscal first quarter. Meanwhile, its operating income more than tripled.

Read more on Amazon’s earnings results here.

H&M Group (No. 14 in Europe database)

Q2 2024 earnings: H&M Group said net sales were up 3% to $5.6 billion (59.6 billion Swedish crowns) in its second fiscal quarter of 2024, which ended May 31. The apparel retailer also noted that 30% of its sales were online during the first half of its current fiscal year.

“During the spring, we have successfully tested an updated online store that we are launching in our larger markets during the autumn,” H&M CEO Daniel Ervér said in the earnings announcement. “The new digital experience will give our customers more inspiration, clearer recommendations on how our products can be styled and which fit is right for them.”

The Home Depot Inc. (No. 4)

Levi & Strauss Inc. (No. 162)

Q2 2024 earnings: Levi Strauss & Co. reported an increase in net sales of 8% to $$1.4 billion for its second fiscal quarter of 2024, which ended May 26. The apparel retailer also said ecommerce revenue was up 19% year over year on a reported and constant-currency basis for the quarter.

Nike Inc. (No. 8)

Q4 2024 earnings: Nike Inc. net sales dropped 2% to $12.6 billion in its fourth fiscal quarter of 2024, which ended May 31. During the same period, Nike Digital sales fell 10% year over year.

Target Corp. (No. 5)

Read more on Target’s earnings results here.

Walmart Inc. (No. 2)

Q1 2025: Walmart grew U.S. online sales 22% for its fiscal 2025 first quarter ended April 30, 2024. Consolidated revenue grew 6.0% to $161.5 billion in Q1.

Ecommerce earnings calendar

Here’s when other ecommerce earnings are scheduled to report this quarter:

Helen of Troy Limited: July 9
Carvana Co.: July 17
Adidas AG: July 31
LVMH: July

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FTC votes to block Tempur Sealy’s $4 billion Mattress Firm acquisition

Brian Warmoth — Wed, 03 Jul 2024 23:14:19 +0000

Tempur Sealy’s Mattress Firm acquisition faces a major hurdle at the U.S. Federal Trade Commission, where all five commissioners voted to block the deal. The unanimous decision means the FTC will challenge the $4 billion mattress industry merger in court.

On June 2, following the FTC’s announcement, Tempur Sealy responded in a public statement. It objected to the decision as it prepares for the government’s lawsuit to proceed in the U.S. District Court for the Southern District of Texas.

Tempur Sealy ecommerce sales by year

Tempur Sealy is No. 156 in Digital Commerce 360’s Top 1000. The database includes a ranking of North America’s leading retailers by online sales. Mattress Firm is No. 274. Digital Commerce 360 sorts both companies in the Housewares & Home Furnishings category. Additionally, Digital Commerce 360 projects total ecommerce sales for Tempur Sealy in 2024 will be $5.52 billion.

Why the FTC is challenging Tempur Sealy’s Mattress Firm acquisition

“Through emails, presentations, and other deal documents, Tempur Sealy has made it abundantly clear that its acquisition of Mattress Firm is intended to kneecap competitors and dominate the market,” said Henry Liu, director of the FTC’s Bureau of Competition, in the FTC’s announcement. “This deal isn’t about creating efficiencies; it’s about crippling the competition, which would raise prices on an essential good and could lead to layoffs for good paying American manufacturing jobs in nearly a dozen states.”

In the FTC’s official complaint, regulators called Mattress Firm “the single most important retail channel for mattress brands.” They also claimed that it “can drive massive volumes of sales through its unmatched consumer reach. They added that “mattress brands jostle to access its floor space.” In that context, the commissioners believe that permitting Tempur Sealy to merge with Mattress Firm “would upend this competitive dynamic, giving Tempur Sealy enormous sway over the fate of its rivals.”

Moreover, the filing also cites “Tempur Sealy’s history of using exclusionary deals to block rivals.” In addition, the FTC asserted that “this acquisition would further cement its dominance and deprive independent brands of the opportunity to engage in free and fair competition.”

“Because this proposed acquisition may substantially lessen competition or tend to create a monopoly, it should be enjoined,” the complaint states.

Tempur Sealy’s defense of the merger

In defense of its proposed deal, Tempur Sealy disputed the FTC’s assessment.

“Tempur Sealy has been working constructively with the FTC to secure regulatory approval for this transaction and is disappointed that the FTC has initiated litigation,” a statement from the company read. “We appreciate their efforts to understand the industry and the proposed transaction, but ultimately believe the FTC’s perspective does not reflect all the relevant facts and law.”

Offering its own view of the bedding industry, it painted a very different picture of the merger’s implications.

“The bedding industry is highly competitive, offering consumers a diverse selection of products, brands, price points, and purchasing channels,” Tempur Sealy stated. “There are thousands of brick-and-mortar storefronts across the United States where consumers can purchase bedding products, only a small fraction of which are operated by Mattress Firm. Additionally, brick-and-mortar retailers and direct-to-consumer bedding brands sell millions of bedding products online each year.”

Ultimately the mattress brand stands by its intention to complete the deal. It concluded by expressing that confidence to shareholders in its release.

“We believe that a successful litigation process can be completed in the coming months, which would allow us to close the transaction in late 2024 or early 2025,” Tempur Sealy said.

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Beyond Inc. executive team changes as leadership roles are consolidated

Kevin Williams — Wed, 19 Jun 2024 22:01:06 +0000

The owner of Bed Bath & Beyond, Overstock.com and Zulily announced structural changes that will reshape the Beyond Inc. executive team. Ultimately, two pairs of leadership roles will merge, with another altered, in a larger effort to improve efficiency.

Among the key changes:

Elimination of co-chief executive roles
Expansion of executive chairman role
Elimination of dual chief merchant roles

Beyond Inc. is No. 63 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 before its bankruptcy. Overstock.com previously ranked No. 50.

Beyond Inc. executive team changes include departure of Chandra Holt

In addition to these changes, Chandra Holt, CEO, has exited the company after only four months in the role. Holt previously held positions at Walmart and Conn’s HomePlus. She was one of the highest-ranking female executives at Walmart before taking the top role at Conn’s.

Beyond’s restructuring, though, goes deeper than just a change in CEOs. The company’s marketing and merchandising leadership roles have been streamlined across all three brands, and Dave Nielsen has been appointed as president, overseeing marketing, merchandising, and supply chain functions for Beyond.

The restructuring at the top comes on the heels of a first quarter that saw light growth, reversing a trend of year-over-year decline. Beyond also relaunched the Overstock brand.

In addition, the past year saw Beyond acquire children’s apparel brand Zulily. Beyond spent $4.5 million for the rights to Zulily’s domain name, website, trademarks, customer database, social media accounts and software. The company plans to relaunch the Zulily website sometime in 2024. Like Overstock with its “crazy good deals,” Zulily was known for its “flash sales,” which came in the form of 72-hour deep discounted deals.

Recent quarterly earnings results at Beyond

In its first-quarter earnings report, Marcus Lemonis, the increasingly active executive chairman, pointed to margin improvement, SG&A reduction, efficiency, and alignment as key goals of the streamlining and restructuring. Lemonis said these actions will help “our organization to reflect what we believe will yield greater efficiencies and better results. I’m pleased with the sequential progress we are making and clearly see the path to our goal.”

Cheri Mason, president of Catalyst Leadership Management, which provides corporate consulting, said Beyond was on the right track with its moves.

“When you have co-chief executives, who is in charge of what?” Mason asked. Nevertheless, she said that Beyond’s structural changes were wise from a management standpoint.

“And expanding the role of the executive chairman makes sense,” she stated. “Employees today expect to see and engage with C-suite leaders.”

Mason added that Beyond’s moves may be as much about pleasing its 1,000-plus employees as it is for Beyond brands’ customers.

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Interview: Steve Dennis on the boldest decisions in retail

Brian Warmoth — Wed, 19 Jun 2024 21:50:53 +0000

What have been the boldest leadership decisions in retail in recent years? Digital Commerce 360 posed this question to author Steve Dennis in an interview about his new book, “Leaders Leap.”

Throughout his career, Dennis has worked with some of retail’s biggest names, tackling strategy changes and placing bets in the face of disruption — both at physical stores and online. In this second part of the discussion, he shared his perspective on how he thinks about risk, as well as advice on pitching big leaps in front of board rooms and other stakeholders.

Dennis explained what he has seen and offered his pick for the boldest decision made by a modern retailer.

Editor’s note: This interview has been edited for length and clarity. Click here to read the first part of our interview with Steve Dennis.

How to pitch a bold decision in retail

Digital Commerce 360: You open up the book with a compelling story about walking out of a board meeting at Sears. Deciding to advocate for a leap along the lines of your definition is already a big decision. Taking on the associated risk is another one. In your experience, what have you learned is necessary to pitch this type of vision before stakeholders, whether it’s boards, executives, or shareholders?

“Leaders Leap” by Steve Dennis | Image credit: Steve Dennis/Wonderwell, design by Adrian Morgan

Steve Dennis: In some ways, there’s sort of the metaphorical leap, which is about taking risk, right? There’s both the strategic leap, and then there’s the leaps we take as leaders in our actions day to day, week to week, month to month, year to year. I don’t want to give the sense that, generally speaking, a leap should be automatically this incredibly risky thing. I do think there’s a boldness of action that’s important in general. But, I don’t wanna give the sense that it’s about taking moon shots or this sort of thing.

The best thing is to not let yourself get into a position where you have to leap in the first place, right? That’s the ideal thing. And I think that’s much more a series of smaller risks taken over time. It’s the cumulative impact of that as opposed to a real strategic leap. But I think if you get to the point where there is more overall boldness of action that’s required, the main thing — in terms of getting support for it — is to help people understand the risk of not doing it. And that’s, I think, the hardest thing of all.

It’s a little bit what I try to get at with the “Safe is Risky” chapter. It’s very clear with the benefit of hindsight that many companies’ failures to act more boldly and move faster earlier on is what’s caused them to have multiple years of struggle.

So just going back to the Macy’s example, there are any number of significant things Macy’s could have done over the last 20 years that would have given them at least the promise of being a much more valuable company, of having not lost so much market share to all the different players they did. Now, they’re in a position where they don’t have the capital structure to invest very aggressively. They don’t have the confidence of Wall Street to support being much more aggressive. And for them to be a really successful company now, they’ve got to win back so much market share that the reason why I’m so negative on their ability to be able to do that is because it’s such a herculean task.

It would not have been all that hard for them to have gotten off the mall with other formats. And they’re doing so many things so late. Along the way, when it’s not a crisis moment, is the time to do it. And I think the best way is to try to quantify the risk. And then in terms of actions, it’s to place smaller bets. It’s to have tested a concept that would have fought with TJ Maxx and Ross.

Even their Blue Mercury – they lost so much market share in cosmetics to Ulta and Sephora. Blue Mercury is like one-fiftieth the size of them in the U.S. That’s nice. But you know, it’s not a real battle. It’s so incremental that it’s almost kind of laughable, but at the place they are now, they don’t have a choice. They’re not gonna acquire TJ Maxx, right? So the options now are very limited.

What are examples of the boldest decisions in retail?

DC360: You bring up crisis moments. In your mind, what have been — whether proven, unproven, successful, unsuccessful — the boldest decisions you’ve seen the past four or five years in retail?

SD: I’ll give you one that’s more of an overall business model one. And then a couple that are subsections of bold things. By far, the boldest retail one that I’ve been able to think of is what’s happened with RH — with Restoration Hardware. Actually, just as a quick aside, which shows that I do not always have the greatest capacity for discernment, I saw [Restoration Hardware CEO] Gary Friedman present at a conference where I was also a presenter about eight or nine years ago.

He was presenting the gallery concept before one had been opened. And I remember thinking he was crazy, like it was just such a bold step — and also one where you really couldn’t test it very well. I mean the test was to go build one of these things, which was not a cheap date.

They took the concept. They took a store that was basically a weird mix of things — sort of tchotchke kind of items and a little bit of home fashion — and then they made this leap to this palace of high-end home furnishing. And I don’t know all the work that went into doing that other than it was pretty clear that their current format was not a winning format, and they had gone to bankruptcy already.

That was a business that was not in great shape, but that was a very big step. But I know it was rooted in understanding the market, that there was really nobody doing something on a scale. But they had certain equity and also Gary and a couple of people that were on his team knew that business well enough. So it wasn’t quite a moon shot, but it was a big, big step. And then to continue rolling it out — and they’re rolling it out, even in the face of the home market being quite soft, as you know.

The other sort of set of things I would say — and I like picking a company that is a huge company — is what Walmart and Target have done in investing in their stores. Because both Walmart and Target saw 5-6 years ago now, I guess, at a time when this whole retail apocalypse narrative was pretty strong. But also in particular, this idea that Amazon was just unstoppable. And if you were a merchant like a Walmart or Target selling a lot of different stuff at comparatively low price points that you were going to get Amazon’d. And it isn’t as if Walmart and Target didn’t invest in their digital and ecommerce capabilities. They did. But to invest back into stores and see the role that stores can play, particularly when the narrative was pretty much 180 degrees in the opposite direction, it was pretty bold.

It’s also an example of where they didn’t just go nuts and do everything all at once. They did place some pretty big bets. Of course, they can because they’re big companies and they’ve got the cash positions and all that kind of stuff to invest. And full disclosure, Walmart’s been a client of mine, but they were doing the work. They understood what the economics were; they understood what consumers wanted; they push the edge a little bit because customers aren’t always the best at figuring out what they want till they see it.

When to advocate for a bold decision

DC360: What’s your advice to a person trying to understand when a bold idea is worth advocating for and pursuing? Is it fundamentally the risk of total disruption and irrelevance? What’s an internal test you would put that up against when you see the opportunity for a bold strategy or leap?

Steve Dennis, author of the book “Leaders Leap” | Image credit: Steve Dennis

SD: Number one, it kind of depends where the idea is. The right term is kind of maturity of the idea. For example, two years ago, let’s say if you were in certain technology spaces, you would have some awareness about generative AI, right? And you may not necessarily know how things are going to play out. We still don’t know how things are gonna play out.

But even before ChatGPT came out. Whatever it is now — 21 months ago or something. There are people that were aware that some of this stuff is going on. So you might then want to say, let’s figure out a way to have kind of a listening post or some very early exploratory scouting. And the business case for that would be: This could be very, very significant. Could develop very, very quickly. We need to get more knowledgeable about what is going on and see some of the possibilities, so we can then place the next series of bets on it. But that would be a case for something that’s really almost like R&D-ish.

Sears was very early on in click and collect or buy online, pick up in store. Neiman Marcus was quite early on that as well. And the business case was — for piloting it — that it was something customers wanted. It was something that could give us a competitive edge. And you could scope out a proof of concept and then ultimately a pilot that was manageable. But you had an idea that the size of the prize was big enough for it to be scaled to this level.

Amid all of these things, you’re thinking about the risk. You’re thinking about the resource. I always think about it as a series of options on this. If you spend this much money, you’re creating the option to do the next thing. So you have to be able to balance out, “What if I’m right? What if I’m wrong? What option value does it create for me?” It’s all in the context of — generally speaking — solving a customer problem or activating an opportunity. So you have to be able to scope it a little bit.

One thing, when I was at Neiman Marcus, which is such an old example, but social media was fairly new when I was first there — this is when MySpace was the thing and Second Life was gonna be a big thing. But in terms of a retail position, MySpace was a little bit about advertising and whether or not we should stand up any kind of commerce capabilities on the site. Second Life was more about having a store in what was the primitive metaverse, right? But it was very, very early there. It was getting a lot of buzz. And I remember pitching a couple of different proof of concept sort of ideas to our CEO.

We were asking for like $20,000 or something — we were a $4 billion company. It was trivial, but he wanted [to] know what’s the business case? And I remember saying, “There is no business case I like. This could be big. This is a probe. We will be smarter about this opportunity in four months’ time. And then we’ll see where we are.” But it’s like an insurance policy or something in a way, because you don’t want to fall behind.

As it turned out with Second Life, we never did anything, and it was good we never did anything. MySpace, we fiddled around with it, but again, that never turned out to be anything. But as Facebook started to emerge, we had a greater sense of what was going on.

There’s a lot of parameters in terms of the decision that goes that goes into it. And if you’re pitching an idea, you have to be able to give — in the earlier stage — more color commentary. In the later stage, you’ve got to bring more analysis to it.

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Ecommerce earnings recap: What you missed from Lovesac, Signet Jewelers and more

Brian Warmoth — Mon, 17 Jun 2024 17:05:51 +0000

New earnings results are out from retailers in Digital Commerce 360’s Top 1000 list of leading ecommerce retailers in North America. Their results highlighted challenges in the current environment for consumers. Academy Sports + Outdoors, The Lovesac Company, and Signet Jewelers were among the latest to share results. Here’s the ecommerce earnings summary you need to know for this quarter. Read more ecommerce earnings coverage here.

Parentheses indicate the merchant’s ranking in the Top 1000, unless otherwise stated.

This week’s ecommerce earnings takeaways

The Lovesac Company reported a 6.1% decrease year over year in net sales for the quarter, focusing on upcoming launches to boost results later in the year.
Signet Jewelers shared that net sales fell 9.4% year over year but indicated that a new loyalty program was being received well by customers.

Academy Sports + Outdoors (No. 144)

Q1 2024 earnings: Academy Sports + Outdoors net sales fell 1.4% to $1.36 billion in its first fiscal quarter of 2024 ended May 4. Steve Lawrence, the chief executive officer at Academy Sports + Outdoors said “customers remain under pressure in the current economic environment” but said the sporting goods retailers was “pleased that we drove a positive comp in our new stores and omnichannel business.”

The Lovesac Company (No. 389)

Q1 2025 earnings: Lovesac reported that net sales decreased 6.1% year over year to $132.6 million for its first fiscal quarter of 2025, which ended May 5. For the same period, online sales fell 9.0% to $36.6 million.

Lovesac CEO and founder Shawn Nelson called the quarter’s results “in line to slightly above the high end of our expectations” and characterized them as “continued outperformance compared to the industry.”

In the meantime, he expressed optimism about the furniture retailer’s omnichannel efforts and upcoming product launches.

“We believe through our omni-channel infinity flywheel, designed for life platform and advantaged supply chain, we are well positioned to continue to deliver results and capitalize on the tremendous opportunity still ahead,” Nelson said in a release statement. “With the recent launch of our PillowSac Accent Chair, we are continuing to expand our offering and see opportunity to further widen the aperture with exciting innovative launches yet to come.”

Signet Jewelers Ltd. (No. 55)

Q1 2025 earnings: Signet Jewelers net sales fell 9.4% to $157.2 billion in its first fiscal quarter of 2025 ended May 4. Signet CEO Virginia Drosos cited positive customer responses to the jewelry retailer’s “new product offerings and loyalty program,” saying the company expects “continued momentum in the second quarter, leading to a positive same-store sales inflection in the second half of Fiscal 25.”

Other recent ecommerce earnings results

Alibaba Group Holding Limited

Q4 2024: Alibaba said it grew revenue 7% year over year in its fiscal fourth quarter ended March 31, 2024. Meanwhile, net income decreased 96% compared to the prior Q4.

Amazon.com Inc. (No. 1)

Q1 2024 earnings: Amazon net sales increased 13% to $143.3 billion in its fiscal first quarter. Meanwhile, its operating income more than tripled.

Read more on Amazon’s earnings results here.

Bark, Inc. (No. 201)

Q4 2024 earnings: Bark reported a 3.6% year-over-year decrease in revenue to $121.5 million for its first fiscal quarter of 2024, which ended March 31. It also recorded $490.2 million in revenue for its 2023 fiscal year, which was down 8.4% from the previous year.

Bath & Body Works, Inc. (No. 62)

Q1 2024 earnings: Bath & Body Works said it saw a 0.9% year-over-year decrease in net sales, which totaled $1.4 billion during its first fiscal quarter of 2024 ended May 4.

Gina Boswell, CEO at Bath & Body Words, shared during its June 4 conference call that “there has been and continues to be significant work required to bring the company’s technology systems to where we need them to be for a leading omnichannel retail business of our size.” Looking ahead, she expects to be able to share more about these efforts later in 2024.

“We remain focused on investing in the foundational tools and systems need to support future growth, and have been engaging with world-class partners to do so,” Boswell said. “We continue to evolve the digital experience for our customers, and we look forward to sharing big wins from these efforts later in the year.”

Big Lots, Inc. (No. 237)

Q1 2024 earnings: Big Lots reported a 10.2% decrease in net sales year over year to $1.0 billion for its first fiscal quarter of 2024, which ended May 4. The company cited a “challenging consumer environment” as it announced a $205.0 million loss for the period.

The retailer is in the middle of a turnaround effort. It cited improved online promotions and experience as priorities as it looks to change course.

“We’re continuing to enhance the online experience and showcasing extreme bargain deals through the weekly ad, big bargains and big buyout sections, heavily featured on the site,” said Bruce Thorn, president and CEO at Big Lots, during the company’s June 6 earnings call. “We remain focused on influencing her home shopping journey through enabling customers to browse more products online and now offer a coming-soon preview, in-store inventory and have started the ability to preorder for core big-ticket items in furniture and seasonal at the end of Q2.”

Costco Wholesale Corp. (No. 6)

Q3 2024 earnings: Costco net sales grew 9.1% to $57.39 billion in its third fiscal quarter of 2024 ended May 12. During the same period, ecommerce sales grew 20.7%.

Read more on Costco ecommerce sales here.

GameStop Corp. (No. 35)

Q1 2024 earnings: GameStop said its net sales were down 28.7% year over year to $881.8 million for its first fiscal quarter of 2024 that ended May 4. The same period included a net loss of $32.3 million, which was smaller than its loss of $50.5 million a year earlier.

The company did not hold an earnings call after announcing earnings days earlier than previously scheduled. In addition, it shared that it would sell 75 million shares, following the sale of 45 million shares announced in May. That initial sale brought in about $933.4 million, Reuters reported. GameStop returned to the news spotlight ahead of its earnings release as meme-stock influencer and online streamer Keith Gill, who goes by the name “Roaring Kitty,” began sharing his recent trading activity publicly.

Lululemon Athletica, Inc. (No. 25)

Q1 2024 earnings: Lululemon Athletica announced net sales increased 10.4% to $2.2 billion in its first fiscal quarter ended April 28.

“In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world,” said Calvin McDonald, chief executive officer at Lululemon. “Guests responded well to our product innovations across categories, and we are pleased by the progress we are making to optimize our U.S. product assortment.”

During the company’s June 5 earnings call, Meghan Frank, its chief financial officer, noted that Lululemon ecommerce sales were up significantly, contributing to the quarter’s results.

“In our digital channel, revenue increased 8% and contributed $906 million of top line or 41% of total revenue,” Frank stated.

The Home Depot Inc. (No. 4)

Target Corp. (No. 5)

Read more on Target’s earnings results here.

Walmart Inc. (No. 2)

Q1 2025: Walmart grew U.S. online sales 22% for its fiscal 2025 first quarter ended April 30, 2024. Consolidated revenue grew 6.0% to $161.5 billion in Q1.

Ecommerce earnings calendar

Here’s when other ecommerce earnings are scheduled to report this quarter:

Levi Strauss & Co.: June 26
H&M: June 27
Nike: June 27

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American Freight shares 4 checkout strategies to improve conversion

Mary Meisenzahl — Tue, 28 May 2024 20:09:25 +0000

Most sales for furniture retailer American Freight happen in its stores. However, those sales are increasingly influenced by ecommerce. For example, consumers may look online before making a large purchase on an appliance or couch.

American Freight has taken some steps to improve that online purchasing experience and even push some customers to checkout online, chief marketing officer Lauri Joffe told Digital Commerce 360.

Each initiative she mentioned led to “meaningful basis point improvements” to total conversion, which encompasses customers who abandon carts online and make a purchase in stores.

American Freight ranks No. 232 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales. Digital Commerce 360 categorizes it as a hardware and home improvement retailer.

These are the strategies American Freight employs to improve checkout.

1. Single-page layout

Keeping the whole checkout process on a single page is “critical,” Joffe said. She called this initiative the most important for conversion.

The delivery address, billing information and payment information are all on one page. That’s a change from about a year ago, when each piece was a separate page.

“Just by default, what we sell is a pretty long process,” Joffe explained. “We ask a lot of questions, and we have to have your delivery information.”

Nevertheless, those details help to ensure good outcomes.

“You have to schedule your delivery,” she said. “We want to reduce time and make it as simple as we can, and most importantly, make sure that the customer can see what they’ve completed and what they have left.”

American Freight prioritizes making a customer’s progress on that checkout page visible.

“From an accessibility perspective, it’s very clear when you’ve completed a step, and what steps are remaining — and it’s all visible in one page,” Joffe stated.

2. Guest checkout

Retailers often want customers to make accounts and share data, but guest checkouts are often consumers’ preferences, Joffe noted.

“I’m definitely a lot more obsessed about user experience than I am about collecting data,” she said. Consumers choose guest checkout for a number of reasons, including anonymity and not wanting to share data with a retailer. It’s preferable to let the customer check out the way they want to, even if it means the retailer misses out on some data they could use to encourage future purchases.

About 60% of purchases with the furniture retailer are made through guest checkout, Joffe said.

3. Giving customers a breadth of payment options

American Freight has a dropdown menu of payment types it accepts on the checkout page, including PayPal, financing, credit cards, Google Pay and Apple Pay. American Freight presents the information in a way that makes it easy for a customer to see all the payment options at once and expand any of them to get more information, Joffe said.

“We were super early adopters of Apple Pay and Google Pay because they’re one-click solutions on mobile,” she emphasized. “We’re seeing a huge uptick in those as a percentage of our ecommerce sales.”

4. Abandoned cart emails and texts

American Freight takes a careful approach to contacting customers who abandon their carts, Joffe stated. According to her, many of them do end up converting in stores.

In addition to standard abandoned cart emails, the retailer also sends texts.

“The message is personalized, and it tells you that you’d love something before asking to answer any questions for you,” Joffe said.

“And then if they did have a question, what they left in the cart, they text back and there’s literally a conversation between the agent and the customer on what was happening in that cart,” she continued.

The interaction is more of a conversation than an email, which has produced good results, Joffe said. She recommends the practice to other retailers.

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