To incentivize signups, Etsy Insider will offer a variety of perks. They range from free shipping and special offers to donation boosts.

Etsy is No. 20 in the Global Online Marketplaces Database. The database is Digital Commerce 360’s ranking of the 100 largest such marketplaces by third-party gross merchandise value (GMV). Etsy’s musical instrument marketplace Reverb is No. 45 and used-clothing marketplace Depop is No. 54. Digital Commerce 360 projects that Etsy’s total GMV will reach $753.7 billion in 2024.

Etsy total GMV by year

What is the Etsy Insider paid membership program?

“In mid-September, we’ll launch a closed-beta version of Etsy Insider to select buyers in the United States,” wrote Simona Shakin, vice president of product and retention marketing at Etsy, in a company blog post on July 31.

Etsy did not specify how much membership fees for the program would be, but Shakin listed the benefits that members would receive as follows:

• Free U.S. domestic shipping on millions of items
• A birthday bonus
• Limited edition annual gift, designed by an Etsy seller
• First access to special discounts and select merchandise
• Double impact with Donate the Change

Donate the Change is an Etsy program that gives shoppers the option to round up order totals to donate to its Uplift Fund for promoting entrepreneurship.

“While Etsy Insider’s benefits deliver great value for buyers, the program comes at no cost to the Etsy seller community,” Shakin explained. “Benefits, including the free shipping, will be funded by Etsy and through the membership fee.”

Why Etsy is launching a paid membership program

Etsy CEO Josh Silverman said when addressing the company’s fiscal first-quarter earnings in 2024 that it was confronting a “challenging environment for consumer discretionary product.” That environment was reflected in a 3.5% year-over-year decline in gross merchandise sales during the quarter, which ended March 31. In addition, Etsy faces fresh competition from rivals such as Michaels, which launched its own MakerPlace marketplace in 2023.

“We’re confident Etsy Insider will make it easier and more joyful than ever for buyers to seamlessly discover pieces they will love from real people they’re proud to support,” Shakin said in her blog post.

Still, as a pure marketplace where all goods are sold by third parties — unlike hybrid marketplaces such as Amazon.com and Walmart Marketplace — Etsy lacks centralized fulfillment, making Etsy Insider an atypical program example among online marketplaces broadly, according to James Risley, research data manager and senior analyst at Digital Commerce 360.

27.8% of Top 1000 retailers have a free loyalty program, while 5.9% have a paid membership, Digital Commerce 360 analysis shows. The Top 1000 Database is Digital Commerce 360’s ranking of North America’s largest online retailers by annual web sales.

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Government data for the monthly sales from distributors and wholesalers trails the calendar by two months, meaning the U.S. Department of Commerce only now just released data for May.

In May, the sales of merchant wholesalers — except manufacturers’ sales branches and offices — totaled $666.7 billion. That’s up 0.4% from $654.3 billion in May 2023. And seasonally adjusted U.S. wholesale sales rose 0.7% in the first five months of 2024 compared to the same period in 2023, after declining 1.6% for 2023 as a whole, according to the U.S. Census Bureau.

But for distributors and digital commerce, the story thus far this year is a tale of uneven growth. While it may be a fat city in one vertical, times are leaner in others.

Wholesalers and distributors’ ecommerce sales so far this year

The biggest public distribution companies have yet to break out second-quarter earnings, but some such as W. W. Grainger started the year with respectable but hardly stellar results. Grainger is a prominent distributor of maintenance, repair and operations (MRO) products that businesses need to operate their facilities.

For the first quarter ended Jan. 30, Grainger reported moderate first-quarter growth in total and web-only sales, but it expects stronger growth ahead, president and CEO D.G. Macpherson said on an earnings call.

“Amid a slow but steady demand environment,” Grainger produced “solid results,” he said.

Grainger’s web-only Endless Assortment business — which Zoro.com and Japan-based MonotaRo.com comprise — posted a 3.7% sales increase to $751 million. By comparison, Grainger’s High-Touch Solutions segment grew 3.4% to $3.405 billion. The High-Touch Solutions segment includes the full-service sales through Grainger.com and the company’s sales team.

Most big public distributors in 2024 are following a common theme of softer sales due to weaker performance in manufacturing productivity and slower overall economic activity.

But even with softer sales, the emphasis is on shifting more, and not less, sales activity to digital commerce. A case in point is Fastenal Co.

For its fiscal second quarter ended June 30, 2024, the fastener distributor grew total sales to $1.916 billion. That’s a 1.8% increase from $1.883 billion in the second quarter of 2023. Net income was $590.4 million compared with $593.1 million in Q3 of the previous year.

As in other recent quarters, digital sales made up two-thirds of all Fastenal revenue.

“On digital footprint, 59.4%, that’s taking all of our ecommerce, all of our FMI, it was 59.4% in the second quarter. Actually, in June, it hit 60%,” CEO Daniel Florness told analysts. “We had expected that we’d get to about 66% this year. We now think it’s about 63%, and that’s not because we’re not acquiring customers. It’s because customers are spending less, and it shows up in our numbers.”

For the second quarter, using 59.4% and 55.3% of digital as a percentage of all sales, Digital Commerce 360 estimates Fastenal digital sales grew year over year by 1.8% to $1.138 billion from $1.041 billion.

How are smaller distributors doing in 2024?

Like Grainger and Fastenal, smaller distributors also are seeing only moderate to steady increases in year-to-date ecommerce sales.

Bay Supply, a distributor of fasteners, tools and hardware, is on track to hit its forecasted growth of 10% in 2024. But a downturn could lower that, says chief operating officer Michael Eichinger.

“We are at a pivotal point in the coming eight weeks based on our historic trends, and it appears we are on track to hit that 10%,” he said. “However, the sluggish performance has also thrown forecasting a wrench. I do believe our worst case is 5%-8% growth for 2024.”

For ecommerce, the outlook is also mixed.

“Digital sales are up single digits over 2023 (5%). However, this is attributed to reduced average order volume,” Eichinger says. “Order volume is up 15%.”

At MC Tools and Safety, a small distributor of industrial equipment based in Blaine, Minn., ecommerce remains an exceedingly small part of the company’s operation, says president Erika Scherman. The company does $2.5 million in annual sales, and only about $20,000 online.

MC Tools has had an ecommerce site for a decade. But after experiencing fraud, it pulled back from selling online and made its website informational only. When COVID hit, it went back to selling online. Within the last three months, it launched a new Shopify site. So far, results have been “minimal.” Scherman says.

One problem is that its enterprise resource planning (ERP) system doesn’t communicate with the Shopify site, so a lot of work, such as on pricing, must be managed manually. As a result, MC Tools is trying to turn that to their advantage by hiring someone to compare their individual prices with online prices of competitors. That may be an opportunity to raise prices on certain items, Scherman says.

“Our next adventure is to look at our pricing compared to other people out there, to make sure our online prices protect our margin,” she says.

Scherman says a small company like hers doesn’t have the resources or time to invest in ecommerce the way larger competitors do. And ecommerce offers less return because she focuses on serving customers in Minnesota and western Wisconsin. “I don’t want to sell shovels to California,” Scherman says. “I can’t ship them well.”

Overall, she’s not sure where the website fits into the company’s business model that was built on personal relationships with customers, midsized contractors as well as operators of warehouses, offering them great service and stocking the products they need.

Speaking of ecommerce, she said, “I was telling my marketing gal, we could sell a million dollars there, but I’m not sure we’re well set up for that. I don’t know how to change how we do business to support that.”

Digital Commerce 360 contributing editor Don Davis provided reporting for this story.

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“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. 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

“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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While the search for a new CEO begins, executive chair Richard Leeds has been appointed as interim CEO. The transition will be effective as of Aug. 9, says Global Industrial.

New Global Industrial CEO

Leeds joined Global Industrial in 1982 and served as its chair and CEO from 1995 until becoming executive chair in 2016. He also previously served as president of the Company’s Industrial Products Group until 2011.

Global Industrial didn’t provide a specific reason for Litwin’s departure, but he is leaving on good terms.

“Mr. Litwin’s resignation is not the result of any disagreement with the Company on any matter relating to the company’s operations, policies, or practices,” according to a filing with the U.S. Securities and Exchange Commission.

Litwin was appointed CEO of the company in 2019 and has served as director since 2017. He was previously the CEO of Adorama, Inc., a retailer of professional camera, audio, and video equipment. He has also served in executive roles overseeing the ecommerce businesses and digital strategy for Sears Holdings, Inc., Office Depot, and Newark Electronics Inc.

In 2023, Litwin received total compensation of $2.775 million, including a base salary of $983,700, according to Global Industrial’s proxy filing. As executive chair, Leeds was paid a salary of $950,000 and received total compensation of $980,000, according to the filing.

Global Industrial Co. started its 2024 fiscal year on a positive note, growing net sales year over year.

Global Industrial revenue was $323.4 million for the first quarter ended March 31. That’s an 18.1% increase over $237.8 million in Q1 2023. More than 60% of sales take place online.

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In the meantime, the company is counting on B2B ecommerce sales from professional contractors to help weather the drought in falling revenue.

“The DIY consumer: This consumer remains very cautious, specifically when you think about larger discretionary purchases,” Lowe’s CEO Marvin Ellison told attendees this week at Oppenheimer’s 24th Annual Consumer Growth and E-commerce Conference. “The segment and the sentiment for the DIY [do-it-yourself] consumer remains a bit weak, influenced by things like persistent inflation.”

Lowe’s ranks No. 11 in the Top 1000, Digital Commerce 360’s database of North America’s online retailers by web sales. The retailer is in the Hardware & Home Improvement category.

Lowe’s online sales

Lowe’s Cos. Inc. reported that online sales grew about 1% in the first quarter of fiscal 2024 ended May 3. Meanwhile, Lowe’s total sales declined 4.0% to $21.4 billion, and comparable sales fell 4.1%.

That was a significant improvement from Q4, when total sales declined 17% and comparable sales dropped 6.2%.

The retailer also said B2B and online sales growth partially offset declines from DIY customers, especially on bigger projects.

“Our focus in that segment is the small to medium-sized pro customer, and this customer remains resilient,” Ellison told attendees, according to a transcript from SeekingAlpha.com. “And our most recent pro surveys, which we try to do every quarter, show that their backlog of work and projects are very consistent with last year, which is good news for us.”

Lowe’s says it’s taking several major steps to accelerate total and online sales from contractors.

Two of its main priorities:

1. Personalizing a contractor’s user experience.
2. Making product recommendations and repeat buying easier both online and in stores.

“We’re starting to pair that [the retailer’s professional contractor experience] along with our CRM (customer relationship management) platforms within our stores. We’re able to know who our pros are, what they’re shopping and, more importantly, what they are not shopping, and be able to pair the digital capabilities that we have with the localized in-store specialists that are serving our pro customers,” Ellison said.

In the past year, Lowe’s has spent considerable effort researching how contractors do business online with the retailer.

It found two key points:

1. Nearly one in three pros (32%) ranked retailer-specific mobile apps and built-in tools in their top three innovations with the greatest potential to improve their job.
2. 61% of pros expect retailers to help them shop quickly so they can get back to the job.

To make it easier for professional contractors, Lowe’s has made recent additions to its mobile commerce suite of tools. That includes updating its Lowes Pro app with features such as:

• Online quoting, so pros can build and update online order quotes within minutes. Pros can also complete purchases online at the quoted rate, with pricing guaranteed for seven days.
• A volume savings program, which allows certain levels of Pro Rewards members to save on eligible orders of $1,500 or more.
• Buy It Again, which lets pros reorder frequently purchased items via the Buy It Again prompt. Products can be sorted by frequency, recency and price of purchase.
• Order tracking, which visualizes purchases and tracks deliveries from a centralized page for pro customers.

B2B sales make up about 25% of all Lowe’s sales, which dropped 11% to $86.78 billion in 2023 from $97.06 billion in 2022.

Going forward, generating more sales from its B2B customers will remain a top priority for Lowe’s, chief financial officer Brandon Sink told attendees.

“We continue to be laser-focused on the small to medium pro, the $250 billion addressable market that’s out there, highly fragmented, and those pros continue to tell us that they’re underserved,” he said.

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He shared the projections in an interview with the South China Morning Post in Hong Kong published June 6. Growth in the B2B marketplace has “slowed after a sevenfold increase in GMV over the previous five years,” he also stated.

“It’s quite hard to double GMV every single year due to an increasingly large base,” he said. “The core issue is about the business model, as we need to make breakthroughs and transformations.”

At the same time, Alibaba is projecting an increase in GMV. In addition, Alibaba continues to roll out new marketplace features.

The latest digital tool for the marketplace is Alibaba Guaranteed, whereby buyers will be able to procure products at fixed prices with shipping fees included and shipped within 72 hours of order placement.

Additional Alibaba features include:

• Buyers can quickly get money back for order-related issues and make free local returns for defects.
• Orders procured through Alibaba Guaranteed will be fulfilled by Alibaba.com, meaning the Alibaba platform manages finance, such as escrow and payment terms and after-sales services.

“Alibaba Guaranteed marks an exciting new chapter for SMEs and global sourcing as it will help to redefine the fulfillment standard of B2B cross-border trade,” Zhang said. “Global sourcing can be a complex process with many moving parts, but Alibaba Guaranteed can help SMEs navigate it with greater ease.”

Alibaba.com says it now serves more than 48 million small and medium-sized enterprises (SMEs) as buyers, with more than 200,000 suppliers on its platform worldwide.

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Her appointment was effective as of June 3.

Bark is No. 201 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Digital Commerce 360 categorizes Bark in the Specialty category.

Bark’s new head of DTC

“On behalf of the entire team, I am thrilled to welcome Meghan Knoll back to Bark,” said Meeker in a released statement. “During her seven-year tenure with us, Meghan made significant contributions across the organization, including leading our Super Chewer product from inception to becoming our second-largest revenue generator.”

Bark’s direct-to-consumer segment was responsible for 89.0% of its $490.2 million in revenue during its last fiscal year, according to results released June 3.

“Meghan will rejoin us to drive accelerated growth of our DTC channel,” Meeker said. “Alongside Michael Black and Michael Parness, two recent leadership hires, I believe we have an exceptional commercial team poised to drive profitable, long-term revenue growth.”

Knoll’s background and roles at Bark

“I am excited to rejoin Matt and the incredible team at Bark,” Knoll said. “The team has made impressive progress within the direct-to-consumer channel in the past 18 months.”

During those 18 months, Knoll served as CEO at the subscription-based cat food company Cat Person, which had backing from Harry’s Labs. Previously, she held multiple roles at Bark over seven years. Those included general manager for Bark’s Super Chewer product and eventually senior vice president of DTC. Prior to Bark, she also held leadership positions at Nickelodeon and Viacom.

Speaking highly of Bark’s work in her absence, she noted that she will be focused on customer experience and growth looking forward.

“I am confident that we are primed to capitalize on that work and drive exceptional new customer experiences and sustainable long-term channel growth.”

Bark’s Q4 2024 earnings

Bark reported both its full-year and Q4 2024 earnings on June 3. The company recorded $121.5 million in revenue for the period, down 3.6% from a year earlier. It cited “fewer BarkBox and Super Chewer subscriptions” compared to the fourth quarter in 2023 as a reason.

Meanwhile, DTC revenue was also down 5.7% to $109.3 million from a year earlier, with the company citing the same issues.

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“It’s an endless pit,” said Ahmed, who is also the CEO of textile company Artistic Denim Mills and founder of denim brand DL1961.

Orme shows users a feed of videos based on their interests, much like on TikTok and Instagram Reels. What’s different, though, is that each video displays at least one product users can buy, and they can do so before scrolling to another video.

Whereas influencers often get paid one-time fees, “there’s no ROI for us,” Ahmed said. “All the digital managers [were telling us,] ‘You have to invest!’ And we said enough is enough. We have to create a system which is an ecosystem for influencers, brands and the shoppers so that the CMOs and the owners can see where the money is going.”

He told Digital Commerce 360 that’s what led him to start Orme with co-founder Robert D’Loren. The social commerce marketplace went live in April 2024. D’Loren, who is also chairman and CEO of Xcel Brands Inc., described the marketplace as the intersection of shopping, entertainment and social media.

D’Loren said Orme intends to compete with TikTok Shop, for example, by taking a different approach to how users make money on the two marketplaces.

“Their models are based on ad dollars. … We’re not out to sell ad dollars,” D’Loren said. “We’re out to get 100 million people sharing and earning. It democratizes all of this.”

‘Flip the model’ by which influencers get paid

D’Loren cited data from consulting firm McKinsey & Co. saying that worldwide conversion rates from influencers are “at best 3%,” and conversion rates in affiliate marketing are less than 1%.

“Therein lies the problem,” D’Loren told Digital Commerce 360. “When you have such low conversion rates, and since the change in the privacy rules where you really can’t follow your customer around the internet anymore, digital marketing doesn’t quite work either. So customer acquisition cost has become prohibitively expensive. And there’s no solution for it. The only right solution would be to flip the model. Transition it from a pay-to-play model to a pay-for-performance model.”

As opposed to one-time fees, influencers who facilitate product sales on Orme can receive different percentages of those sales. If a user or influencer makes a video and shares it, then someone purchases directly from that video, the user receives 6% of the sale.

“Someone can pick up [that] content and share it on Instagram or any social network or platform,” D’Loren said. That user gets paid 2%. The person who shared it gets 6%. “That’s how this whole thing works.”

In other words, if 50 people share a creator’s video, and those 50 people each make at least one sale, the creator makes 2% of each product sold through her content, plus 6% on any sales made directly from her own video. The 50 users who shared the video then get 6% of each purchase made from their shared video.

Orme has launched with seven merchants and more than 1,000 users who downloaded the app in its first week without using any email campaigns, D’Loren said in a recent Xcel Brands earnings call with investors. Xcel Brands announced $2.3 million in net revenue for its fiscal fourth quarter ended Dec. 31, 2023. That’s a 44% decrease from its Q4 2022, down $1.8 million.

Xcel launched Orme as “a joint venture with a technology company in which Xcel owns a 30% interest in this new video and social commerce marketplace,” D’Loren told investors on the call.

How does Orme work?

Similar to TikTok and Instagram Reels, Orme users can swipe up within the app to view videos. Also, as on TikTok, there is a vertical list of buttons on the right side that allows users to click on a brand or user’s profile page. That page shows other videos the users or brands have made, as well as items they sell, saved recordings of shows they’ve produced, any live shows they’re hosting, and any upcoming events they have planned.

An Orme video from Longaberger, which manufactures and distributes houseware items, displays one of the brand’s wooden baskets.

The video above displays a basket from retail brand Longaberger. Xcel owns Longaberger, as well as other brands including Halston, Judith Ripka and more. Among the other options in the buttons on a video are a button to save a video, “like” it, add its products to one’s own store on Orme, and a “shop” button. A distinguishing factor between Orme and TikTok (and its in-app TikTok Shop) is that the video portion and ecommerce shop portion are not separated.

Clicking the “shop” button on the Longaberger video shows what products a user can purchase directly from that video page.

Users can then check out directly from the video page without being taken to a different part of the app or being redirected to an ecommerce website.

The checkout page on Orme slides up to temporarily cover the video a user is watching. Once a user completes her purchase, she can continue to scroll where she left off.

What happens to an order after checkout?

When a consumer completes a purchase on Orme, the app’s APIs (application programming interfaces) connect directly with the merchant, inserting the order into their system and triggering the merchant’s customer relationship management (CRM) system. In this case, that means an order placed on Orme for a Longaberger basket will appear in Longaberger’s ecommerce system. Longaberger is then responsible for sales tax, fulfillment and post-purchase communication.

“For all practical purposes, it’s their customer,” Ahmed said.

He added that these merchants don’t want to part with their customers.

And everything has to happen in real time, Ahmed said. That means Orme needs API connectivity to automatically update product information and changes to pricing, inventory, descriptions and imagery.

“And we did that without navigating the customer away from the video,” D’Loren said. “Most platforms take the customer away and they put them on the ecom site. That doesn’t happen on Orme. But the whole back end and the customer journey stays exactly the way it is with the vendor today. We didn’t want to disrupt that customer journey experience in any way, shape or form.”

How do users get paid on Orme?

Marketplaces sometimes hold a merchant’s money for up to 60 days, Ahmed said. TikTok says it initiates payout to sellers one to eight days after an order delivery date. It adds that “the exact number of days is determined based on your shipping performance.”

Orme pays its merchants their share of a sale immediately, splitting the payment at checkout, Ahmed said. Merchants like Longaberger get 75% of the total sale price, and 25% goes to Orme. From that 25%, the marketplace pays:

• Influencers it credits with getting the consumer to convert (the above-mentioned 2% and 6% referral rates).
• Credit card processing fees (Orme currently uses Stripe for this).
• The shoppers, who can choose to keep their referral earnings in their Orme account and use them like a cash-back system.

“That’s 10% they would have spent anyway,” D’Loren said. “So what are they really paying? 15%.”

TikTok announced it will take increase its fees to 8% this year on most items, from 2% plus $0.30 per sale, The Information first reported.

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The “Old Crocs. New Life” program will be available at all Crocs retail and outlet locations in the country, excluding Hawaii and Puerto Rico. Stores will have designated collection boxes for used Crocs in any condition, the retailer said. Anyone in the continental U.S. can also request a free mail kit to facilitate returning their shoes. Additionally, all participants in the program will receive a 10% discount to be used in stores or online.

“We are expanding our ‘Old Crocs. New Life’ program, taking learnings from last year’s pilot and working to create an even bigger impact together with our fans,” said Deanna Bratter, vice president, global head of sustainability at Crocs. “The growth of this program is an exciting continuation of our efforts to address the environmental and social challenges faced by the footwear industry and ultimately make a difference by keeping shoes on feet and out of landfills.”

Crocs is No. 97 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers. The company appears in the Apparel & Accessories category.

Crocs shoe collection program

The retailer first tested out the program in an October 2023 pilot. “Encouraging results” led to the recent expansion, Crocs said.

Donated Crocs will be sorted based on the state they’re in. Gently used pairs will go to Soles4Souls, an international nonprofit. The organization focuses on providing shoes and clothing to people experiencing economic hardship, according to its website. Soles4Souls also has relationships with DSW (No. 72 in the Top 1000), Zappos (owned by Amazon, No. 1 in the Top 1000), Bombas (No. 337) and other retailers.

Heavily worn pairs of Crocs will be repurposed. That could include being upcycled into a new pair of shoes, according to the retailer. 

“Crocs will continue to leverage partnerships and product innovation to strive toward giving each received pair its next best use,” it said in a statement.

Crocs’ finances

The retailer reported that revenue grew 6% to $939 million in its fiscal first quarter ended March 31. Direct-to-consumer sales, including ecommerce, grew 11.8%, while wholesale grew 3.2%. 

Revenue for the Crocs brand grew $14.6% to $744 million in Q1. Meanwhile, the company’s Heydude brand sales declined 17.2% to $195 million. As a result, Crocs updated its forecast for the rest of the year, anticipating the Heydude brand revenue will decline 8% to 10% in fiscal 2024.

“As we continue to prioritize brand health in the North American market for HEYDUDE, and considering what we are seeing quarter-to-date, we are reducing our revenue expectations for the brand for the balance of the year,” Crocs CEO Andrew Rees said in a statement. “We are confident in the long-term opportunity for the HEYDUDE brand and are excited to welcome a new HEYDUDE President to fully unlock its future potential.”

The retailer appointed former chief marketing manager Terence Reilly to become president of the Heydude brand at the end of April. He returned to Crocs after a period as president of the Stanley Brand, the retailer behind the viral Stanley cups. He brings 25 years of global marketing and leadership experience to Crocs, the retailer said.

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For the quarter ended March 31, gross merchandise volume grew 13% to $319.4 million. That was up from $282.7 million in the second fiscal quarter of 2023.

Year-over-year revenue growth was $91.5 million. Meanwhile, net income was $5.7 million, compared with $4.2 million in the second quarter of 2023.

Liquidity Services Q2 results

“Growth and profitability in our RSCG and CAG segments were impacted during the quarter by an inferior product mix and delays in selected international sales events at quarter end, respectively,” said Liquidity Services CEO Bill Angrick. “However, we expect an improvement in our RSCG product mix as we enter the seasonally high fiscal second quarter, and most of the delayed projects in our CAG segment are expected to close during the fiscal second quarter resulting in the resumption of year-over-year growth.”

Other second-quarter metrics include:

• Buyers: Registered buyers, defined as the aggregate number of persons or entities who have registered on one of the Liquidity Services marketplaces, totaled approximately 5.2 million. That represented a 5% increase over the approximately 5.0 million registered buyers at the end of the prior year.
• Auction Participants: Specifically, Liquidity Services defines participants as registered buyers who have bid in an auction during the quarter. That metric reached approximately 848,000, a 14% increase from the approximately 744,000 auction participants in Q1 2023.
• Completed Transactions: Transactions, defined as the number of auctions in a given period, were approximately 239,000, up 12% from 214,000 completed transactions in the prior year.

Outlook for the third quarter

“We remain the trusted provider of choice for commercial and government clients in the circular economy and continue to deliver outstanding value for our customers,” Angrick says. “We look to capitalize on our strong buyer base and business pipeline across our business to deliver improved growth and profitability in our fiscal second quarter.”

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