Retailers shift their ad spending from TV, radio and print ads to digital ads.
The web now accounts for 7.4% of Williams-Sonoma’s revenue, up from 3.4% a year ago. An estimated 40% to 50% of Internet sales are incremental to its direct-to-consumer business.
Revenue from Williams-Sonoma’s four e-commerce web sites for the fiscal year ended in February rose 139% to $153.9 million from $64.4 million the year before, the company stated in its annual report filed this week. Web revenue now accounts for 7.4% of companywide revenue, more than twice the 3.4% it accounted for the year earlier. For the year, Williams-Sonoma reported net earnings of $75.1 million on net revenues of $2.1 billion.
Williams-Sonoma estimated that some 40% to 50% of its non-bridal registry e-commerce sales are incremental to its direct-to-consumer channels. The balance are from mail order customers who would otherwise have placed a phone order. The company attributes the growth in its direct-to-consumer web and catalog sales to growth in its Pottery Barn, Pottery Barn Kids and Williams-Sonoma brands.
Despite the stellar growth of web sales--by contrast, Williams Sonoma’s overall revenue grew 14% while catalog sales declined 4%--stores remain the primary driver of revenues, generating about 60% of total revenues on average in each of the past three years. The company stated in its annual report it expects to increase its store base by 56 across its three major brands this year. In addition to being sales channels on their own right, the web and catalog play significant roles in the company’s overall marketing strategy, complementing the retail store business by building brand awareness and acting as effective advertising vehicles, the company states in the report. In addition, “Mail order and the Internet are a cost effective means of test-marketing acceptance of new products,” the company stated.