The new payment option from Samsung gives retailers another way to connect with customers.
Even though many big chain retailers are weeks away from breaking out Q4 and full-year numbers, several chains are hinting that it’s going to be the web–and not stores–that provided relief from the worst holiday shopping season in decades.
While comparable store sales took a nose dive for many big chain retailers in the fourth quarter, it’s a different story with their Internet channel.
Even though many big chains are weeks away from breaking out their fourth quarter and full-year numbers, several chains already are hinting that it’s the web–and not stores–that provided relief from the worst holiday shopping season in decades.
The list of big chains whose December store sales fell while e-commerce revenue grew or held steady includes Best Buy Co., No. 12 in the Internet Retailer Top 500 Guide, Wal-Mart Stores Inc. (No. 14), J.C. Penney Co Inc. (No. 15) and Macy`s Inc. (No. 28). In its December comparable store sales report, Best Buy reported a 34% increase in online sales for the period ended Jan. 3 compared to the same time a year ago. At the same time, comparable U.S. store sales declined 6.8% and total revenue fell by 6.5%.
In a similar report, Macy`s, which operates Macys.com and Bloomingdales.com, says its online sales increased 26% for the November-December period, while same-store sales declined 7.5%. Macy’s includes its online web sales in same-store sales. Web sales were exceptionally brisk in December, increasing 39.1% over December 2007. For the first 48 weeks of its fiscal year, Macy’s says online sales are up 30.1% over the same period last year, while same-store sales were down 4.6%. Macy’s’ fiscal year ends Jan. 31.
Other chain retailers, including J.C. Penney and Wal-Mart, also hinted at strong or consistent holiday web sales while store sales lagged or increased only moderately. For the five week period ended Jan. 3, J.C. Penney reported comparable store sales and total sales dropped by 7.3% and 6.8%, respectively. But the retailer also acknowledged that sales for JCP.com increased by an unspecified amount. At Wal-Mart, the world’s biggest chain retailer, comparable U.S. store sales for the five weeks ended Jan. 2 grew by 2%. But it was Walmart.com, which received record holiday traffic, that grew the fastest. “Sales at Walmart.com were significantly ahead of the same period last year,” the retailer says.
Online sales represent a small percentage of total revenue for many chain retailers, but the fact that many big chains in the fourth quarter will see growth from the web and not from stores demonstrates that more consumers are finding a better shopping experience online, says Nikki Baird, managing partner at research firm RSR Research.
“A lot of these chains aren’t going to have a lot of good news to talk about coming out of the fourth quarter, but for many their web channel is going to be the exception,” says Baird. “A lot of shoppers went online to research which site had the best holiday prices, but consumers are also brand-conscious. They stuck around and completed the purchase on BestBuy.com or Walmart.com even if the price was lower elsewhere because they liked the superior shopping experience or the convenience of buying an item online and picking it up later in-store.”
Not all big chains reported an increase in holiday web sales. In its December sales report, luxury goods chain retailer Neiman Marcus (No. 37) reported a 9.2% drop in direct sales while comparable store sales declined 31.2%. The web makes up about 76% of the chain’s direct marketing revenue. At Williams-Sonoma Inc. (No. 21), where e-commerce accounts for more than three-fourths of the company’s combined catalog and web sales, direct market sales in December declined 23% and comparable store sales dropped 24%.
But even if some upscale chain retailers reported a decline in holiday or Q4 web sales, that didn’t preclude another chain from capturing those transactions. “It’s going to be interesting to watch the big chains when they break out year-end financials because one’s chain’s loss on the web is another’s gain,” says Baird. “I’m hearing a lot of fourth quarter anecdotes that brand-minded and budget-conscious shoppers still gave their online business to a chain. They may not have purchased items on a luxury goods chain retail site, but they probably found a great deal on Walmart.com or Target.com.”