E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Mass merchants flex their muscles
The mass market retailers in the Internet Retailer Hot 100 have one thing in common: they’ve used their considerable resources, including their stores in the case of retail chains, to make themselves more appealing to online shoppers.
Amazon.com, which defied the recession with steady sales gains, puts its cash to work buying Zappos.com, the leading shoe e-retailer. Amazon also bought Lexcycle Inc., a developer of software for digital downloading, to support its sales of digital content and of the Kindle e-book reader. In a potential game-changer, it also introduced same-day delivery of online orders in seven cities.
Overstock.com this fall launched O.biz, a wholesale site that sells goods in bulk, targeting businesses. The e-retailer also improved personalization on its site, recalling the items a shopper previously viewed and presenting those and similar products on its home page on the shopper’s return.
Kohls.com makes the most of peak buying periods with temporary shops featuring seasonal items. A Holiday Gift Shop, for example, corrals lower-priced gifts for shoppers looking for great values.
Sears.com and Walmart.com leverage what mass multichannel retailers have plenty of-stores-to close the loop on online orders and boost sales. Sears.com customers can pick up their purchases in stores, schedule a pickup online or designate others to pick up purchases. Walmart.com has built on its successful free site-to-store program with a new offer of a year of expedited site-to-store shipping for $29.
By taking advantage of their large organizations and deep pockets, these merchants are making themselves more formidable online competitors.
Amazon.com Inc., already the leading online retailer by sales, used its financial might this year to expand its reach in digital books and mobile commerce and its assortment in shoes and apparel. In April the company bought Lexcycle Inc., developer of Stanza, a software program for downloading and purchasing digital books. In June it bought SnapTell Inc., a specialist in visual product search technology for mobile devices. In October it reduced the price of the Kindle e-book reader to $259. And in November Amazon bought shoe and apparel retailer Zappos.com Inc. For recession-minded consumers Amazon expanded its private label brands into electronics and kitchen utensils. And the e-retailer raised the bar for fast delivery this fall by rolling out same-day delivery in seven major cities.
Product navigation can be a challenge to any e-retailer; bringing together products from 225 web sites becomes a task of epic proportions. But Hayneedle.com has done the job. The former NetShops.com redesigned its web site and refashioned its name to build the Hayneedle brand and tie together thousands of SKUs for housewares, and outdoor and home products. The new Hayneedle.com site-and its specialty web stores-all feature sharp imagery, a top navigation bar that gathers related web stores’ products together, and a universal shopping cart that follows shoppers from site to site. “NetShops was a disconnected collection of unrelated stores,” says Ash ElDifrawi, chief marketing officer, Hayneedle Inc. “Now shoppers get product recommendations and we’ve seen a significant increase in multistore sales.”
Kohl’s Corp.’s web site, launched later than some in 2000, has advanced to the point of boasting features that other e-retailers can learn from. Kohl’s strategy creates a sense of excitement about shopping the site, with online exclusives and time-limited offers such as one-day Power Pricing and a Deal of the Day at certain times of the year. Kohls.com also responds to specific shopper concerns with savvy merchandising. For example, a Holiday Gift Shop, one of several shops it creates during peak shopping periods, addresses customers’ worries about finding great values by offering gifts by price categories and a shop-by-budget feature. Kohl’s also has introduced an iPhone application that delivers “Today’s Ad,” letting shoppers purchase from the ad and providing a store locator.
Meijer Inc. is back on the Internet Retailer Hot 100 list for the second consecutive year with new features that leverage trends in mobile commerce and social networking. Its Mealbox and WineList software widgets can be used on an iPhone or a PC to view products, prices and specials available in Meijer stores. Meijer.com engaged back-to-school shoppers with a product price-guessing game that awarded winners Blu-ray DVD players and let players post their results on Twitter and Facebook, boosting conversion rates and the number of Meijer’s e-mail subscribers. For the holidays, the retailer launched an “Elf Daily Steal” daily deal feature. “Sales are up two and half times over last year,” says director of e-commerce marketing Dawn Bronkema, and she says there is more innovation to come.
Overstock.com Inc. launched a decade go with the mission of selling excess inventory through the Internet, aiming to combine the best values in merchandise with a great customer experience. This year, Overstock sought to enhance that customer experience with personalization, community features and mobile outreach. The site remembers what a visitor has viewed on previous visits and spreads thumbnails of those products, plus similar items, across the home page for consideration on the visitor’s return. Community features include ratings and reviews, as well as footholds on Facebook, Twitter and YouTube. Shoppers can register to receive coupons and deals on their mobile phones. And Overstock unveiled this fall a new bulk buying site, O.biz, aimed at small and midsized businesses.