The manufacturer and retailer is upgrading its inventory management and supply chain systems to prepare for a global network of e-commerce sites.
Holiday web sales grew exceptionally well for GameStop, Kohl’s, Macy’s and others.
Thanks to big discounts and an early start, several big chain retailers reaped the benefits of a strong holiday shopping season online.
In numbers reflected in the December sales reports for five big chains—Best Buy Co. Inc., No. 10 in the Internet Retailer Top 500 Guide, GameStop Corp. (No. 115), Kohl’s Corp. (No. 43), Macy’s Inc. (No. 20) and Urban Outfitters Inc. (No. 53)—customers also increased their online shopping more than their purchases in stores.
Specific December sales results include:
- Best Buy. Web sales up 13%, comparable-store sales down 5% and total sales down year over year 1.2% to $8.4 billion from $8.5 billion.
- GameStop. Web sales up 100%, comparable-store sales up 3.4% and total sales up year over year 5.2% to $3.02 billion from $2.87 billion.
- Kohl’s. Web sales up 66%, comparable-store sales up 3.9% and total sales up year over year 6% to $3.19 billion from $3.01 billion.
- Macy’s. Web sales up 28.8%, comparable-store sales up 3.9% and total sales up year over year 4.3% to $4.61 billion from $4.42 billion.
- Urban Outfitters. Web sales up 28%, comparable-store sales flat and total sales up year over year 15% to $520 million from $452 million.
“It was ‘a tale of two cites’ for many chain retailers this past holiday season with an early start and aggressive discounting paying off in bigger online sales, but store sales still lagging behind the web,” says Jim Okamura, managing director of Chicago retailing consulting firm Okamura Consulting. “Some of the chains are still trying to come to grips with the shift of holiday shoppers spending less time in stores and more time online.”
GameStop says holiday sales online for its nine-week holiday period ended Jan. 1 doubled over the previous year because of ongoing enhancements to its web infrastructure, key acquisitions and more incentives for its PowerUp Rewards loyalty program, which includes 6 million members. “Over the holiday, GameStop reaped the benefits of its investment in e-commerce,” says GameStop president Tony Bartel. “GameStop.com sales rose more than 100% versus last year, far outpacing online industry growth during the period, remaining the fastest growing web site in the video game space.”
At Kohl’s, for the five-week Christmas shopping period ended Jan. 1, aggressive discounting, a national online and traditional advertising program—”Give, Save and Be Merry”—and more abundant Thanksgiving holiday web exclusives, helped Kohl’s grow its Christmas e-commerce sales. “We are pleased with our e-commerce business, as significant investments in information technology and distribution helped us achieve a 66% increase in sales this month,” says CEO Kevin Mansell.
Best Buy says web sales were a bright spot in the five-week holiday shopping period ended Jan. 2. Overall, consumers bought fewer big-ticket items such as TVs, but more mobile devices. “The consumer electronics category posted a 7.9% comparable-store sales decrease due primarily to a low double-digit decline in televisions as the industry continued to experience softness, partially offset by strength in e-readers,” says Best Buy.
Macy’s, which last week announced it was adding 725 full-time jobs over two years to support its growing online business and in December began building a 1.3 million-square-foot Internet fulfillment facility in Berkeley County, WV, says growth was strong all year online and especially during the five-week holiday shopping period ended Jan. 2. “Our Internet sales continue to grow rapidly as part of the omnichannel strategy at Macy’s and Bloomingdale’s, allowing customers to shop seamlessly in stores, online and via mobile devices in a manner that meets their needs and preferences,” says CEO Terry Lundgren.
Most chains still don’t report any e-commerce numbers in their December sales reports. But as a group, chain retailers fared pretty well online this past holiday shopping season, especially ones that spent time and money giving their customers a better Internet user experience, says Okamura.
“I am just back from the National Retail Federation show and a lot of retailers told me their online holiday sales were up this year from 20% to 50%,” says Okamura. “They still see so much upside to selling online, but struggled with stores.”