The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
Although store sales were down slightly for the year, total sales increased 4.6%.
Despite a 2.1% drop in fourth quarter online revenue partly because of discounted shipping offers, e-commerce net revenue increased 9.3% year over year to $105.4 million at multichannel lifestyle products retailer Brookstone Inc. for the fiscal year ended Dec. 29. That growth helped to offset relatively weak retail store sales and boost total sales 4.6% to $519.6 million the retailer said today.
The full fiscal year increase in e-commerce revenue was driven largely by online marketing and exclusive deals offered with other companies, such as sales of smartphone chargers from Lilliputian Systems Inc. offered exclusively through Brookstone, the retailer said. Other product suppliers making exclusive offers through Brookstone include Puzhen Life USA, a provider of aroma diffusers.
Full fiscal year revenue was also helped by a 51.4% year-over-year revenue surge to $41.6 million in what Brookstone calls its alternative distribution channel,with the increase resulting primarily from wholesale sales to other retailers, Brookstone said. The company’s alternative distribution channel also includes sales to other business-to-business customers that are not retailers.
In the fourth quarter, however, Brookstone suffered several developments that hurt e-commerce as well as retail store and wholesale sales. Online revenue fell partly because of a drop in Brookstone’s paper catalog circulation, which typically helps to drive e-commerce orders, and because Brookstone offered extensive Q4 reductions in shipping and handling fees to satisfy consumer demand for better shipping deals, the retailer said. It also blamed an overall 8.0% drop in Q4 sales on a downturn in consumer confidence related to economic uncertainty last fall.
“While we are disappointed in the fourth quarter results, we are encouraged by improvements in key growth segments of our business such as our e-commerce and alternative distribution channels,” president and CEO Stephen Bebis said.
For the fourth quarter ended Dec. 29, Brookstone also reported:
● Net e-commerce revenue fell by $1.3 million, or 2.1%, to $60.1 million from $61.4 million in the year-earlier period.
● E-commerce sales were 25.8% of total sales, up from nearly 24.3% a year earlier.
● Total net sales fell 8.0% to $232.8 million from $253.0 million
● Retail store sales fell 8.7% to $162.0 million from $177.4 million, as same-store sales declined 6.3%.
● Alternative distribution net sales, including sales to other retailers, fell 24.3% to $10.70 million from $14.13 million.
● Net income fell $11.46 million, or 29.2%, to $27.80 million from $39.26 million a year earlier.
For the full fiscal year ended Dec. 29, 2012, Brookstone reported:
● Net e-commerce revenue rose $9.0 million, or 9.3%, to $105.4 million from $96.4 million a year earlier.
● E-commerce sales were 20.3% of total sales, up from 19.4% a year earlier.
● Total net sales rose 4.6% to $519.6 million from $496.8 million.
● Retail store sales decreased 0.1% to $372.6 million from $372.9 million a year earlier.
● Alternative distribution net sales, including sales to other retailers, increased $14.1 million, or 51.3%, to $41.6 million from $27.5 million a year earlier.
● A net loss of $13.7 million, compared with a year-earlier net loss of $7.3 million
Brookstone is No. 180 in the Internet Retailer Top 500 Guide.