Walmart and Target huge e-commerce gains are a blaring siren to brick-and-mortar retail
It’s no surprise that amid the ongoing pandemic, retailers are seeing e-commerce sales surge.
But even so, the numbers are eye-popping.
Walmart reported blowout Q2 earnings on Tuesday, led by a 97% surge in online sales. That comes after Walmart’s online sales rose 74% in Q1. The chain, which was criticized years ago for being too slow to beef up its online presence to compete with Amazon, has been on an e-commerce hot streak since before the pandemic and is now a formidable online sales foe to Amazon, which saw its net sales rise 40% in Q2.
Target saw its online sales spike 141%, and said that in April alone, online sales were up an astonishing 282%. Target reports second-quarter earnings on Wednesday and is likely to disclose similar massive e-commerce gains. Even Etsy, which due to its size is rarely compared to giants like Amazon (AMZN), Walmart (WMT), and Target (TGT), saw its sales (which are entirely online) rise 137%, driven by mask purchasing, which comprised 14% of all sales in the quarter.” data-reactid=”23″>And stay-at-home habits have served as a tide to lift many retail boats: in the first quarter Target saw its online sales spike 141%, and said that in April alone, online sales were up an astonishing 282%. Target reports second-quarter earnings on Wednesday and is likely to disclose similar massive e-commerce gains. Even Etsy, which due to its size is rarely compared to giants like Amazon (AMZN), Walmart (WMT), and Target (TGT), saw its sales (which are entirely online) rise 137%, driven by mask purchasing, which comprised 14% of all sales in the quarter.
e-commerce grew 44.5% in Q2, the biggest quarterly growth in more than 20 years. The e-commerce surge stands in brutally sharp contrast to the headlines in brick-and-mortar: bankruptcy filings galore, including Lord & Taylor, Men’s Wearhouse parent Tailored Brands, Ann Taylor and Lane Bryant parent Ascena Retail, Lucky Brand Jeans, and The Paper Store, all in the past two months.” data-reactid=”24″>Overall, U.S. e-commerce grew 44.5% in Q2, the biggest quarterly growth in more than 20 years. The e-commerce surge stands in brutally sharp contrast to the headlines in brick-and-mortar: bankruptcy filings galore, including Lord & Taylor, Men’s Wearhouse parent Tailored Brands, Ann Taylor and Lane Bryant parent Ascena Retail, Lucky Brand Jeans, and The Paper Store, all in the past two months.
None of this is very surprising at first glance.
retail sales rose 1.2% in July, which was less than predicted but marked the third straight month that spending rose, a good sign of economic recovery. Consumers are shopping again, but they’re doing it online.” data-reactid=”46″>As Americans continue to work from home and socially distance, they’re shopping online, and also beginning to make more than just essential purchases online. U.S. retail sales rose 1.2% in July, which was less than predicted but marked the third straight month that spending rose, a good sign of economic recovery. Consumers are shopping again, but they’re doing it online.
So, this massive e-commerce surge can be largely chalked up to the pandemic.
The scarier question for traditional brick-and-mortar retailer is: What if it isn’t?
TJX) and Ross Stores (ROST), both of which have been dinged for their weak e-commerce platforms, and both of which also report Q2 earnings this week.
Walmart’s report also sheds light on what items Americans are buying online: everything, including food. Walmart says its online grocery pickup ordering “continued to experience all-time high sales volumes” in Q2. Profit, which some analysts expected to suffer due to shoppers buying lower-cost items, also beat expectations. Walmart saw fewer total transactions (down 14%), but bigger totals when people did shop (average ticket price rose 27%).
Even as many retail chains re-open their doors or extend their open hours (as Walmart and Dick’s have both done in the past month), the breakdown between digital sales and physical sales will be a fascinating focal point for the 2020 holiday shopping season.
