By Ken Kraetzer
Shopping is continuing to grow online especially for Amazon.com, which is increasingly selling third party merchandise and services such as cloud computing, leaving others such as Walmart, Home Depot, and Nordstrom vyingg to keep pace. Perhaps a consequence of this living room online shopping is less visits to restaurants on shopping trips and more meals at home.
“Off Price is aggressively stealing share” commented Ryan M Craver, author of the “Tech Infused Retailer”, noting growth in 3Q retail earnings for Ross, TJ Maxx, and Nordstrom Rack. Craver states that department stores such as JC Penney continue to struggle, “Nordstrom is the only line department store to post a positive year over year comparison.”
Amazon.com continues to dominate mobile and desktop generated retail with the start of 2016 holiday sales season. Craver mentioned in his “Tech Infused Retailer” blog that in five day period in November, Amazon had 384 million visits, a 9.5% increase from the 2015 season. The next two retailers in the comparison? Walmart.com had 54 million visitors up 14.0% and Etsy.com 30.3 million up 9%. Another strong online performer is The Home Depot Inc. at 30.3 million visitors up 17%. Several notable brands struggled on-line as Best Buy was down 9.7% and K-Mart moved downward 22.4%.
The former Hudson Bay and Accenture exec points out growth at Amazon generated by third party sales is “extremely profitable for Amazon, fuels product selection and require no inventory investment.” Craver adds that services such as cloud computing are generating “32% of total net sales for Amazon.”
In an attempt to catch up, Walmart announced they will open 35 supercenters “to claim more of the shopping dollars which are rapidly moving online.”
Overall retail sales, Craver indicated, grew 29% in third quarter with “product sales and service up 21% and 50% respectfully”.
Perhaps all this online shopping is encouraging consumers to stay at home an eat. Restaurants have shown weakness in recent months, Craver finds, due to “less trips, lower cost groceries, more at-home meal kits and new supply exceeding population growth.” North American restaurant growth in second quarter was its slowest since 2009.
Could groceries be the next big category to move online? Craver reports a Kantar Worldpanel that shows South Korea is the leader with 17% of groceries bought online while the United States market stands currently purchases 2% of total groceries online.
A good friend of cbsi, frequent trade speaker @RyanMCraver is CEO of children’s retail marketer www.Trimfit.com.