Top-of-Mind in E-Commerce for Omnichannel Retailers — Q2 2023
So, what’s top-of-mind for some of the largest omnichannel retailers today? I asked an AI model to look through recent earnings reports to surface trends related to digital commerce and here’s what it found.
- Strong digital sales growth — Most companies reported ongoing double-digit growth in ecommerce sales and penetration. Digital channels are increasing as a percentage of total revenue.
- Omnichannel capabilities as competitive advantage — Retailers highlighted their omnichannel capabilities like buy online pickup in store, ship to store, curbside pickup etc. as points of differentiation.
- Investing to enhance digital experiences — Companies discussed investments in improving ecommerce platforms, apps, websites, fulfillment, and digital engagement to fuel online growth.
- Gaining share with ecommerce — Several companies said their ecommerce gains are contributing to overall market share gains in retail.
- New services and business models — Companies are testing and launching new digital offerings for customers, like virtual care, digital health, online pharmacy, digital ads, subscriptions etc.
- Integrating digital and physical — Most described an “interconnected” retail model blending digital and physical, with stores supporting omnichannel services.
- Improving fulfillment and supply chain — Retailers called out optimizing supply chain operations and fulfilling digital orders as a priority to support ecommerce growth.
“We exceeded 53 million unique digital customers…and digital sales increased 24%.” (CVS)
“Our digital channels grew…with eCommerce sales penetration increasing to 33% of total domestic revenue.” (Best Buy)
“We continue to see robust digital growth and higher online sales penetration.”(Target)
Omnichannel capabilities seem to be differentiating the strongest players nowadays. Walmart credited buy online, pickup in store options for driving market share gains. Providing shipment flexibility appears to be table stakes now.
Investments in digital engagement, platforms and supply chain efficiency are fueling growth. Home Depot is “leveraging technology to further simplify both the associate and customer experience,” notes EVP Ann-Marie Campbell. Of course, digital order fulfillment and returns remain challenging. Home Depot mentioned rightsizing inventory and layouts is key amidst ecommerce’s rise. Growing online adds complexities.
Many companies are pouring money into enhancing digital engagement, supply chains, and platforms. As Best Buy stated, they are making “investments in digital” a high priority.
New digital business models are also emerging, like Best Buy Health’s “startup within a large-scale organization” approach. Additional growth potential exists.
The melding of digital and physical continues. Best Buy said over 40% of online sales are picked up in stores, showing an interconnected retail landscape nowadays.
If retailers can sustain profitable online growth while meeting digital demands, the future should remain bright. Omnichannel execution seems essential yet difficult. As CVS’ CEO noted, strong cash flows support digital investments.
Ecommerce keeps reshaping retail by influencing investment priorities in material ways.
