Costco’s October beats expectations
Costco Wholesale posted a 10.1% increase in revenue amid increases in sales traffic and a big increase in online sales.
Costco’s net sales rose 10.1% to $10.02 billion for the four weeks ended Oct. 29, from $9.11 billion during the similar period last year.
Total same-store sales increased 7.5%, ahead of the Street forecast, with a 7% increase in U.S., and a 9% rise in Canada. Other International comparable sales rose 8.2%. For the second consecutive month, comparable e-commerce sales rose 31%.
Monthly comparable sales, excluding the impacts from changes in gasoline prices and foreign exchange, were up 5.6%, with a 5.9% rise in U.S. and a 2.8% increase in Canada. Other International comparable sales rose 7.4%.
Commenting on the results, Ray Young, analyst with Gordon Haskett Research Advisors, said Costco continues to deliver, and that its U.S. sales trends remain “incredibly steady and solid.”
He noted that the retailer’s traffic trends also remain healthy, both globally (up 3.9%) and in the U.S. (up 4.1%).
Adobe data points to record-breaking Cyber Monday
Online sales are expected to go through the roof on Cyber Monday, growing 16.5% over last year.
That’s according to a report from Adobe, which predicts that Cyber Monday will generate $6.6 billion in sales, making it the largest online shopping day in history. Online sales on Thanksgiving Day are expected to increase 15% to $2.8 billion.
Adobe expects that total online sales for the holiday season will be $107.4 billion, an increase of 13.8%. In-store retail is expected to grow 10%.
Large retailers (more than $100 million in annual revenue) will see higher order values and desktop conversion rates than smaller retailers (less than $10 million in annual revenue), according to the report, which is based on data from Adobe Analytics. But retailers are expected to have the mobile advantage with a higher average conversion rate of 1.9% by attracting more shoppers with an intent to buy.
“This year’s record-breaking online holiday shopping season is built on the strength of the big players,” said Mickey Mericle, VP, marketing and insights at Adobe. “We predict the biggest retailers with wide selections, easy shopping experiences and free shipping, to drive online holiday growth this year. Still, there is opportunity for savvy small retailers to win, specifically with mobile experiences.”
Here are some key findings from the Adobe report:
• Mobile shopping: While desktop purchases are predicted to account for two-thirds of revenue this holiday season, mobile is serving as a starting point for many consumers. For the first time, Web traffic on smartphones and tablets is predicted to be higher than for desktops, at 54% and 46% respectively.
• Less big-ticket spending: Consumers are expected to buy more items, at lower prices. Four out of five product categories measured show higher unit growth than revenue growth. Huge unit growth seen in toys (39% vs 24% revenue growth) and apparel (20% vs 17% revenue growth), while jewelry trails (down 3% for both unit and revenue growth).
• Most anticipated gift items: Based on social buzz, the most desired electronics this holiday season include Apple Air Pods, Sony PlayStation VR, as well as home assistants such as Amazon Echo and Google Home. Nostalgia reigns supreme with toys and video games, as Hasbro NERF Guns, Nintendo Switch and Super Mario Odyssey are expected to be among the top-sellers.
Additionally, the top toys from 2016 are capitalizing on their success with updated products that are expected to perform well this year, including Moose’s Toys’ Shopkins and Spin Master Hatchimals.
• Best Dates for deals: The sharpest discounts are expected to occur on Black Friday, with televisions (23.7%), tablets (23.6%), jewelry (12%) and appliances (17.7%) showing the largest price decreases.
Walmart pulling out all the stops this holiday season
BENTONVILLE, Ark. — Walmart has unveiled a multi-pronged holiday strategy that emphasizes convenience, expanded assortments, price discounts, speedy deliveries — and in-store fun. The company said it will throw three themed parties at its stores (for a total of 20,000 parties chainwide) over the course of the season. At the parties, which will include product demonstrations, customers will be able to test (and, in some instances, taste) top holiday items.
The first party, called “Toys that Rock,” will be held on Nov. 4 and be focused on toys. Kids can play with hot holiday toys and take selfies with Santa. The second themed event, on Dec. 2, will be dedicated to holiday entertaining. The third, on Dec. 16, will emphasize gift ideas.
In addition, for the second year, the discounter will have dedicated “Holiday Helpers” on site to help customers at the front-end find the shortest checkout, open registers, and grab items they might have forgotten. The company will increase the staffers, who are decked out with reindeer hats, during the busiest times of the season.
On the merchandise front, Walmart is expanding its product assortment in-stores and online, where it has more than tripled the number of products available this year as compared to last year. The discounter is bolstering up its assortment with more exclusives as well as brands new to it, including KitchenAid, Cuisinart and Yankee Candle. The chain promises deep availability of hot items, with products available in-stores and online throughout the season. And in what is sure to be a competitive season price wise, Walmart said it will offer price rollbacks on “thousands of items” throughout the season.
In other key holiday initiatives, Walmart is offering new incentives for online order deliveries, including making more than two million items available for free two-day shipping on orders over $35.
Holiday shoppers will also, for the first time, be able to take advantage of the chain’s “Pickup Discount,” which provides additional savings on select items for online customers that buy online-only items and ship them to a Walmart store for free pickup. These services augment the discounter’s free Pickup Today service that enables shoppers to reserve items online to pick up in store on the same day.
“We launched some really powerful things for customers this year with free two-day shipping and the Pickup Discount,” said Scott Hilton, chief revenue officer, Walmart U.S. e-commerce. “These programs will be playing a big role during the holiday season.”
Walmart also has doubled its Online Grocery Pickup service locations since last holiday season. The service, which is now available at more than 1,100 locations, helps customers pick up online orders without getting out of their car.