This week in eCommerce Target makes the weekly wrap-up again! Target announced this week it will be cutting jobs in an attempt to save $2 billion, of which most will be invested back into the company to improve eCommerce and mCommerce. Rachel Zoe, trend-setter and stylist to the stars is delving into the world of eCommerce with her new subscription box called, the “Box of Style”, which will cost subscribers $100 per quarter. Goods have been touted to be well-worth the cost. Electronics chain Best Buy’s web sales are up! Internet Retailer estimates that Best Buy generated $3.54 billion online in 2014, a growth that is attributed to increased traffic and higher conversions. Niche marketplace Etsy filed to go public this week, with an aim to raise $100 million! For all the details from this week’s newsmakers read-on below:
Target announced this week that it will be cutting thousands of jobs in attempt to save $2 billion over the next two years. These positions will primarily be cut from the company’s corporate headquarters in Minneapolis, which employes over 13,000 workers in addition to workers in India. Although this job elimination is obviously not good news for employees of Target, it is a strategic move that will benefit the corporation greatly in the future – or so Target hopes. In a shift of its spending Target will take about half of the savings from the cut and invest in technology. This is a far cry from its past plans that only focused on investing in physical store planning and renovations. Target’s CEO asserts, “We have to be more nimble, more agile. We have to create a more innovative culture”, and he’s right. It’s an innovate or die world out there and mobile commerce (mCommerce) is where customer spending and shopping experiences are headed. In addition to reassessing its tech strategy and invesments, Target is also revitalizing its grocery department to focus on natural and organic foods. Despite Target’s Canadian failure, they’re doing all they can to improve in the U.S., starting with eCommerce; cutting minimum order value to qualify for free shipping, and shipping from stores rather than warehouses to speed-up service.
Rachel Zoe, once a former behind the scenes girl for your favourite best-dressed celebs, now widely-known trends expert is getting into the eCommerce game. Rachel’s popular newsletter “The Rachel Zoe Report” is now offering a subscription service to consumers. Zoe’s “Box of Style” will cater to the discerning fashionistas, with a box sent every quarter for $100 per box, or $350 when you purchase a full-year upfront. All good will remain a mystery until they arrive at your door-step, but will range from clothing to beauty and accessories from known and up-and-coming brands. This eCommerce venture of Zoe’s is following in the footsteps of ever-so-popular subscription beauty boxes, like Birchbox who opened their first bricks-and-mortar location in in New York City last year.
Best Buy’s eCommerce is killing it, growing at a slightly stronger rate than U.S. web sales from 2014. Best Buy reported that web sales in Q4 of 2014 increased 16.7% while the U.S. Commerce Department reports overall web sales growth of 15.4%. Internet Retailer estimates that the electronics chain made $3.54 billion online in 2014, a 16.4% increase over the same period last year. This year-over-year quarterly growth has been attributed by Best Buy to higher conversion rates and increased traffic. Net income for the retailer was up 77% at $519 million in 2014 from $293 million a year ago. For all the details from how well Best Buy performed in 2014, click here for the full report including all reported statistics.
It’s official. We touched on this speculation back in January, but Etsy announced this week that they are indeed filing an IPO with the aim to raise $100 million. We even have the link to their S1 form to prove it! It’s no surprise, Etsy saw great success over the years, with earnings of $74.60 million in 2012 to $195.59 million in 2014. With $88.84 million in cash the online marketplace can certainly afford to fund its operations for years to come. Etsy’s pricing strategy could set the tone for IPOs this year, but we can guess that it should be reasonable. Etsy claims to have 1.4 million active sellers on the site, with 19.8 million active buyers. Etsy will be trading under the name $ETSY, we think ET$Y would have been more fun.