Retail – Apparel and Shoes industry are leaving no stone unturned to improve top-line performance and expand customer base. Amid fears of the ongoing pandemic and resultant social distancing, companies have been directing resources toward digital platforms, accelerating fleet optimization and augmenting supply chain. Retailers have also been focusing on superior product strategy and advancement of omni-channel capabilities. No wonder, industry participants have been aggressively adopting strategies and making planned investments to cater to consumer demand and behavior in the new normal. Digitization Key to Growth Zumiez Inc. ( ZUMZ Quick Quote ZUMZ - Free Report) is striving to expand its e-commerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands. In this regard, the company has considerably enhanced customers’ experience by integrating its physical and digital networks. This enables customers to access inventories through all channels, alongside availing facilities like buy online, pick up in store and reserve online and pay in store. We believe that the company’s well-balanced store expansion and e-commerce strategies will help this Zacks Rank #1 (Strong Buy) company to keep track of the evolving patterns and drive the top line. You can see . the complete list of today’s Zacks #1 Rank stocks here During second-quarter fiscal 2020, this specialty retailer of apparel, footwear and accessories registered online sales growth of 122%. Zumiez highlighted that third quarter-to-date e-commerce sales for the 37 days ending Sep 7, 2020 were up about 27.4% year over year. The company informed that stores were opened for 73.4% of potential operating days during the quarter. Notably, the company is sharpening competitive edge by investing in logistics, planning and allocation, and omni-channel capabilities, which position it for growth in the near and the long term. The Gap, Inc.’s ( GPS Quick Quote GPS - Free Report) second-quarter fiscal 2020 results showed a significant improvement on a sequential basis with online sales almost doubling year over year as the company leveraged its omni capabilities through its scaled e-commerce platform. This retailer of clothing, accessories and personal care products registered a 95% increase in online sales during the quarter. Notably, its e-commerce business added more than 3.5 million new customers. This represented more than 165% growth in new online customer acquisition year over year. Online sales across brands namely Old Navy Global, Gap Global, Banana Republic Global and Athleta surged 136%, 75%, 26% and 74%, respectively. Markedly, this Zacks Rank #3 (Hold) company rolled out curbside pickup and buy online, pickup-in-store facilities across 1,500 plus stores at the end of the second quarter. To further bolster digital sales, the company has decided to introduce two new payment options namely PayPal and AfterPay. American Eagle Outfitters Inc. ( AEO Quick Quote AEO - Free Report) witnessed strong digital demand in second-quarter fiscal 2020, courtesy of new customer acquisitions, robust traffic and strong conversion. Investments made in digital platform, omni-channel capabilities and supply chain have been aiding in meeting customers’ demand more effectively. During the quarter, this specialty retailer of clothing, accessories, and personal care products registered a 45% increase in app downloads and roughly 39 million sessions. This Zacks Rank #3 company reported a 48% increase in digital demand, as measured by ordered sales, during the second quarter. Digital demand surged by 113% at Aerie and 21% at AE. The company’s consolidated digital sales soared 74% with a 142% increase for Aerie and 47% growth for AE. The Children's Place, Inc. ( PLCE Quick Quote PLCE - Free Report) has been making investments to upgrade its omni-channel capabilities as part of its digital transformation strategy. The company’s $50 million digital transformation investment to enhance omni-channel capabilities in order to meet online demand is reaping benefits. Management on its last earnings call highlighted that since the temporary store closures in March, the company has increased new customers to its digital file by about 175% and converted store-only customers to omni-channel ones at a rate roughly three times the pre-pandemic rate. Furthermore, the company’s app downloads have risen by approximately 115%. Impressively, the company’s digital sales soared 118.2% during the second quarter of fiscal 2020, and represented approximately 71% of total net sales. The company has launched a completely redesigned responsive site and mobile app for The Children's Place and Gymboree brands. It has rolled out "BOPIS" (Buy Online, Pick Up in Store), Save the Sales and Ship from Store, mobile POS in its stores. Further, it launched SMS texting capabilities. It has also rolled out “BOSS” (Buy Online, Ship to Store), the response of which appears to be encouraging. With changing consumer shopping pattern, the company has been making efforts to lower dependency on brick-and-mortar platform and shift toward digitization. The company is aiming mall-based, brick-and-mortar portfolio to account for less than 25% of revenues entering fiscal 2022. Wrapping Up
Owing to this ongoing catastrophe, consumers’ have largely shifted their purchases to e-commerce. As a result, retailers have been quickly moving to leverage their online platforms, including websites and mobile apps, and omni-channel capabilities to serve customers’ demand better. In fact, the companies’ digital businesses had played a key role amid the lockdown. Surely, this was not enough to make up for loss of revenues from brick-and-mortar. Going forward, industry participants will be playing dual in-store and online roles with evolving consumer shopping pattern.
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