Namely, small businesses. More than 60% of the businesses that sell on Amazon are small and independent, Amazon says in a new report. Collectively, those businesses in 2022 sold more than 4.1 billion products — or an average of 7,800 products every minute — Amazon says.

Sales per small business store on Amazon averaged about $230,000 per store, according to Amazon’s new report, 2022 Small Business Empowerment.

Dharmesh Mehta, vice president, worldwide selling partner services, Amazon.com Inc.

“Selling in Amazon’s store has enabled independent sellers to employ an estimated 1.5 million people in the U.S.,” says Dharmesh Mehta, vice president of Amazon’s worldwide selling partner services. “And during the 2022 holiday season alone, Amazon customers purchased nearly half a billion products from small businesses in the U.S., leveraging Amazon’s significant investments in customer traffic, a trusted shopping experience and fulfillment and logistics capabilities that enable fast and convenient delivery.”

Amazon small business metrics

• In 2022, Amazon and its third-party lending partners lent $2.1 billion to independent sellers.
• The top small business categories include health and personal care, home, beauty, grocery, and apparel,
• The states with the most independent sellers are California, Florida, New York, Texas, and New Jersey.
• The fastest growing are Alaska, Washington, D.C., Mississippi, Maine, and Wyoming.

“While small businesses continue to thrive by selling in Amazon’s store, running a small business has never been straightforward,” Amazon says. “And this past year brought new challenges that businesses of all sizes had to navigate. The economy saw rising interest rates and inflation not seen in nearly 40 years. And many businesses continued to face supply chain issues because of the global pandemic and its aftereffects.”

Amazon.com Inc. is No. 1 in the Top 1000. The database is Digital Commerce 360’s ranking of North American web merchants by sales. It is No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.

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In 2019, Black Wolf Skincare invested in fulfillment software from ecommerce fulfillment services vendor ShipHero. At the time, Black Wolf processed about 1,000 orders per month.

Alex Lewkowict, co-founder, Black Wolf Skincare

“By my calculation, even at our volume of 1,000 orders a month, we saved more than $2 in shipping costs [per order] using their ecommerce tool,” he says. The tool helped Black Wolf Skincare find the cheapest available shipping carrier, he says.

“The plan started around $1,800 a month,” he says.

Using ShipHero’s software tool “was a no-brainer for us that paid for itself right away,” he says.

Shipping price fluctuations

Another pain point was price fluctuations, Lewkowict says. The men’s skincare brand could no longer ship from its one warehouse. Transit times were too slow or too expensive to ship to anywhere in the U.S., he says.

By the end of 2020, demand grew to more than 17,000 orders a month, Lewkowict says. And by the end of 2021, orders averaged about 25,000 a month. This prompted the retailer to outsource its entire shipping and fulfillment processes to ShipHero, he says.

By December 2022, Black Wolf Skincare averaged more than 40,000 orders a month.

With ShipHero, Black Wolf Skincare could inbound ship directly into any of its warehouses. Black Wolf Skincare manufactures its products in Florida.

Black Wolf sends its products to ShipHero’s West Palm Beach, Florida, facility. ShipHero then distributes shipments across its network of warehouses and carriers to ensure the fastest delivery times. As a result, Black Wolf was able to reduce the time it takes to ship orders to customers.

“Our average shipping time to customers went from five plus days to under three days for the same cost,” Lewkowict says.

That includes next-day shipping to anywhere in Texas, Florida, Georgia, New York and New Jersey, he says.

ShipHero ships Black Wolf’s orders using local carriers, Lewkowict says. “Customer satisfaction goes up as wait times decrease,” he says.

“I think a lot of brands are relying on 3PLs to bring in expertise that isn’t their expertise,” says Maggie Barnett, chief operating officer at ShipHero.

“It’s really tough to run a 3PL,” she adds. Third-party logistics services (3PLs) are the outsourcing of ecommerce logistics processes to a third-party company like ShipHero. 3PLs handle inventory management, warehousing and fulfillment operations.

“Companies want to concentrate on making the best product possible, not know what a routing guide is or worry about just-in-time delivery or that UPS is limiting your pickups, et cetera,” Barnett says.

Selling on Amazon makes a difference

Black Wolf Skincare began as a direct-to-consumer brand. But in mid-2020, Lewkowict says it realized that the brand was losing sales by not selling on Amazon.com Inc.

“We were very against going on Amazon because we wanted to have value in owning the customer relationship,” Lewkowict says.

That viewpoint changed. A consultant told Black Wolf Skincare that consumers were searching for the brand on Amazon directly or clicking on Google ads and Facebook ads and then going to search for the brand on Amazon.com. But since Black Wolf wasn’t selling on Amazon, consumers opted for products by other Amazon sellers/competitors.

“Instead of finding our product on Amazon, they’d see competitor options that were also advertising using the same keywords,” Lewkowict says.

Black Wolf Skincare launched on Amazon in 2020. Amazon sales accounted for about 10% of Black Wolf Skincare’s overall sales, he says. Since then, that percentage has grown. Selling on Amazon has “added a tremendous amount of volume and revenue,” he says, without revealing more. The average order value for Black Wolf Skincare’s DTC website and Amazon store is about $65, he says.

Lewkowict says the men’s skin care brand has capitalized off Amazon traffic. Some customers only want to buy off Amazon, he says.

“So, whether they’re seeing our TV ads or a Facebook ad, they’ll always go to Amazon to comparison shop,” Lewkowict says. “Our strategy here is to encourage those Amazon shoppers to go and buy on Amazon. Traffic that comes off of Amazon helps our ranking [on the marketplace search results]. The more shoppers search for our products, the better our ranking.”

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The EU Court of Justice, the bloc’s top tribunal, dismissed Amazon’s challenge. Amazon cannot appeal the final ruling.

Amazon had objected to a European Commission decision allowing Italy to continue running its own probe into the “buy box.” That’s where Amazon highlights sellers of a particular product. Amazon objected after the EU’s antitrust arm started to examine the same issue.

The mass merchant last year settled the EU probe by offering a number of remedies, including a pledge to address concerns about the way its Buy Box for showcasing specific offers and Prime unduly favored its own retail business, including a promise to display a second Buy Box immediately underneath the first one.

Amazon is No. 1 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by sales. It is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Stateside Amazon antitrust probes

The Federal Trade Commission has been looking at Amazon since 2019 over antitrust concerns with its retail business and cloud computing services.

The U.S. Federal Trade Commission revamped in June its Amazon antitrust probe. It shook up the investigative team, re-interviewing potential witnesses and asking questions about the company’s recent acquisition of MGM Studios, three people familiar with the probe said.

Other recent Amazon trouble

In March, an Amazon consultant pleaded guilty in giving sellers a competitive advantage.

Ephraim “Ed” Rosenberg was the final holdout among five U.S.-based defendants accused of paying off Amazon employees in exchange for confidential company data. Among other things, the data helped them steer business to some merchants and shut out their competitors.

Four other people have already pleaded guilty to the Amazon bribery scheme. Two of them have been sentenced to prison. One former Amazon employee who lives in India and allegedly accepted bribes was indicted but never arraigned.

The Amazon bribery scheme which began as early as 2017. It seemed plucked from a Hollywood script, with payments criss-crossing the globe via MoneyGram, PayPal and suitcases stuffed with cash sent via Uber.

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Amazon ranks No. 1 in the Top 1000 list of ecommerce retailers in North America, and No. 3 in the Online Marketplaces database. 

Amazon returns at UPS will no longer be free

Customers who drop returns off at UPS locations could be charged $1 per order going forward, The Information first reported. The fee will only apply if there is a Whole Foods, Kohl’s, or Amazon Fresh location closer to the order’s address than the UPS store. 

“We offer convenient, easy returns to Amazon customers, with one or more options for label-free, box-free returns at no cost,” a spokesperson told USA Today. “We always offer a free option for customers to return their item. If a customer would prefer to return their item at a UPS Store when there is a free option closer to their delivery address, a very small amount of customers may incur a $1 fee.”

Amazon will list some products as “frequently returned”

The online retailer also added a badge to some items warning customers that they are “frequently returned.” The Information first noticed the label on a record player and two dresses.

“We’re currently showing return rate information on some product detail pages to help our customers make more informed purchase decisions,” a spokesperson told The Information.

Amazon did not return Digital Commerce 360’s request for comment. 

Returns matter to customers, but they’re not the most important factor

A Digital Commerce 360 survey of over 1,000 consumers in August 2022 found shoppers regularly consider a potential return before they purchase. 54% take free returns into consideration, and 39% also look at the cost of a return. One-quarter of consumers said the timeframe is important.

It’s too soon to tell if Amazon customers will react negatively to the new policy, according to Michael Levin, co-founder and partner at research firm Consumer Intelligence Research Partners. 

“We expect it’s not a huge deal, though, and a very small percentage of marginal customers would react negatively,” he said. “Consumers decide first on cost and convenience of buying something, and think later, if at all, about how easy (or not) it is to return that thing.”

Some customers have already taken to social media to complain about the change, Business Insider reported.

The new policy keeps Amazon on par with the competition, Levin said.

“Many, many retailers charge customers for return shipping, although as far as we know, the major ones (Walmart, Target, etc.) don’t do it aggressively,” he said.

These changes around returns are a more transparent way for Amazon to be upfront about costs with customers, Josh Lowitz, also of Consumer Intelligence Research Partners, said.

“This move is similar to Amazon offering a dollar or two for accepting slightly slower shipping, or combining deliveries into a single delivery day. Amazon is letting shoppers know that they will share the savings, if a customer allows Amazon to operate more efficiently,” he said, by keeping prices lower for less expensive types of returns. Lowitz also pointed to Amazon’s policy of offering returned items for sale at reduced prices.

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Everybody’s doing it

On a positive note, all of those surveyed indicated they buy beauty products online. A look at the numbers suggests 70% of online shoppers buy beauty products online at least monthly (some going as far as buying daily). Furthermore, 31% of that group is buying online at least weekly. The remaining 30% purchase on an annual basis, so everyone has embraced the online channel.

Retailer segments play into online beauty product sales

Online beauty shoppers search for particular products and brands, taking advantage of a range of retailers to meet those needs. Each retailer segment has a role to play, though competing with Amazon and other mass merchants is challenging. Amazon tops the list of merchants shopped online at 59%. Meanwhile, mass merchants like Target and Walmart come in at 52%, and drug stores follow at 36%.

Amazon also tops the list of Top 1000 retailers. The Top 1000 is Digital Commerce 360’s database ranking the largest online retailers in North America by web sales. Walmart ranks No. 2, and Target is No. 5.

Amazon is also No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Specialty beauty retailers are strong, as shoppers cited buying from both standalone choices at 29% and their partnerships with larger retailers (27%). With Ulta and Sephora partnering with major retailers like Target and Kohl’s, access to these products has certainly grown, and shoppers have taken notice.

Department stores have lost market share to other retailer sectors as shoppers change how they buy. One in four survey respondents reported shopping at them.

Direct-to-consumer brand shopping at 21% is meaningful, with 12% penetration among digitally native, vertically integrated brands (DNVBs), sounding a positive note for brands going direct.

New to our survey this year were marketplaces beyond Amazon, at 18%, and social media ads at 15%. Both should see gains among their respective audiences in years to come.

Dimensionality is the differentiator

Beauty buying online is multi-dimensional, from replenishment to experimentation and education, where execution can be a differentiator. The web is perfect for comparison shopping, and 36% felt it was easier to do that online. Shoppers also spend time learning about products and experimenting, helping to make new product sales viable with purchases taking place online and offline.

From an education and experimentation point of view, online shoppers were learners at their core in the following ways:

• Learn about new brands and products, and buy online: 30%
• Learn about new brands but buy in physical stores: 22%
• Experiment online when looking for new products: 22%

Given the nature of the beauty category, 34% report that most of their purchases are for replenishment. The significant loyalty to brands is critical for retention, as their loyalty to brands and products in the beauty category leads to frequent buying for 34% of participants. Another online driver is finding out-of-stock products in the stores. That was a reality for 31% of those surveyed.

Product detail pages are critical to buying beauty products online

Beauty is a feature-rich category, and online shoppers are hungry for product information.

Information of interest includes product details (56%) and the all-important product availability coming in No. 2 (55%). A list of ingredients is desirable for 48%, and 23% call out the ever-growing interest in vegan and cruelty-free products. Of course, imagery is not to be slighted, as 25% believe ample product images have a role to play.

Online shoppers appreciate saving money, embracing promotions and samples (27%) and gift with purchase promotions, a beauty mainstay at 19%.

Selection tools are playing an increasing role in profiling shoppers and assisting them to make smart selections. That includes the ability to profile beauty needs (22%), how-to guides or video tutorials (12%) and virtual try-on tools (11%)

Logistics will be top-of-mind, making in-store pickup (BOPIS, 17%) and curbside pickup (13%) options desirable. Mobile apps, which 12% noted, will undoubtedly play a role, as does the retailer’s social media presence at 9%.

Shoppers find value in using tools to assist in beauty purchasing

• Color-match tools: 35%
• Virtual try-on tools: 21%
• Augmented/virtual reality: 10%

Customer service sees online shoppers embracing chats with beauty experts along with other outreach. Chatting with a beauty expert (23%) topped the list. Others of interest among beauty buyers were sending a question to a retailer (17%), sending an image to a retailer (15%) and booking an in-store beauty appointment (13%).

Beauty subscription boxes see adoption and this bodes well for future purchasing as 20% tried this model. Lastly, 15% watched a livestreaming beauty event while 17% downloaded a retailer’s mobile app (17%).

Shopping perks and experiences

Saving money and perks matter most to price-conscious online shoppers and that meant rewards program perks for 36%. 26% gravitate to brands believing they would be more likely to offer free shipping. And speaking of shipping, 21% of respondents felt they would get their products quicker.

A strong beauty shopper experience starts with trust, broad assortments and comprehensive content all serving to inspire the shopper. Our results revealed that 23% had greater trust in brands, while 22% enjoyed the broader product assortments seen among these companies. Along with the trust factor, 22% had less concern for counterfeit goods among brands.

The experience also came into play, with 19% choosing brands for their more comprehensive content and the complete brand experience. They cited a more authentic experience (16%) and the fact that brands were more transparent about both the values and products they sell (14%). That same 14% cited they enjoyed being part of the brand community, with 12% finding the sites more inspiring.

The biggest influence

There are a broad array of influencers when it comes to selecting beauty products, but friends come first, where just under half (46%) acknowledge their role. That compares with just 15% who pointed to celebrity influencers.

Beyond influencers, video is a strong factor in beauty selection. That starts with YouTube (32%) and continues to how-to videos/tutorials (23%) and livestreaming events (11%).

Retailers must have strong content across social media to optimize the impact of influencers. The numbers here came in for Facebook (31%), Instagram (29%) and TikTok (26%), respectively.

Beauty subscription services can play an influential role as well among the 16% who had signed up for them.

Reasons to walk into a store

Store visits persist.

When asked about when they choose to go to a physical store, almost half of online beauty buyers said they need their products quickly (47%) or want to see the products in person (46%). Other tactile reasons include in-person testing (36%) and simply getting a full sense of the brand experience (16%). Some 20% also enjoy getting advice from in-store experts.

Shoppers also will seek out the store channel when they want to save money. That includes in-store sales or promotions for 39% and not wanting to pay for shipping for 37%. Omnichannel needs, from pickups to returns, prompt visits. They included an option to do both of these for 18% of survey respondents.

20% want to support local retailers post-COVID, along with attending an event at 10%.

There is a trust factor as well for 14% who are more confident buying in person. 12% expressed a concern that online shopping will mean receipt of counterfeit goods.

Does it look good?

Next we dove into how a site presented itself. First and foremost, the site look and feel is most important to online beauty buyers. 41% of survey respondents cited that element. Other important presentation factors were accurate swatches that aren’t photoshopped (35%) and model diversity (22%).

Thus, branding from sustainability to one’s story and stances including diversity, trade, social and charitable elements continue to see interest among shoppers. It is nice to see sustainability rise to the top of this group, and therefore it deserves a mention.

Online shopper sentiment was as follows:

• Sustainability practices: 25%
• Brand’s story: 24%
• Diversity stance: 21%
• Fair trade views: 18%
• Social and political views: 18%
• Charitable giving: 15%

Long-term value

It’s powerful to see that more and more shoppers care about sustainable beauty brands.

78% of these online shoppers factored in sustainability when purchasing beauty brands. Some 19% already buy these products (19%), and some are even willing to pay extra (18%). The largest segment (28%) is those who care about sustainability but do not yet put their pocketbooks on the line to seek out such products. 13% don’t want to pay more. The opportunity is to convert those who care and haven’t yet converted to becoming customers.

In many ways, beauty is one of the easiest categories for online consumption. Shoppers can get comprehensive information to guide their decision-making on first-time purchases. Then, replenishment kicks in and buying is almost on autopilot. Online shoppers have many choices, so the brands retailers put forth, the features, and tools they employ to guide their customers will ultimately determine their market share.

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The payments company was valued at $50 billion in a fundraising round just last month. It said volume climbed 26% to $817 billion in 2022, according to the firm’s annual user letter published on April 5. That compares with 60% in 2021, when Stripe and many of its rivals saw rapid growth as consumers did more shopping online during the pandemic.

“We feel like, given the climate that it was, we’re very happy,” John Collison, who along with his brother Patrick founded the company, said in an interview. “2020 and 2021 were such fun years with ecommerce in particular. You had such a maelstrom of activity, and there was no way that would continue.”

The letter confirms parts of earlier reporting in the run-up to Stripe’s moves last month to raise $6.5 billion to cover a looming tax bill for veteran employees with expiring stock options.

The $50 billion valuation it received was well below the $95 billion it was last valued at when it raised $600 million from investors in 2021. The company’s results — and its accompanying drop in valuation — mirror many of its peers in online payments, including PayPal Holdings Inc. and Adyen NV.

Stripe focuses on enterprises

While Stripe helped startups take payments over the internet during its earliest days, it’s been targeting larger firms in recent years and now counts Amazon.com Inc. and Zoom Video Communications Inc. as customers.

Amazon is No. 1 in the Top 1000 database. The Top 1000 is Digital Commerce 360’s ranking of North American web merchants by sales. Amazon is also No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.

More than 100 companies now handle more than $1 billion in payments with Stripe every year and that set of customers has grown by 50% annually since 2018, Stripe said in the letter.

For years, large retailers have viewed the technology they need to take payments as a cost. Now, Collison said, they are considering how that technology can boost revenue.

That’s because ecommerce players increasingly struggle with conversion rates, which measure the percentage of visitors to a website that actually make a purchase. On average, that rate hovers around 3% for most ecommerce sites, according to McKinsey.

“Checkout pages across the internet are riddled with needless friction. 10% of payments still fail for no good reason when transacting online,” the brothers said in their letter. “At Stripe, we obsess over fixing this.”

In its letter, Stripe analyzed what it called “breakout startups” or new companies with unusually high revenue growth.

The company’s data show Silicon Valley may be losing its allure for startups: In the three years leading up to the pandemic, more than 60% of these so-called new breakout startups were based in San Francisco. Since 2020, just 46% were.

“San Francisco remains the clear leader,” John Collison said in the interview. “But what we’re seeing is that there is a less San Francisco or Bay Area centrality in tech.”

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Walmart Inc.’s job cuts at five U.S. ecommerce fulfillment centers will affect more than 2,000 positions, according to regulatory filings, though impacted employees may find other roles at the company.

The losses include more than 1,000 positions at a warehouse in Fort Worth, Texas, the state’s workforce commission said April 3. The retail giant is also anticipating a reduction of almost 600 jobs at a Pennsylvania fulfillment center, 400 in Florida and about 200 in New Jersey. It plans for more reductions in California.

The regulatory filings add precision to the staffing cuts at the Walmart warehouses, which the company confirmed in March without quantifying. Walmart is also growing in some areas as it adjusts its stores and fulfillment centers to handle more online orders, a spokesman said in an email. That may enable the retailer to reshuffle some workers to other jobs rather than cut them.

As a result, the net impact on total employment at Walmart, the largest private-sector employer in the U.S., remains uncertain. The company has avoided the kind of mass layoffs underway at rival Amazon.com Inc., which said in March it would eliminate another 9,000 jobs in addition to 18,000 recent cuts.

Amazon is No. 1 in the Digital Commerce 360 Top 1000 database. Walmart is America’s largest overall retailer and is No. 2 in the Digital Commerce 360 Top 1000.

California’s fulfillment warehouses show signs of slowdown

All across Southern California’s Inland Empire, the warehousing mecca that hosts Amazon and Walmart facilities, there are signs of trouble.

Just last year, the region was hiring workers faster than California and the rest of the U.S. It emerged as a top beneficiary from the supply-chain turmoil that clogged warehouses and led to record imports through North America’s largest port complex near Los Angeles.

Now, the gush of cargo that once flowed through the 27,000-square-mile area, stretching from east Los Angeles to the Nevada and Arizona borders, has dwindled to almost three-year lows and jobs are harder to come by.

It’s an ominous sign for California, already reeling from the tech collapse and a banking crisis. And it’s a glimpse into what may lie ahead for the rest of the U.S. as it stares down a potential recession.

California is the world’s fifth-largest economy. It projects a mild recession is possible, giving way to concerns that the pain would hit the Inland Empire’s blue-collar workforce especially hard.

“When the party ends, then you know the drop will be even faster,” said Johannes Moenius, an economist at the local University of Redlands. “The more warehouses we have today or tomorrow, the steeper the fall.”

Supply chain data

Data released April 4 showed U.S. supply-chain activity fell to the lowest in at least 6.5 years in March, with low transport prices for goods driving the decline in the Logistics Managers’ Index.

The Inland Empire, an epicenter of California’s 2008 housing crisis, occupies a strategic location just east of the twin hubs of Los Angeles and Long Beach. It collectively handles about $500 billion in goods annually.

With a population of almost 5 million, it delivered a remarkable increase in transportation and warehousing jobs during the pandemic, peaking at 215,000 last year and marking a 40% surge from February 2020.

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Peter Stratton Jr.,
executive vice president and chief financial officer, Destination XL Group Inc.

DXL prides itself on its in-store customer shopping experience, Stratton says. But customers want the option to shop online as well, he says. More than 30% of DXL’s sales are online. Its 281 stores across the U.S. also serve as additional fulfillment locations when needed. This allows the retailer to cast a wider net and reach more shoppers.

“The problem with a store is that you’re constrained by how many customers are within a reasonable drive time to that store,” Stratton says. “Whereas online, you’re not constrained by any geographic restrictions.”

If a customer drives to a store for pick up, they’d better not show up only to find out the item isn’t there.

DXL online sales and Q4 earnings

DXL’s online customer base is growing. On March 16, DXL told investors its digital commerce sales grew 58.3% from fiscal 2019-2022. Digital commerce sales are those that originate online through DXL.com, at the store level through its Universe platform, or through a third-party marketplace. DXL also sells its private-label products on Amazon.com Inc., Walmart Inc. and Target Corp. marketplaces.

Direct-to-consumer website sales increased 9.9% in fiscal 2022, which ended Jan. 28, compared with fiscal 2021. For the fourth quarter of fiscal 2022, direct sales to the website were $49.2 million, up 35.2% compared with $46.8 million a year prior. DXL online sales represent 34.2% of DXL’s total retail sales.

Online conversion is less than 5%. In-store conversion falls within mid-40%, Stratton says.

More than half of DXL’s total sales in 2022 came from mobile devices, Stratton says.

DXL ranks No. 458 in the Top 1000, Digital Commerce 360’s database of the largest North American online retailers by web sales.

Managing in-store and online inventory

The retailer’s distribution centers remain the most cost-effective way to ship merchandise. But store locations also serve as satellite fulfillment centers when necessary. “Many of the stores do that,” he says.

“The stores all have the capability to fulfill direct orders, but we choose to use stores as a last resort to the distribution center,” he says. This is particularly useful in offloading clearance inventory that might otherwise sit unsold, he says. But, the strategy behind in-store is to promote the experience for the customer, he says. “Not process inventory.”

DXL sells a large variety of brands and assortments. Over the last two years, the retailer has cut its assortment of brands it sells, he says.

“There were a number of smaller brands that just did not make up a more meaningful position in the assortment,” he says. “We’ve had to eliminate some noise.”

Instead, Stratton says the retailer is focusing on its exclusivity agreements, such as owning the Nautica apparel brand to sell in big and tall sizes both in store and online. Other brands include Polo Ralph Lauren, Vineyard Vines and Robert Graham. A curated assortment for what Stratton calls the underserved customer. About 50% of DXL’s inventory is its private-label brands, and designer collections comprise the other half.

BOPIS strategy

When customers want to buy online, whether through the website or through the app, and pick up in store (BOPIS), DXL’s in-house inventory management software triggers a query at the store level so associates can physically ensure the item is available in the store for “shop by store.” The associate confirms that with the customer before the customer drives to the store for pickup, Stratton says. Stores download the order and can typically pick up the item within four hours, he says.

DXL does not use a safety stock buffer, which triggers once a SKU gets below a certain quantity and no longer offers it online for purchase. Safety stock buffers are extra product kept aside for expected delays from suppliers.

“We don’t use this because of the low units per SKU, which would significantly limit the number of items in the assortment that we could offer online,” Stratton says.

Over the last five years, DXL has equipped its sales associates with iPads using its in-house Universe software from retail management software vendor Aptos.

“The customer is able to shop online [at DXL.com] while he’s in store trying it on,” Stratton says. The technology pulls together the desire to try on products in person combined with the endless aisle of shopping online, he says.

“We can hold a lot more merchandise in our warehouse distribution center than we can in store,” he says.

Whether buying in store or online, the average order value for DXL customers falls around $140, Stratton says.

Filling a niche need on marketplaces

Besides through DXL.com, the retailer’s online sales also come from Amazon, Target and Walmart marketplaces. DXL currently only sells its private-label products on marketplaces, marketing them as “essentials.”

“I think it’s really important for us to be where customers are shopping,” Stratton says. “If a customer is not going to come into a DXL store and only shops on Amazon, whoever is playing on the Amazon marketplace is going to capture that.”

“We want to make sure we capture that sale,” he continues. It is the retailer’s hope that customers who buy through a “transactional experience,” such as marketplaces, become DXL.com customers.

“Big and tall is all we do. We don’t play in regular sizes at all,” Stratton says.

Stratton declined to share what percentage of online sales come from marketplaces specifically.

“The majority of our [online sales] are on DXL.com,” he says. “But Amazon [and other marketplaces] are areas that are definitely growing. We need to make sure we’re there for him to be able to offer that customer our product as well.”

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The post Destination XL Group uses stores to help promote its website appeared first on Digital Commerce 360.

The post Hybrid marketplaces lead growth in GMV in 2022 appeared first on Digital Commerce 360.