E-commerce depends on ‘product line’ not just ‘tech’: Williams-Sonoma CEO
The e-commerce surge during the COVID-19 pandemic boosted revenue at major tech players like Amazon (AMZN) and Shopify (SHOP), vaulting their stock prices.
But it also uplifted retailers like Williams-Sonoma (WSM), as customers stuck in lockdown focused on home and lifestyle goods.
In a new interview, Williams-Sonoma CEO Laura Alber told Yahoo Finance the company's product line offers it a key advantage over tech-minded competitors in the growing e-commerce marketplace. Ultimately, customers in decor prioritize the top products, she said.
"We're vertically integrated with sourcing and with our own designers, and having that capability to envision a lifestyle trend and bring it to life in products and things that go together is something that a lot of the online players do not do," she says.
"They don't — they're only tech companies," she adds. "That is good for a lot of things, and you have to compete with them on the tech."
"But the product line, right? Isn't it the product that you bring in to your house that matters?" she says.
Second-quarter earnings for Williams-Sonoma, released late last month, beat revenue expectations, while e-commerce accounted for 65% of total company revenue, just a slight drop from the 70% share of sales the company reached last year, Alber said.
The company's stock jumped 15% on the earnings news and has climbed nearly 105% so far this year, as of Wednesday morning.
Despite the success at Williams-Sonoma, the growth of US e-commerce sales in the second quarter slowed significantly from its breakneck pace last year. But e-commerce sales still expanded 9.3%, totaling $211.7 billion, according to a report from Digital Commerce 360.
The slowdown aligns with the latest monthly retail sales numbers for July, which showed a 1.1% decline after an increase the month prior. The decline included a 3% drop in sales at non-store retailers, which includes e-commerce.
Alber, who ran a small business selling hats while a student at the University of Pennsylvania, joined Williams-Sonoma in 1995 as a senior buyer in the Pottery Barn catalog division. She has served as CEO since 2010.
Speaking to Yahoo Finance, Alber said the strong e-commerce performance at Williams-Sonoma owes in part to the challenge posed by home decoration, since customers rely on the the company and its products to address the decor issues in their unique living spaces.
"I know that decorating your home is not something that's easy," she says. "It's dimensional — it's a lot of pieces and parts and everybody's homes are different."
"So I believe so strongly that our success has also been because we spent so much time on our product line and our sourcing structure and our vendor relationships and our sustainability initiatives," she adds. "Those things matter to the consumer."
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