Have chain stores built up an immunity to the online threat?
Looking at the results this week of the Gap (GPS), GameStop (GME) and Home Depot (HD), it’s starting to look that way. And, like a vaccine made from a strain of the feared disease, these retailers are protecting themselves by injecting a big dose of e-commerce smarts into their business.
Gap beat sales and profit forecasts and raised its outlook for the rest of the year, helped nicely by a double-digit climb in online revenue on top of a 27% increase last year. Digital sales at Gap are now running at 15% of the total.
GameStop shares popped on an upside earning surprise, too. A strong game-console backdrop helped, but GameStop’s revenue from mobile, e-commerce and other Web-enabled business soared 49%.
And even Home Depot, seller of many heavy items carried away on flatbeds, online sales surged by almost 40% last quarter and now account for more than 4% of revenue.
They call this “omnichannel” retail – combining online marketing and shopping tools with physical stores both for browsing and the delivery-and-return process. It’s gone from buzzphrase to real business. Ebay’s (EBAY) whole growth strategy is now geared toward helping chain stores figure out mobile and Web shopping and payments.
It turns out that growth rates for pure online retail are declining steadily and the future looks like some blend of the old clicks-and-mortar formula. The S&P 500 retail-store index has outperformed Amazon (AMZN) shares this year, even as very few investors thought pure retail stocks were a good bet heading into this year.
And, of course, they’re not across the board. Some categories are in a tough spot against Amazon. Staples (SPLS) is a great online competitor but continues to struggle. Activist investors think PetSmart (PETM) needs to invest heavily online.
But on the whole, better retail competitors are learning that selling however and wherever customers want is better than being rigid about whether the mall or the Web is the absolute future of selling stuff.
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