Hibbett's Omni-Channel Efforts Gain Steam With BOPIS & ROPIS
Hibbett Sports, Inc. HIBB lost the first-movers advantage to its peers, having launched its e-commerce site in mid-2017. However, the company has been gaining ground in the e-commerce space with its concerted efforts ever since. The company’s recently rolled out Buy Online, Pick Up in Store (BOPIS) and Reserve Online, Pick Up in Store (ROPIS) capabilities are testament to its efforts to enrich the online shopping experience of customers. The introduction of these capabilities marks the beginning of a new chapter in the company’s efforts to fortify its omni-channel presence, which is a key focus area.
These omni-channel capabilities provide shoppers the option to buy products online and pick them from stores, and reserve products which can be tried at stores before picking up. This saves time by reducing the effort to browse through the store for a particular product, providing increased convenience. The latest options also enable customers to reserve multiple items without any purchase, make same-day pick up and authorize any person on the customer’s behalf to pick up the order. Additionally, BOPIS feature is cost-effective as shoppers can avail their order without paying for shipping costs.
Hibbett’s e-commerce sales accounted for nearly 8% of total sales in second-quarter fiscal 2019. Also, the company has been witnessing significant gains from its loyalty program as the loyalty members reflect about 60% of Hibbett’s transactions. Moreover, the company is likely to drive traffic at stores by reinventing the e-mail program, direct mail program and in-store raffle process with the app. It expects the small market strategy along with omni-channel capabilities growth to enrich customers' experience, thus positioning Hibbett well for future growth.
Meanwhile, retailers like Nordstrom, Inc. JWN, American Eagle Outfitters, Inc. AEO and Abercrombie & Fitch Co. ANF are significantly benefiting from solid omni-channel capabilities, including e-commerce. Nordstrom’s digital sales improved 23% in second-quarter fiscal 2018, with digitally-enabled sales growth of 34%. American Eagle’s digital sales contributed about 24% to net sales in second-quarter fiscal 2018, which marked the company’s 14th straight quarter of double-digit e-commerce growth. Further, Abercrombie is making significant progress in expanding digital presence with expansion of Direct-to-Consumer (DTC) capabilities. Notably, Abercrombie’s DTC sales surged 16% in second-quarter fiscal 2018 and accounted for nearly 26% of net sales.
In fact, the abovementioned players were among the first retailers that started off early to catch up with the industry trend of online shopping. However, we believe Hibbett has shown significant resilience since launching its e-commerce site. Currently, the company is on track to boost sales and overall profitability on the back of its omni-channel initiatives and loyalty program. Further, the launch of these facilities at this time should drive significant traffic at Hibbett’s stores and online site in the ensuing holiday season.
In the past three months, shares of Hibbett have lost 21.8% against the industry’s 3.5% growth. This downside can be attributed to this Zacks Rank #5 (Strong Sell) company’s unimpressive results in the first half of fiscal 2019. Additionally, the company’s soft margins trend over the past few quarters has been a concern. Management trimmed its guidance for fiscal 2019 as well.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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