Carter’s said online sales grew to 36 percent of total retail sales in the quarter as compared with 32 percent last year.
Carter’s had a nearly 40 percent decrease in off-price sales which were elevated last year due to Toys R Us and Bon-Ton closures. That decrease in sales was largely offset by double-digit growth in exclusive brand sales to the largest retailers of young children’s apparel, which are Target, Walmart and Amazon.
Carter’s growth in international sales in the quarter was driven by a strong finish in Canada with comparable retail sales up about 8 percent. Earnings in the quarter were lower than last year and reflect the impact of lower traffic to our U.S. retail stores.
“Consumers are choosing the convenience of shopping with us online. E-commerce continues to be our fastest growing and highest margin business,” Carter’s CEO Michael Casey said in a recent analyst call.
Carter’s brands have the largest share of e-commerce children’s apparel market in the United States with twice the share of nearest competitor.
Carter’s direct-to-consumer business provides a multi-brand website experience with three of the best-known brands for families with young children, including Oshkosh B’gosh and Skip Hop.
Last summer, Carter’s completed a year-long effort to strengthen the experience shopping with us online, improve the product presentation, navigation, search capabilities and checkout experience.
In the fourth quarter, Carter’s online experience was rated superior to a majority of the 60 largest U.S. and European e-commerce sites.
Carter’s invested in technology which enables the same-day pickup of e-commerce orders and full access to the broader scope of our product offerings to consumers shopping in its retail stores.
Carter’s tested with success a new capability which enables us to fulfill e-commerce orders from stores. Carter’s CEO believes this initiative will improve the productivity of inventory, increase the speed of related deliveries to three days or less and reduce the cost of those deliveries.
The investment in online experience in omni-channel capabilities improved the trend in e-commerce sales in the second half of 2019. “Given the secular shift to online shopping, we expect our e-commerce penetration to total U.S. retail sales to grow from 32 percent in 2019 to 42 percent by 2024,” Michael Casey said.
Carter’s stores and websites have become interdependent in recent years. Carter’s in 2019 achieved 10 percent increase in omni-channel customers. Carter’s highest value customer prefers shopping with online and in stores. These customers spend nearly three times the annual amount of store-only or e-commerce-only customers.
Carter’s same-day buy online, pick up in store service gained significant traction particularly as the Christmas holiday drew closer and consumers’ sort out the convenience of in-store pick up of their purchases versus waiting for shipment to their homes.
Carter’s noticed a significant increase in the number of consumers choosing to have their online orders shipped to their local store, which is obviously encouraging as it drives additional traffic to retail stores.
Carter’s tested fulfillment of online orders from a number of store locations. Carter’s is now planning to expand the use of stores for online order fulfillment later this year.
Carter’s re-launched its website offering better customer experience. Website has become more easy to navigate and shop, especially for consumers using mobile devices. Carter’s made investment for improvements and enhancements across multiple areas and achieved increase in conversion and sales growth since the new site went live.