By Sara Castellanos
Retailers from Home Depot Inc. to Nestlé SA and AutoNation Inc.
have accelerated their e-commerce efforts to keep up with a rush to
online shopping impelled by coronavirus precautions.
Technology executives have overseen the rollout of projects
aimed at making it easier to browse and buy online while minimizing
contact with in-store employees, a trend that will likely continue
even once the pandemic subsides.
U.S. e-commerce sales are forecast to grow 18% to $709.8 billion
this year, according to a June report from market research firm
eMarketer. E-commerce is expected to represent 14.5% of total
retail sales this year -- a record, according to the firm. This
week, retailers including Walmart Inc., Target Corp. and Lowes Cos.
reported surging e-commerce sales for their most recent
quarters.
At Home Depot, online sales doubled in the quarter ended Aug. 2,
representing more than 14% of the approximately $38.1 billion of
net sales, a spokesman for the company said Wednesday. That
proportion was up from about 9% in the same period last year. Total
sales growth in the quarter -- 23% -- was the company's strongest
in nearly 20 years, it said.
"Online has really become the front door to stores," said Fahim
Siddiqui, senior vice president of information technology at Home
Depot.
In mid-March, Home Depot's tech team quickly developed a feature
on the company's mobile app and website to let customers pick up
items in front of the store if they didn't feel comfortable going
inside. The rate at which customers were engaging with the mobile
app and website has more than doubled in the year to date compared
to the same period in 2019, the company said. So tech teams have
had to monitor the compute capacity on infrastructure services such
as Google Cloud to make sure there are no website slowdowns or
interruptions, Mr. Siddiqui said.
To handle the influx of online orders, the company in May
converted one of its warehouses in the Chicago area into a
direct-fulfillment center to ship packages to customers' homes. The
merchandising, supply chain and technology teams moved new
inventory into the facility to fill online orders and converted to
new IT systems to manage the warehouse. The project was completed
in about three weeks, Mr. Siddiqui said.
At Nestlé, e-commerce sales soared this year for products
ranging from pet food to coffee. E-commerce sales on
direct-to-consumer websites such as Nestlé Purina PetCare and
Nespresso grew by almost 50% in the first half of the year,
amounting to 12.4% of total sales of over $45 billion, according to
the company's July 30 earnings report.
"Half jokingly, we were saying from now on it's going to be like
a Black Friday or a Cyber Monday every day," said Filippo Catalano,
group chief information officer at Nestlé.
Mr. Catalano also oversaw efforts to support the move to remote
work for customer service teams to be able to answer questions
about online orders, which included ramping up virtual private
network connections to allow them to securely access work accounts.
Use of cloud services also increased to enable those employees to
communicate with customers.
Gartner Inc. has seen an "incredible surge" in interest in
digital commerce capabilities from IT executives at companies
across many sectors, said Jason Daigler, vice president and digital
commerce analyst at the tech research firm.
Shoppers have chosen to experiment with new home-delivery
methods and purchases from online-only brands during the past few
months, which is forcing businesses to adapt to compete, Mr.
Daigler said.
Companies that have typically relied on in-person sales visits
to sell complex products, such as building materials, are investing
heavily in digital tools that allow customers to configure a
product, get a price and execute a transaction online, he said.
Manufacturers that typically sell through bricks-and-mortar
retailers, some of which closed then maybe reopened in distancing
mode, are now setting up websites to sell directly to customers,
Mr. Daigler said.
The pandemic has accelerated a shift to digital engagement in
customers at AutoNation, said Mike Jackson, chief executive of the
automotive retailer in a July 23 earnings call. The company has
sped up several digital projects over the past few months to adapt
to the changes in customer behavior.
One project, called Store-to-Door, lets customers find and
purchase cars online and have the vehicle delivered to their home
if they don't feel comfortable going into the dealership. The
project had been expected to roll out next year; instead, it became
available nationwide in April.
The company also revamped its website months ahead of schedule
to make it easier for customers to get a quote on their used cars
by answering a few questions, said Marc Cannon, chief customer
experience officer at AutoNation, who oversees IT.
"When we saw what was happening in March, we said we have to
accelerate this and put all hands on deck because the expectations
of people are going to change, so how are we changing?" he said.
"We jumped on it quickly."
"We're in a new place," he added. "Digital is not going to go
away."
Write to Sara Castellanos at sara.castellanos@wsj.com
(END) Dow Jones Newswires
August 19, 2020 17:19 ET (21:19 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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