The web takes a bigger share of Williams-Sonoma’s revenue

November 21, 2013 04:44 PM

Home furnishings retailer Williams-Sonoma Inc. continues to see its sharpest growth online, with its web-dominated direct-to-consumer channel accounting for 48.7% of total revenue for the third quarter ended Nov. 3, up from 47.3% a year earlier.

The retailer reports:

• Q3 direct-to-consumer revenue of $511.87 million, up 14.5% from $447.12 million in Q3 last year

• Total revenue increased 11% to $1.05 billion from $944.55 million.

Laura Alber, president and CEO, said in an earnings call with analysts this week that the rise in direct-to-consumer sales was partly driven by improvements the retailer has made in recent years to its e-commerce technology and operations. “Our multi-year e-commerce investments are also yielding returns,” she told stock analysts, according to a transcript of the call recorded by Seeking Alpha. “This year, we've launched more than 50 projects, with over 400 customer-facing enhancements across all of our web sites.”

Among other online improvements, she added, are more personalization of web content based on shoppers’ interests and a new site-wide A/B testing platform for trying out and launching new online shopping features. Alber said Williams-Sonoma, No. 22 in the Internet Retailer Top 500, is also upgrading its mobile commerce sites to make them more “user-friendly, more image-driven,” and improving online marketing efforts “with the result that we are driving more revenue from existing customers and acquiring new ones at lower cost.”

Alber added that the retailer is also improving how it uses social media and cross-channel retailing. Its West Elm brand, for example, posted year-over-year Q3 revenue growth of more than 30%, partly due to the efforts of store managers to manage individual store pages on Facebook and Instagram and coordinate in-store events with bloggers and other “influencers” in social media.

Williams-Sonoma also reported for the third quarter that net revenue rose 16% to $56.7 million from $48.9 million a year earlier.

For the 39 weeks ended Nov. 3, the retailer reported:

● Direct-to-consumer revenue, mostly online sales, rose 13.7% to $1.41 billion from $1.24 billion for the same period a year ago;

● Direct-to-consumer revenue as a percentage of total revenue rose to 48.2% from 46.9%;

● Total revenue increased 10.6% to $2.92 billion from $2.64 billion;

● Net earnings increased 18.0% to $145.1 million from $123.0 billion.




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