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Target breaks into the top 10 list of U.S. e-commerce retailers

Target’s investments in store remodels, same-day delivery, and drive-up services are paying off. The retailer, which used to rank No. 11 in U.S. e-commerce sales, has now jumped three spots to break into the top 10 list as the No. 8 retailer, according to a new report from analyst firm eMarketer. This puts Target ahead of declining businesses QVC and Qurate Retail Group (HSN’s owner), as well as No. 9 Costco and No. 10 Macy’s, the new forecast says.

The firm estimates Target’s e-commerce business will grow 24% in 2020 to reach $8.34 billion, allowing it to crack the top 10 list. However, Target’s overall share of the U.S. e-commerce market remains small in the shadow of Amazon’s dominance. Amazon will claim a 38.7% share of the market this year, versus Target’s 1.2%. Even Amazon’s next nearest competitor Walmart is far behind, with just a 5.3% share.

The rest of the top 10 list includes eBay (5.3%), Apple (3.7%), Home Depot (1.7%), Wayfair (1.5%), Best Buy (1.3%), then Target (1.2%) followed by Costco (1.2%) and Macy’s (1.1%).

Target will just barely pass Costco, which is forecast to generate $8.33 billion in e-commerce sales in 2020. Its growth also comes at the expense of Macy’s, which is dropping from 1.2% in 2019 despite its growing online business. Qurate (HSN) is dropping from 1.2% in 2019 to just 1.0% this year, to find itself out of the top 10 list entirely for the first time.

It’s worth noting that Amazon last year took on video shopping networks HSN and QVC with a live-streamed video shopping service of its own. Amazon Live, as its service is called, streams live video shows from both Amazon talent and brands broadcasting their own streams. That may account for some of the declines these rival networks are seeing in 2020, though the increased numbers of cord-cutters and “cord-nevers” is also likely a contributor as now fewer people are tuning in to shop via their TV.

However, eMarketer chalks up their decline, as well as Macy’s to the softening apparel market. But that’s something impacting all retailers, not just these three — and not just online retail. In January, the U.S. Commerce Dept. said receipts at clothing stores dropped 3.1% in the month — the most since March 2009.

There are several factors at play here. Baby boomers aren’t shopping for clothes as often, casual workplaces mean people can get buy with less expensive apparel, and personalized clothing delivery services like Stitch Fix are becoming more popular. In addition, climate change delivered the second-warmest January in nearly 30 years, reducing the need to shop for winter clothes.

Millennials also don’t invest as much into their wardrobes as prior generations, and have helped further popularize ideas like capsule closets, clothing rental services, and reducing waste by shopping second-hand from places like The Real Real, ThredUp, Poshmark, and elsewhere.

Target’s gains in 2020 aren’t only due to competitors’ struggles or apparel declines, however.

The company has invested heavily to reimagine its business for the age of online shopping. It has innovated on new fulfillment options like next-day (e.g. Target Restock) and same-day via Drive Up and Shipt, for example. Its store remodels took into account a need to better accommodate Target’s digital sales, by making more room for online order pickup.

“At a time when brick-and-mortar stores are struggling to keep up with the fast-changing retail landscape, Target seems to have hit the bullseye,” said eMarketer forecasting analyst Cindy Liu, in a statement. “Store renovations and expanding same-day fulfillment options, such as in-store pickup, drive-up, and delivery with Shipt, are paying off. Target has found a way to use its stores to fulfill online orders while keeping up with customer demands for convenience and speed,” she added.

Other retailers losing market share in 2020 including eBay and Apple, both which will see slight drops.

Amazon, meanwhile, will grow from 37.3% market share in 2019 to 38.7% in 2020, and will capture 4.6% of total retail sales, both online and offline.

Walmart reports lower-than-expected Q4 earnings, despite e-commerce sales growth of 35%

Walmart’s holiday quarter didn’t perform as expected. That’s the big news today from the retailer’s weak Q4 2019 earnings, which saw revenue of $141.67 billion versus the $142.55 expected and adjusted earnings per share of $1.38 versus the $1.44 expected. The company cited a number of factors, including “softer” than anticipated holiday sales in U.S. stores — particularly softer sales of toys, media and gaming, and apparel during the month of December.

Overall, the earnings point to the challenges for Walmart in a market where more consumers than ever are choosing to shop online. Walmart, meanwhile, still makes the bulk of its money from retail stores, not online, though it’s heavily investing in the latter. That leaves it at mercy of the sort of problems it faced in Q4 — like the trouble with the toy industry (that also hit Target), a lack of newness in gaming, a shorter holiday shopping season, and even a warmer winter than has depressed apparel sales across retailers.

Even as large as Walmart’s stores are, they’re still constrained by shelf space and square footage. And when inventory doesn’t move as quickly as it should, sales suffer. In Q4, Walmart’s U.S. same-store sales were up 1.9%, which was short of the 2.3% expected.

By comparison, Amazon’s holiday results crushed expectations. It reported record sales, Prime membership that soared to 150 million paying subscribers, and one-day and same-day deliveries that quadrupled over the same quarter the prior year.

So far, Walmart, like Target and others, has been fairly successful in taking the hybrid approach to retail — meaning its brick-and-mortar business and online side aren’t separated, but rather work together to drive shoppers into stores to pick up their online purchases. Walmart’s pickup business, including online grocery pickup, is helping capture market share and grow Walmart’s overall e-commerce sales.

That remained true in Q4, as e-commerce sales were up 35% with online grocery helping drive those increases. Walmart even boasted grocery sales on a two-year stacked basis were its “best in the past 10 years.” The retailer has also been quickly expanding the number of stores that support online grocery, and ended the year with nearly 3,200 grocery pickup locations and 1,600 stores offering grocery delivery.

However, in a quarter that’s all about boosting business by way of holiday shopping, it’s worth noting that Walmart’s e-commerce sales were up by 41% last quarter, more than the 35% in Q4.

One area where Walmart may need to more quickly expand in the months ahead is its Delivery Unlimited service. Launched in 2019, the membership program for grocery delivery competes with Instacart and others by allowing grocery delivery customers to save on their per-delivery fees by way of a monthly or annual subscription. The company didn’t offer an update on where the program is now available, though it had planned for 50% coverage across the U.S. by year-end.

Meanwhile, Target has now expanded its Shipt same-day grocery delivery service to include non-grocery items from its stores, and has integrated Shipt directly with its own app and on Target.com. And of course, Amazon’s Prime members can shop grocery thanks to Whole Foods, as well as rush their everyday orders courtesy of Amazon’s ever-faster ship times.

In addition, Walmart’s still unprofitable e-commerce business faced other struggles in 2019. Some of its acquisitions in apparel haven’t paid off as anticipated. Last year Walmart sold off Modcloth, Bonobos laid off staff and founder Andy Dunn left. Walmart also shut down Jet.com’s city grocery business, and it just wrapped up its experimental shopping service Jet black.

Walmart additionally pointed to issues in Q4 related to political unrest in Chile, which disrupted the majority of its stores. However, Sam’s Club, Walmex, China and Flipkart did well.

“The holiday season delivered positive transaction growth and underlying expense leverage was strong for the
quarter. However, it wasn’t as good as expected due to lower sales volumes and some pressure related to
associate scheduling,” said Walmart CFO Brett Biggs, in a statement. “We understand the factors that affected our results and are developing plans to address them. We remain confident in our business strategy and our ability to deliver value and convenience for our customers through an integrated omnichannel offering across the globe,” he added.

The retailer also offered lowered 2021 guidance, with earnings expected in the range of $5.00 to $5.15, below analysts’ estimates of $5.22. Walmart said this doesn’t include any impact from the coronavirus outbreak, but it’s continuing to monitor the situation.

 

PhotoSquared app exposed customer photos and shipping labels

Popular photo printing app PhotoSquared has exposed thousands of customer photos, addresses, and orders details.

At least ten thousand shipping labels were stored in a public Amazon Web Services (AWS) storage bucket. There was no password on the bucket, allowing anyone who knew the easy-to-guess web address access to the customer data. All too often, these AWS storage buckets are misconfigured and set to “public” and not “private.”

The exposed data included high-resolution user-uploaded photos and generated shipping labels, dating back to 2016 and was updating by the day. The app has more than 100,000 users, according to its Google Play listing.

It’s not known how long the storage bucket was left open.

One of the customer orders, including photos and the customer’s shipping address. The exposed storage bucket also had thousands of shipping labels. (Image: TechCrunch)

Security researchers provided the name of the exposed bucket to TechCrunch. We matched a number of shipping labels against existing public records, and contacted PhotoSquared on Wednesday to warn of the exposure.

Keith Miller, chief executive of Strategic Factory, which owns Photosquared, confirmed that the data was no longer exposed, but Miller declined to say if it planned to inform customers or regulators under data breach notification laws.

At the time of writing, PhotoSquared has made no reference to the security lapse on its website or its social media accounts.