Following a less-than-stellar fourth quarter, Newell Brands, which owns well-known brands, such as Calphalon, Sharpie and Yankee Candle, is deciding to shift its focus in 2017.
Even though total sales for Newell Brands reached $4.14 billion in the last quarter of 2016, that number fell short of Bloomberg’s $4.27 billion sales prediction. As such, the company has decided to shift to an eCommerce focus via the creation of an enterprise-wide eCommerce division. The sole purpose of this new division will be to focus on online growth across Newell Brands’ portfolio.
Internet Retailer shared a quote from Newell Brands’ earnings call with analysts, where CEO Michael Polk said: “As we exit 2016, our eCommerce business has revenue of over $1 billion, has grown over 30 percent compounded over the last three years, and we expect will more than double and grow by over $1 billion by 2020 as we extend our capabilities across our categories and around the world. 2016 has been the most transformative year in our history, and we’re very pleased with the scope, speed and impact of the transformation.”
As foot traffic in many brick-and-mortar retail stores has slowed over the last three years, this strategic move to focus on eCommerce couldn’t come at a better time for Newell Brands. With more and more consumers spending money online rather than physically making the trip to stores, we see the possibility of additional retailers following suit.
To be on the safe side for 2017, Newell Brands has lowered its 2017 sales lower-end forecast goal growth from 3 percent down to 2.5 percent. The company has, however, decided to keep its sales high-end forecast goal growth at a strong 4 percent due to the predicted struggle for retailers as shoppers switch from in-store to online purchases.
Shifting focus to eCommerce shouldn’t come as a surprise to retailers with consumers increasingly shopping on the many available connected devices. While there are a few items, such as clothing and perishable food, that may always have a place in a brick-and-mortar location, the online shopping world will continue to rise.