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The Pandemic Helps the Biggest Online Retailers get Bigger, Peloton Recall Will Reduce Revenue by $165M and Honest Co. Makes $413M IPO Debut


The Pandemic Helps the Biggest Online Retailers get Bigger

As consumers across North America searched, often desperately, for essential items during the COVID-19 outbreak, they not surprisingly, turned first to the best-known retailers. These mostly large merchants also tended to have the most inventory, which became a crucial differentiator as factory shutdowns created shortages of many in-demand products. Both factors helped the biggest retailers in the 2021 Digital Commerce 360 Top 1000 grow the fastest. Just the 12 largest retailers by web sales in this year’s ranking of North America’s leading web merchants accounted for 71.4% of the growth in Top 1000 sales from 2019 to 2020, growing collectively by 56.3%. Inc., No. 1 in the Top 1000, was a big part of that growth—but by no means most of it. In fact, Amazon’s robust growth, which includes its commissions from sales by marketplace sellers and other seller fees as well as sales of its own merchandise, of 41.4% by Digital Commerce 360’s estimate was not sufficient to keep the leading e-retailer from losing market share to some of its biggest competitors. For example, Walmart Inc. (No. 3) grew online by 79.0%, Best Buy Co. Inc. (No. 5) by 144.4% and Target Corp. (No. 6) by 145.0%.

What stood out to us? Pandemic Helps the Biggest Online Retailers sell toilet paper.


Peloton Recall Will Reduce Revenue by $165M

Peloton Interactive Inc. projected revenue of $915 million in the current quarter, saying the recall of its treadmills would reduce sales by about $165 million. Shares gained about 5% in extended trading after investors had prepared for a larger blow. CEO John Foley said the financial impact would be “short term” from the halt to sales and recall of the Tread+ and Tread products. Peloton had planned May 27 for an expanded U.S. rollout of its less-expensive Tread, which has only about 1,050 models on the market, but Foley said Thursday the widespread launch will be delayed while safety improvements are put in place. Peloton, in conjunction with the U.S. Consumer Product and Safety Commission, on Wednesday announced the recall of the treadmills. The $4,295 Tread+ was connected to the death of a child and more than 70 reports of incidents, while the touchscreen of the less-expensive Tread was at risk of falling off. The products account for a small percentage of the company’s hardware revenue, which is primarily generated by stationary bicycles, but are seen as key future growth drivers. Foley said the company is working on new safety measures for the treadmills, including a software update that will include a passcode requirement for the more expensive model. Hardware changes are also being worked on, but must be approved by regulators, and may take six to eight weeks, he said. The company expects about 10% of users to seek refunds for their treadmills.

What stood out to us? Finally it will be safe to fall off my Peloton.


Honest Co. Makes $413M IPO Debut

The Honest Co. made its trading debut Wednesday in a further test of co-founder Jessica Alba’s pitch to would-be wellness investors. The personal-care products brand and its venture capital backers raised $413 million in an initial public offering Tuesday, selling 25.8 million shares for $16 each after marketing them for $14 to $17. An actress turned entrepreneur, Alba included a letter to potential investors in the company’s filings touting Honest Co.’s commitment to healthy products. In addition to baby products like shampoos, the company also sells cosmetics as well as cleaning supplies, a collection that was launched during the coronavirus pandemic. That pandemic launch, along with all other 2020 product launches, accounted for 22% of total revenue for Honest Co. Alba, who has starred in movies such as “Fantastic Four,” traced her interest in healthy products to her own childhood ailments. “I suffered from chronic illnesses, severe asthma and allergies, leading to long, lonely weeks in the hospital,” she said. “There were no lasting solutions for my health issues and by the time I was 10, I became aware of how wellness can define your whole life. That’s never left me.”

What stood out to us? Honest toilet paper was a missed opportunity.

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COVID-19’s effect on B2B buyers.

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