Dive Brief:
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E-commerce women’s and children’s apparel retailer Zulily Wednesday said that Q2 sales grew 4% year-over-year to $298 million. Q2 net income was $3.54 million, down from $7.76 million year-over-year. Its full-year net sales forecast is steady at between $1.3 billion and $1.4 billion.
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But sales and customer growth slowed, the company said.
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The company said it’s changing its business to focus on retaining customers rather attracting new ones. Customers who shop at Zulily more than once in 12 months rose 19% to 4.9 million and the number of orders they placed in Q2 rose 7% year over year to 5.8 million.
Dive Insight:
Zulily is making incremental changes to its supply chain approach to speed up orders to customers and allow some returns. But at a time when retailers are looking at two-day and even same-day delivery, Zulily’s customers’ wait times of as long as two weeks seems almost shockingly slow. And its Draconian returns policy runs against the prevailing theory that e-retailers must make things as easy as possible to compete with brick-and-mortar stores, whose advantage is immediate gratification.
Zulily’s shares rose Wednesday evening because the company beat expectations. But it has a long row to hoe.
Chances are, Zulily will have to change its supply chain approach even more than it has so far. Its policy of not keeping around any inventory and paying vendors only when goods are sold doesn’t seem sustainable.
