Member Exclusive   //   January 04, 2023  ■  24 min read

The Modern Retail Index 2022 E-Commerce Report: How top retailers’ digital services stack up

By Li Lu
01
Introduction

As the Covid-19 vaccine and its subsequent boosters were rolled out across the U.S. population, customers started to return in-store, but their year of relying on e-commerce left an indelible mark. The online-first environment of the pandemic set the tone for retailers to up the experience of their digital platforms to remain competitive. 

This trend continued this year, with many retailers adding new functions to their sites. Indexed retailers, retailers measured in the ranking, increased AR adoption by 200% from last year to this year, and the presence of on-site chat features – most commonly powered by chatbots – increased by 100%. These additions to their sites show marketers using more emerging technologies to engage with customers digitally at a deeper level, as seen in Modern Retail’s recent emerging tech series

Along with new tech, retailers this year also built up their on-site review capabilities: 60% of retailers added the ability to add images to their review function and 20% also added sort and filter options. The increased review capabilities help retailers cultivate more social proofing – discussed in more depth further in the report. 

But even as the restrictions waned and commerce got closer to normal, another threat to consumers everywhere took center stage: inflation, along with a looming recession. As seen from Google Trends search volume, searches for Covid have declined as consumer anxieties have shifted to deeper impacts on the economy.

An impending recession is not just on consumers’ minds. Retailers have started to prepare, either through layoffs, inventory shifts or strategy pivots — and retailers are especially looking for digital tactics to hold on to consumers through whatever comes next. Picking a successful strategy will depend on the retailer’s product mix. 

If a recession hits, consumers might pull back on non-essential purchases related to entertainment, hobbies, home improvement, activities and apparel, which can greatly impact sellers in those categories,” said Chris Palmer, chief executive at SupplyKick, a firm that optimizes sellers’ sales on Amazon. “Similar to 2020, stable items might be prioritized again and luxury and discretionary income items could be in a more dangerous spot if a recession hits.”

As a result, there’s no one-size-fits-all playbook for e-commerce. Consumers shop differently depending on each type of retailer. Consumer behavior and needs dictate the type of e-commerce experience required for each category. Retailers must examine the idiosyncrasies of their business, including how consumers shop in their stores, to determine how best to engage online. 

With developments in multiple industries, Modern Retail has adjusted its Modern Retail Index – now in its second year – by adding new retailers and shifting some retailers into new categories, including the newly added a home goods cohort. Retailers that are new this year: 

  • Nordstrom
  • Container Store
  • Bed Bath and Beyond
  • William And Sonoma
  • Wayfair
  • Overstock
  • Ethan Allen
  • Restoration Hardware
  • Burlington Coat Factory

With all of this in mind, Modern Retail has taken an even deeper look at the top retailers — from big-box stores to pharmacies to home goods — and analyzed the different ways they cater to customers’ online needs. In this index, we drill down to the core components of every retailer’s business — and ways they’ve modernized digital platforms to stay relevant to customers. 

02
Methodology

The Modern Retail Index (MRI) collects data from a list of retailers, and buckets and scores the data into key dimensions and arrives at a total index average score as a benchmarking tool. Retailers are given a deviation percentage from the index average to denote above- or below-average performance. The average changes depending on the list of retailers and the time period of data collection to depict a snapshot of the retailer space at specific points.

In essence, we analyze and rank retailers based on point-in-time data and their performance relative to the other retailers in the index. The e-commerce dimension – our focus in this report – isn’t meant to be the final word in terms of which retailers have the best e-commerce experiences. There are other more difficult to quantify elements that play into digital experience — brand equity, assortment, etc. Instead, by diving deep into each of the sub-dimensions, the index creates a better sense for which retailers have made forward-looking investments and how they ladder back to their unique retail sectors and business models. And contextualizing that beside the other cohorts we analyze creates a fuller picture of how the largest retailers in the country approach top-line strategies.

Within the e-commerce dimension of our rubric, retailers are measured on seven different sub-dimensions: virtual product experience, checkout, reviews, customer service, customer benefits, app and social commerce presence:

  • Virtual product experience measures the performance and features of product display pages. These features on the product page can include the presence of different imagery and recommended products. 
  • Checkout measures the features within the checkout process and the speed a customer can finish the checkout process and the ease of checkout
  • Reviews measure the presence of a review feature and what features the site reviews have.
  • Customer service measures the presence of digital customer service features.
  • Customer benefits measure the presence of different touch points that require customers to volunteer data such as contact sign ups in exchange for perks or information.
  • App measures the incentives that retailers add to their apps to create new customer touchpoints, such as in-store integrations or customer engagement tools.
  • Social commerce presence measures the retailer’s presence and distribution through external social media sites, such as Instagram and Facebook.

Within the indexed retailers, five immediate cohorts were identified: Big-box, Drugstore, Grocery, Dollar Store/Off-Price and, newly added, Home Goods. The index includes Amazon in its own cohort due to its unique positioning in the market. Many of the new retailers will make up the new home goods cohort. Home Depot, Ace Hardware and Lowe’s were previously in the big-box cohort in last year’s index, but now moved to the home goods cohort.

To note, the grocery cohort will be scored but not highlighted in this report. Due to the grocery cohort’s strategy – and the underlying business – standing as an outlier in the index, the analysis will be featured in a separate annualized report.

03
Big-box held onto the top spot, but still feels recessionary pressure

Key Findings

  • While the cohort has not made significant shifts in e-commerce experience, it remains best-in-class in this area.
  • Top performer in the index, Macy’s, raised in rank due to social commerce investments.
  • The biggest winner and retailer that saw the biggest increase in rank year-over-year, Kohl’s, focused on improving its fundamental site features.

The index defines big-box retailers by their large traditional brick-and-mortar store format. The retailers in this cohort sell across multi-brand and multi-product categories. Most notably for big-box stores, they follow a chain store format with nationwide locations as opposed to more regional locations as seen in some other cohorts. The retailers in this cohort included: Best Buy, Macy’s, Walmart, Target, Kohl’s and Nordstrom.

Big-box remained the top performers this year, with new retailer addition, Nordstrom, also landing in the upper levels of the ranking. The biggest changes occurred between the companies within the cohort – as opposed to between the cohort and other groups – as individual rankings shifted this year. Macy’s and Kohl’s all increased their rankings, with Macy’s moving up from second to first and Kohl’s as the biggest mover this year, going up 5 ranks. On the other hand Best Buy dropped the most by 8 ranks, falling from first to ninth. Both retailers built out new features or streamlined existing digital experiences, leading to their increased rank. 

The biggest investments that shuffled the order of the top performers primarily came from changes to the virtual product experience and new additions to their social commerce capabilities. While no big-box retailer removed features, many retailers did not make noticeable consumer-facing updates to take advantage of new social offerings and platform capabilities. However, both Macy’s and Kohls took to investing more heavily into providing AR features for their sites and apps, boosting their virtual product experience score. 

This follows industry trends, as Modern Retail found that marketers have increased AR adoption by 15% in the last 5 years. Another retailer that invested more into AR this year was Walmart. While the retailer did decrease in rank overall, its investment in AR which improved its virtual product experience allowed the retailer to hold their ground, as opposed to its competitor Best Buy. Best Buy seemed more content to rest on its laurels and suffered in standing as a result.

Within the social commerce sub-dimension, two new data points were added. One was the presence of onsite live stream shopping. Both Macy’s and Kohl’s feature live stream shopping, a capability which will help them stay ahead of a nascent but growing trend in the U.S. According to 2,000 U.S. consumers interviewed by Modern Retail and Attest, 58% of respondents have used livestream shopping at least once so far. 

TikTok presence, which was assessed in terms of having an official account on the platform, was the second data point added to this sub-dimension this year. The social platform has surged in popularity the last few years, and having a presence on it has also become table stakes, as seen by the presence of all big-box retailers.

Macy’s led the dimension this year – both overall and within this cohort – through its continued investments in digital. Along with having official accounts on new social platforms, including live streaming and TikTok, the retailer also launched a third-party marketplace on its website. 

In this newest digital venture, its “curated marketplace” on macy’s.com was launched in partnership with tech provider Mirakl. “As brands look at omni-channel e-commerce and having a presence where their customers are shopping, we love what Macy’s is doing with Mirakl,” said George Hatch, Pattern’s, e-commerce accelerator that provides marketplace analytics for brands, director of marketplaces in an emailed statement. “It’s a win-win-win scenario. Macy’s is able to offer more products to its customers, more brands are able to reach Macy’s consumer base, and consumers have an additional curated selection of top products to choose from.” While the retailer has been struggling to meet financial goals over the last few years, its recent Q3 statement showed promise with better than expected performance. As a looming recession clouds retailers’ minds, Macy’s has continued to diversify its digital reach in hopes of increasing sales.

Within the cohort, Kohl’s saw the most ground gained year-over-year, moving up 5 places. While Kohl’s has also struggled financially since the pandemic, the retailer has continued to update its e-commerce experience to play on par with other retailers – and at least in terms of capabilities, it’s paid off. The retailer focused on smaller plays rather than larger features, adding verified reviews into its review system and stream-lining its checkout process to reduce the number of steps needed to complete a purchase. While the majority of big-box retailers look to larger strategic shifts or platform expansions, Kohl’s is a good example of a retailer that focused on improving the fundamentals to build an overall better ecommerce experience. 

Despite lower financial performance – which is accounted for in another installment in this report series – Macy’s and Kohl’s gave a concerted effort to boost e-commerce capabilities in order to try to drive sales.

04
Drugstores move into healthcare to diversify post-Covid vaccine

Key Findings

  • CVS and Walgreens have started adding healthcare services into their business model.
  • As a result of the business model shift, drugstores will likely focus on digital prescription and healthcare sites to further bolster those revenue streams.
  • Non-prescription digital sites will see slower improvements due to the focus on pharma and healthcare platforms.

The drugstore cohort is defined by its unique dual business model: pharmaceutical versus non-prescription products. While other retailers may also include a pharmaceutical branch, retailers in the drugstore cohort specialize in over-the-counter medication in their non-prescription model. The retailers in this smaller cohort include: CVS, Rite Aid and Walgreens.

Similar to the big-box cohort, the drugstore cohort also saw shifts within the group in relative retailer ranking: Walgreens sat at the top of the cohort this year, followed by CVS and then Rite Aid. The ranking shifted year over year, with last year’s ranking with CVS as the top followed by Rite Aid and Walgreens in last. While the group did also collectively drop in rank relative to the overall index, this was primarily due to the new addition of the home goods cohort that outperformed the drugstore cohort.

Shuffling in ranking within the cohort came from marginal changes, such as checkout optimizations and the new additional social commerce points this year. Walgreens and CVS were the two that made changes, adding product suggestion cross-sell capabilities to its checkout process and streamlining the steps to complete a purchase. Integrating cross-sell opportunities into their checkout steps helps to increase average order value. Even with that addition, the cohort on average reduced its steps by 18%, while on average the index – excluding retailers just added this year – saw a 6% reduction. Rite Aid, however, made no major changes to those measured areas on its own site. 

The drugstore cohort still continues to outperform all cohorts specifically in terms of checkout capabilities – and the gulf between it and the rest of the index has widened. Last year, drugstores performed marginally better in the checkout score than other cohorts – 6% higher than the big-box cohort. This year the cohort performed 18% higher than the big-box cohort. This is a result of focus: Rather than attempting to move all capabilities from in-store to online for their non-prescription business, drugstores focused on transitioning key experiences – namely quick checkout. 

As mentioned last year, fast checkout reflects the drugstore customer’s focus on quickly buying last-minute products. This allows the group to recreate the experience of quick purchases customers make for essentials, like toilet paper or toothpaste. 

All in all, not much else has changed for the cohort’s approach to e-commerce since last year’s index. The cohort still balances two business models, prescription and over the counter medication, which may limit its ability to focus on singular areas of improvement. And the cohort still sits at the middle of the index. What has changed for the drugstore group is the status of the pandemic: With the vaccine rollout leading to the majority of the population being inoculated, the cohort has seen some dips in sales without the halo effect from the Covid vaccines or other emergency public health needs.

These retailers’ platforms are feeling the effect of that waning interest, with major drugstores like Walgreens, CVS and Rite Aid seeing traffic dip going into 2022, according to tracking by Gravy Analytics. Among the three retailers, only CVS saw an increase in year-over-year revenue and a positive operating income percentage, emphasizing the cohort’s return to Earth post covid-vaccine. As a result, CVS and Walgreens have started to make investments to diversify revenue streams, particularly in the healthcare category.

CVS acquired Signify Health in September, a health risk assessment company focused on medical home visits and virtual appointments to then connect consumers to proper follow-up care. Walgreens is not far behind: The competing retailer already backs VillageMD. This year, Walgreens Boots Alliance’s VillageMD announced an acquisition of medical care centers operator Summit Health, which owns CityMD, to increase its reach of healthcare spaces. 

Both drugstores have started to invest more heavily into other commerce options outside of its non-prescriptive business, both e-commerce and in-store, due to the slow in those lines of revenue. This transition will likely impact the future changes to the cohort’s online non-prescriptive sites. As a result of that shift, drugstores will focus on digital prescription and healthcare sites to further bolster those revenue streams, marking a new e-commerce experience and playbook in the future.

Furthest behind in the diversification trend is Rite Aid, which has focused primarily on its pharma business with its announcement to partner with Google to modernize its pharmacy operations. While this is a step to improve pharma e-commerce abilities, the retailer has to compete with new pharmaceutical e-commerce sites, like Amazon’s Pillpack and Capsule. While other competitors in the same category are expanding to other businesses, Rite Aid is doubling down on its pharma digital experiences. With CVS and Walgreens likely also to bolster e-commerce experience for its pharma sites to align with their healthcare expansions, Rite Aid will likely have increase pharma-focused e-commerce experiences to compete.

05
Dollar stores see new opportunities in a cost-conscious world, while off-price struggles

Key Findings

  • Many off-price stores remain offline and have no shoppable websites.
  • Dollar stores see a bump due to customers looking for cheaper alternatives as recession concerns continue to grow in consumers’ minds. 
  • Dollar Tree adds Pinterest commerce into its folds – a particularly strong play due to dollar-store DIY projects that the social platform hosts.

Off-price stores are defined in the index as retailers that purchased off-season, discontinued or liquidated products at a discounted rate and sold to consumers at a lower than retail price. Dollar stores are defined as retailers that sell products at dollar or incredibly low price points. The cohort includes: TJX companies, Burlington Coat Factory, Dollar General, Dollar Tree and Ross Stores. Due to the business model of the cohorts, the retailers involved do not have a consistent product assortment. The model also creates a unique scenario in which margins can look drastically different than other cohorts, especially for dollar stores. 

Overall, the cohort performed slightly lower than last year, with mostly low standing within the index. Last year TJ Maxx was able to hold a middle ranking, but this year it dropped to the lower half. The other off-price competitors – Ross and Burlington Coat Factory – did not have shopping-enabled sites. Instead, the index saw stronger performance from the dollar store sub-group. Dollar General and Dollar Tree moved ahead of TJ Maxx this year due to investments in a variety of sub-dimensions.

Dollar General bolstered its reviews space by integrating reviews from other sites (e.g. pulling in reviews for a Maybelline lipstick from Maybelline.com). Due to the inconsistent product assortment of the cohort, dollar store retailers typically do not invest in reviews due to not always having a product in stock. By pulling in external reviews, Dollar General does not need to court organic reviews for its temporary products and can rely on existing external reviews to build product and platform credibility. The retailer also added in-store integration into its app in the form of a coupon finder via barcode scanning. 

Its competitor, Dollar Tree, added cross-selling placements at checkout and – in an interesting stroke – activated on Pinterest commerce. Pinterest commerce is a strong if surprising play for the low-cost retailer to capitalize on dollar-store DIY projects, which often are featured on Pinterest – a strategy that Dollar General does not employ. Aside from the dollar store retailers, we see DIY strategies also play out in the home goods category, discussed below.

06
Home goods leans on customer loyalty to weather a recession

Key Findings

  • The cohort excelled in the virtual product sub-dimension, in particularly through the cohort’s high investment in AR technology. The group accounted for 50% of retailers that incorporated AR technology.
  • The cohort also performed strongly in the reviews sub-dimension, providing the customer with more information and additional social proofing.
  • Lowe’s stands out in the cohort and among home improvement competitors with a live streaming strategy that focuses on DIY projects to highlight its product assortment.

The index defines home goods stores by their specific product assortment that focuses on finished products made to furnish a living or work space. The home goods category also includes retailers that focus on DIY or unfinished products that can be made into a traditional home goods product. The retailers in this cohort include: Container Store, William And Sonoma, Wayfair, Overstock, Ethan Allen and Restoration Hardware, Home Depot, Ace Hardware, Lowe’s and Bed Bath and Beyond. 

The new cohort was a mixed bag of performances: Lowes, Home Depot, Ace Hardware and Container Store ranked in the top 10; William And Sonoma, Wayfair and Overstock positioned themselves in the middle; Ethan Allen and Restoration Hardware landed towards the bottom of the index. 

Overall, home goods retailers excelled in the virtual product sub-dimension, particularly through the cohort’s high investment in AR technology. In fact, home goods accounted for 50% of retailers that incorporated AR technology, allowing customers to view products in-room through a smartphone camera lens. The other 50% were Amazon and big-box retailers. 

Its high performance in AR technology and the overall virtual product sub-dimension is likely due to the big-ticket-priced furniture products it sells and the importance of seeing major purchases like these in an actual living space. Typically the home goods cohort had AR integration in the form of using smarth phone camera lenses to place virtual images of furniture in the user’s living space. This allows customers to see the product and sizing scale in their space before purchase. For online-only retailers like Wayfair and Overstock, it is incredibly important to have features that allow customers to learn more about the product and engage with it in a realistic environment.

The cohort also performed strongly when it came to product reviews. Similar to virtual product experiences, reviews provide the customer more information and additional social proofing – an important aspect for products that will likely have to last years. Social proofing can be defined as if an individual sees another do something or hold a certain belief, they are more likely to do the same. With a strong review feature on their websites, the home goods cohort creates an environment for credible social proofing and more information for customers to decide on big ticket purchases.  

What dragged the cohort down were luxury home goods retailers, Ethan Allen and Restoration Hardware. The two retailers had minimalistic websites due to their focus on custom furniture. Similar to other luxury brands and retailers in different categories, the higher-end home goods brands prioritize individual consumer connections often created through in-store visits rather than casting a wide net through heavier investment in a robust online platform. 

But even with the presence of the luxury home goods stores, the cohort had overall strong e-commerce experience scores, above average in all sub-dimensions relative to the overall index.

Year over year, home organization and storage grew at three times the rate of the overall home category from December 2020 to November 2021, according to research firm 1010Data. That growth is reflected by another new addition to the index, home goods retailer Container Store – which landed in the top 10 of the overall index. The Container Store earns its top score by providing a high touch e-commerce experience. In light of the growth of the category, the big-box cohort has seen potential in the home organization category, the Container Store’s main niche category. Larger retailers have started investing even more heavily in the category, such as in the case of Walmart’s partnership with The Home Edit, an organization service with a Netflix Show, and Target’s launch of a new private label, Brightroom. As competition heats up, the Container Store’s strong digital performance will play an important role against this encroachment by big-box competitors. 

The Container Store scored particularly high in customer benefits. The retailer recently launched a new customer loyalty program in March that features a tiered system based on the amount spent by the customer throughout the year. The efforts are likely aimed at creating and retaining repeat customers – an area that’s become more and more vital for the cohort as whole. Wayfair in particular lost almost two million customers in the second quarter, while repeat customers placed nearly 79% of orders in that same quarter. Dips in customer purchases and a reliance on remaining repeat customers make building customer loyalty a top priority. 

While Wayfair has seen some financial trouble with both a drop in revenue and total customers, the retailer does offer a best-in-class virtual product experience possibly across the entire index. In 2019, the online retailer launched its AR 3D room planner that allowed customers to stage their rooms and view them in mixed reality on a smart phone’s camera. The company also announced an AR-based image search to find similar products on its site. These features, combined with its wide range of home goods products, allows for a strong product discovery experience that also keeps the customer on-site and in a position to buy at any time.

Lowe’s, previously categorized in our big-box cohort in last year’s index, was a top performer index-wide. In particular, it launched a new onsite live streaming feature this year called DIY-U by Lowe’s. The platform features both online and in-person workshops for which customers can register. Currently on Lowe’s website, the retailer offers an incentive – $10 off the next $75 purchase – to participate in one of these workshops, furthering the benefit of deeper engagement with its brand. 

With the workshops featuring products sold on Lowes.com, the clear aim is to create new reasons and incentives for customers to shop at the retailer to accomplish their at-home needs. Other retailers’ live streaming focuses foreground the ability to purchase on the live stream. Lowe’s on the other hand incorporates an educational approach in order to cultivate a need to purchase, while still offering the ability to purchase – a perfect mix for a brand focused on home improvement and DIY projects.

07
Amazon continues to stretch, but feels more competitive heat

Key Findings

  • Amazon has continued to build out new branches and enter new retail categories, including: pharma, apparel, home goods and gaming. 
  • In particular, its move into pharma places a big emphasis for other drugstore retailers to up their prescriptive e-commerce experience to stay competitive and retain buyers. 
  • While the retail giant casts a long shadow across the retail industry, it’s not to say that it isn’t challenged by other retailers, particularly by new competitive subscription offerings.

The Modern Retail Index is designed to explain how well first-party retailers create digital experiences. The list of retailers does include some retailers with third-party marketplaces, such as Walmart with Walmart Marketplace and Target with Target+, but they represent a minority in the list. As a result, and because of its size and reach across industries, Amazon was confined to its own category and landed below big-box retailers in its results due to some of the tradeoffs that come from focusing on a largely third-party marketplace. 

While Amazon did not place as number one in the index, its presence is felt throughout the index as it has continued to grow into competing cohort spaces. Not content to only set standards for shipping in online retail, Amazon has continued to expand to new and emerging categories.

One of the biggest, and perhaps most ambitious, expansion is in pharma. Amazon has been putting pressure on the drugstore cohort with its Pillpack acquisition, as noted in the Modern Retail 2021 Index. But more recently, it announced a partnership with Prime Therapeutics, a major medical insurance provider and parent company to Blue Cross Blue Shield, to create MedsYourWay, allowing certain insurance plan members to get free prescription shipping fulfilled by Amazon Pharmacy. This makes it even more important for other drug-store retailers to level up their prescriptive e-commerce experience – particularly as drugstores build out their own digital healthcare services and platforms. 

The apparel arm of the retail behemoth, Amazon Fashion, also announced a new AR virtual try-on for shoes on its app that will feature a number of different brands. Similar to other clothing- heavy retailers, like Macy’s and Nordstrom, Amazon has developed digital strategies that combine both new e-commerce features, such as virtual try-on, and digitally connective in-store strategies. Along with in-store and digital builds, it has partnered with Gap to sell products on its site – taking aim not just at competitors’ capabilities, but also their merchandising. 

Along with in-store and digital builds, Amazon has also partnered with Gap to sell products on its site – taking aim not just at competitors’ capabilities, but also their merchandising. “Collaborating with Amazon Fashion provides us a new channel to deliver Gap’s modern American essentials to even more customers in the U.S. and Canada,” Gap President and Chief Executive Mark Breitbard wrote in a press statement. “We are excited to take this step with Amazon Fashion, to expand our product offering and to deepen our connection with consumers through the Gap brand store.” 

Amazon has also entered and threatened other categories in less obvious ways. It has quietly become one of the largest players in the home goods category, attaining the second highest market share with 29.7% of online furniture sales, only bested by fellow index competitor Wayfair, according to an estimate from data analytics firm 1010data. Amazon is even extending its reach into the gaming category. Its past acquisition of Twitch paid off with its pandemic popularity, and the retailer has since launched a gaming subscription service called Prime Gaming that offers exclusive in-game bonuses, free games, a free subscription on Twitch.tv and an Amazon Prime subscription. All together, this primes the retailer to compete against other online gaming and gaming retail platforms. While both category entries have not generated as much buzz, they’re sure to have significant future impacts on the e-commerce experience landscape. 

All of those offensive movements are not to say that Amazon isn’t facing its own challenges from other retailers and the overall economy. Walmart, recently also added free Paramount+ subscriptions for Walmart+ subscription members, competing directly with Amazon’s own streaming service. In another corner, Best Buy’s own new subscription product, Totaltech, matches and extends beyond Prime features such as member-exclusive pricing discounts, free delivery, product protection and standard installation for tech goods along with unlimited tech support. 
Feeling the heat, Amazon responded recently by announcing an an increase in its free playable ad-free song catalog from 2 million to 100 million songs for Prime members. “Amazon is being forced to compete as other retailers are getting more serious about the platform model,” Jason Goldberg, chief commerce officer at Publicis told Modern Retail.  “They want to continue to show growth in the Prime program so they feel they need to add new benefits to entice new customers,” added Goldberg. While Amazon remains the dominant player in retailer subscription, other retailers are starting realize their own strength.

08
Conclusion

With the threat of a recession exerting pressure on all cohorts, each one has responded with different e-commerce experience strategies. Some have leaned into existing strengths and best practices, doubling down on improving things like foundational site experience. Others moved into new industries to capture new consumers and boost anemic revenue streams. Ultimately, each cohort must respond to unique consumer behaviors and product assortments that shape their online platforms and prepare them  – for better or worse – for a recession’s financial impact.

Big-box remains focused on fundamentals, making incremental improvements to site fundamentals, like reviews

Due to the wider range of products carried by big-box, the cohort has not made significant shifts due to many new digital features favoring specific product categories over others. Despite the barrier, competitors should continue to watch big-box to determine best-in-class digital fundamentals to meet customer expectations. 

Drugstores add new business into the dual business model

Drugstores investments into adding healthcare services into their model will shake up how their digital experiences are divided. Likely, non-prescriptive e-commerce experience will have fewer improvements as pharma and healthcare digital services are emphasized and enhanced. The cohort’s previous dual model will likely become a three-pronged offering. 

Off-price and dollar stores eye opportunity in the recession

With spending likely to decrease, dollar stores have already started to see benefits from consumers looking for cheaper alternatives. Off-price has struggled to ride this wave, but could look to dollar-store strategies to steady revenue levels.

Home goods excels in virtual product options

The cohort has created best-in-class examples of how to utilize e-commerce features to deliver product education, through relevant usage of AR technology, strong product review features and useful livestream video. While the cohort may struggle with customer retention, the group presents some strong strategies for moving big ticket items.