Burlington Stores is Shutting Down its E-Commerce Site
In a world where retailers are taking the fight for market share online, Burlington Stores says it’s going to end its e-commerce operation and focus on growing its brick-and-mortar business. Burlington’s Chief Executive Michael O’Sullivan said on the company’s earnings call last week that e-commerce only accounts for 0.5 percent of sales, and the company’s efforts would be better spent on stores. Burlington’s average unit retail (AUR) is $12, which O’Sullivan said makes it impossible to make money in e-commerce when you factor in shipping, returns and other costs.
Total Retail's Take: Yes, you read that headline right. A retailer is shutting down its e-commerce site in order to shift more money to its brick-and-mortar stores. What "retail apocalypse," right? But I think Burlington Stores is making the right decision here. E-commerce represents just a small sliver of Burlington's total sales, and the continued strength in the off-price store sector (e.g., Ross, T.J. Maxx, Marshalls) suggests that physical retail is what is driving this category. In particular, off-price shoppers cite the "treasure hunt" experience of shopping in-store, which is difficult to replicate online. Furthermore, Burlington is the smallest of the off-price retailers, according to O’Sullivan, and therefore has the most room to grow its physical footprint. In the case of off-price, long live the brick-and-mortar store!