The COVID-19 pandemic fortified online shopping, which grew 22% last year, said the National Retail Federation Wednesday. It's expected to grow 18-23% in 2021 as many consumers new to e-commerce last year “are likely to continue shopping online," said Chief Economist Jack Kleinhenz.
Top U.S. cable and telco providers gained 4.9 million net broadband subscribers last year, compared with a pro forma gain of 2.6 million in 2019, for the most additions since 2008, said Leichtman Research Group Wednesday. Cable companies ended the year with 72.8 million such subscribers (69% share); phone companies, 33 million (31%). Charter’s 2.2 million broadband adds were more than any company had since 2006; telcos had positive net annual broadband adds for the first year since 2014, said principal Bruce Leichtman, citing impact from the pandemic.
Target continued to ship online from stores as the coronavirus crisis wore on, which saves 40% of shipping from a warehouse, said Chief Operating Officer John Mulligan on a Tuesday call. Stores fulfilled more than 95% of sales in Q4, ended Jan. 30. Digital sales climbed 118% from the year-ago quarter. Same-day services jumped 202%, led by drive-up. Target is also testing new fulfillment capabilities. A robotic ship sorter in Perth Amboy, New Jersey, sorts goods, then robots “sequence inventory” so employees can quickly load pallets, the COO said. It’s working on sending stores what they need “before they even know it," he said: The system allowed ordering and restocking 25% faster last year. The next few quarters will be “cloudier” due to economic forces, said Chief Financial Officer Michael Fiddelke. “We’re all battling COVID each and every day.” The stock closed down 6.8% Tuesday at $173.49.
Zoom revenue grew 369% to $882 million in fiscal Q4 ended Jan. 31 “due to strong sales and marketing execution in online, direct and channel businesses as well as lower-than-expected churn,” said Chief Financial Officer Kelly Steckelberg on a quarterly webinar Monday. “Demand was widespread.” The increase in customers generated about 80% of the “incremental revenue,” up from 59% in Q4 a year earlier, she said. “We continue to add customers of all sizes and across industries that we anticipate will provide future upsell opportunities.” Zoom continued to benefit from significant growth in customers with 10 or fewer employees, she said. Customers in that segment generated 37% of revenue, nearly double that of Q4 a year earlier, she said. For the full year of fiscal 2022 ending in late January, Zoom expects revenue to be $3.76 billion to $3.78 billion, which would be 42-43% year-over-year growth, she said: “Although we remain optimistic on Zoom’s outlook, please note the impact and extent of the COVID-19 pandemic and people returning to in-person contact still remains largely unknown.” The stock closed down 9% Tuesday at $372.79.
Roku agreed to buy Nielsen’s Advanced Video Advertising unit, including its video automatic content recognition (ACR) and dynamic ad insertion (DAI) technologies, they said Monday: This will accelerate Roku’s launch of an end-to-end DAI solution with TV programmers. Their new partnership will integrate free Nielsen ad and content measurement products into Roku’s platform to advance the Nielsen One cross-media measurement solution, they said. Combining technologies will allow Roku to deliver the benefits of TV streaming advertising to traditional TV, said Louqman Parampath, Roku vice president-product management. The traditional TV ad market is worth tens of billions of dollars, he noted. Measurement of ads and content on Roku devices will “accelerate the path to a single, deduplicated cross-media currency,” said Scott Brown, Nielsen general manager-audience measurement. Bringing dynamic ad insertion to all forms of TV will help monetize the addressable market by “measuring smart TV as a currency, which Nielsen can do at scale,” he said. The transaction is expected to close in Q2. Roku expects 100 employees from Nielsen’s AVA business to join the company.
More than 12 million U.S. households have canceled home broadband, using only mobile, reported Parks Associates Tuesday. More than 3 million additional households never had a home internet subscription. Cost is the leading reason for cutting this cord, but consumers also reported slow speeds and poor customer service, said analyst Kristen Hanich. Smart Wi-Fi or mesh networking products can stem churn: 75% of households likely to switch providers would stay if offered such a solution, Hanich said. Some 94% of U.S. broadband households use Wi-Fi at home; more than half report problems with their experience, she said. As of September, 41% of households were engaged in remote work or schooling, renewing customers’ focus on their broadband speeds, she said. The COVID-19 pandemic drove 9% of households to upgrade broadband service.
Altice expects to close its $310 million Morris Broadband buy in Q2, expanding its North Carolina presence, the cable ISP said Monday. Altice CEO Dexter Goei said this fits into Altice's strategy of upgrading underdeveloped systems and using fiber-to-the-home deployment to drive growth. Altice has been on the hunt for rural assets to diversify away from the New York market, and Morris' relatively low penetration leaves room for growth, emailed MoffettNathanson analyst Craig Moffett. "It illustrates strong demand for rural broadband assets."
Walmart eliminated the $35 minimum order requirement for Express delivery, but kept the $10 fee, it said Monday, saying it was responding to customer feedback. Express delivery is offered in about 3,000 Walmart stores. Other no-contact fulfillment options -- curbside pickup, delivery from stores and Walmart+ deliveries -- retain a $35 purchase minimum, said the retailer. Store-to-home deliveries have a $7.95-$9.95 fee, and the Walmart+ annual membership fee is $98 annually or $12.95 monthly.
Boingo Wireless agreed to be sold in a $854 million deal to an affiliate of digital infrastructure investment firm Digital Colony Management for $14 per share in cash, said the Wi-Fi carrier Monday. Boingo canceled its financial earnings call Monday. The stock closed 25.1% higher at $14.26.
S&P Global placed DirecTV on “negative CreditWatch” on doubts that the pay-TV company will have a viable business “on a stand-alone basis” after AT&T’s spinoff to TPG is complete later this year (see 2102260022), said the ratings service Monday. “We view the pay-TV distribution segment as having weak business risk characteristics given the secular industry pressures and intense competition from incumbent cable operators,” plus Dish Network and streaming services such as Netflix, Hulu and Disney+. Ongoing financial support from AT&T is “uncertain,” it said.