The social network is making the 15-second ads available to a select group of advertisers. The videos start playing without sound. When a consumer ...
In Full Swing
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Catalogers, of course, jumped on the web sooner and more aggressively than did store-based merchants, many of which lacked a direct-to-consumer merchandising capability. As a result, the traditional catalogers included in the Top 300 Guide get a much higher percentage of their total sales from the Internet. As a group, the 23 catalog firms whose web sites are ranked among the country’s 100 largest retail sites generate 18% of their total sales from the Internet. If the retail stores operated by these catalogers are removed from the equation, the web would account for about 25% of their direct-to-consumer business.
But that average blurs the distinctions between their respective performances. Of these 23 catalogers measured on percentage of web to total sales, the leaders are Bear Creek Corp. (Harry & David specialty foods) and Drs. Foster & Smith Inc. (pet supplies), each of which generate 45% of their sales online. Other notables are J.C. Whitney (auto parts), Sportsman’s Guide Inc. (outdoor gear), Crutchfield Corp. (electronics) and Lillian Vernon (gifts), all of which get slightly more than a third of their sales over the web. By comparison, Spiegel Inc. (apparel) and Cabela’s Inc. (outdoor gear) get only 14% and 9% of their respective total sales from the Internet, figures that are somewhat misleading because both also operate stores. Still, Cabelas gets only 18% of its direct-to-consumer sales from the web, and Spiegel, which is rapidly closing stores as part of its Chapter 11 reorganization, likely gets less than 20% of its direct-to-consumer business from the web.
The re-birth of the pure-plays
While retail chains and catalog firms are expanding their web sales percentages as part of a multi-channel merchandising strategy, the so-called pure-plays that began the Internet retailing revolution have largely remained one-trick ponies. Most still get all of their sales from the only channel they have ever known, and yet for them that appears to be a bankable strategy. Nearly a third (95) of the retail web sites ranked and profiled in the Top 300 Guide are those of pure-plays, and as a group, their combined sales grew last year by 36%, faster than any other type of web merchant in the survey and seven percentage points faster than last year’s overall growth rate for Internet retailing.
They are often overlooked because of the high-profile dot-com bankruptcies of a few years ago and because few have yet to become big-time merchants. The leader of the group-Amazon-is the largest and most highly regarded e-retailer in America, but one must scroll down to the #24 spot in the Top 300 ranking before encountering another pure-play-BUY.com.
Nonetheless, the pure-plays have successfully established leadership positions on the web in certain product categories, such as videos, jewelry, drugs and cameras. The largest movie rental operator on the net is pure-play Netflix Inc., which ranks #30 in the Top 300. Meanwhile, Blockbuster Inc., the 40th largest retail chain in the U.S. with a dominant position in offline movie rentals, is not even ranked among the Top 300 web merchants. Virtual diamond merchant Blue Nile Inc., which grew 79% last year and is going public this year, is the largest jewelry merchant on the web with the 54th largest site. By comparison, Zale Corp., the nation’s largest jewelry chain, is only the 199th largest e-retailer, although Tiffany & Co., the second largest store-based jeweler, managed a 75th place ranking in the Top 300 Guide. Similarly Drugstore.com Inc., the leading web-based drugstore, sells 56% more merchandise online than Walgreen Co., the nation’s largest pharmacy and 11th largest retail chain. And when it comes to selling cameras online, the category leader is pure play RitzInteractive.com, the only camera web store ranked in the Guide.