May 4, 2011, 11:45 AM

Top 500 chain retailers look after the (web) store

It was the web—not stores—that drove growth for many chain retailers in 2010.

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After a dismal 2009 at bricks-and-mortar stores, many retail chains reported improved comparable-store sales in 2010. But web sales grew much faster for many of the biggest chains ranked in the 2011 Internet Retailer Top 500 Guide and now account for a significantly larger part of their total sales.

Consider these facts:

  • Total web sales for all Top 500 chain retailers grew to $55.32 billion in 2010, an increase of 11.3% from sales of $49.68 billion in 2009.
  • At 42 of 65, or 64.6%, of leading department store, specialty apparel, general merchandise and other chain retailers, the growth online in 2010 exceeded the increase in annual comparable-store sales. That compares with 37 of 65 (57%) Top 500 retail chains in 2009.
  • The web accounted for more than 30% of all sales at four big chains—Staples Inc., No. 2 in the Internet Retailer Top 500 Guide, Office Depot Inc. (No. 5), Williams-Sonoma Inc. (No. 25) and dELiA*s Inc. (No. 175). Six other chains—including Saks Fifth Avenue (No. 38), Urban Outfitters Inc. (No. 48), American Eagle Outfitters Inc. (No. 57), Recreational Equipment Inc. (No. 62), Coldwater Creek Inc. (No. 93) and The Talbots Inc. (No. 112)—reported that e-commerce generated more than 10% of all sales last year.
  • E-commerce paid big dividends for Toys ‘R’ Us Inc. (No. 29) in 2010. Web sales increased 29.9% to $782 million last year from $602 million in 2009, while total sales grew only 2.2% year over year to $13.86 billion. Internet Retailer calculates the web accounted for 5.6% of total sales in 2010, and generated 60% of growth across all channels.

E-commerce continues to outperform same-store sales at many chains because shoppers increasingly are researching products online, and then in many cases taking advantage of the speed and convenience of online retailing to complete a transaction, says Jim Okamura, managing director of Chicago retailing consulting firm Okamura Consulting.

“The chains are getting better at enhancing the user experience on their e-commerce sites and that’s accounting for more sales shifting from the stores to the web,” says Okamura. “Consumers know they can research product availability and price online and then go to the store, but once they are on a chain retailer’s site they’re choosing to complete their purchase online.”

More information about the 2011 edition of The Top 500 Guide is available by clicking here.

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