In its second-largest acquisition, Amazon buys the company for $970 million.
Excluding Amazon, online-only retailers are growing at about the same rate as their competitors.
Cooking.com Inc. has a product edge. It sells a specialized assortment of kitchen tools and cooking equipment that helps insulate the web-only merchant against competition from larger retailers that sell less expensive lookalike products at discounted prices.
Product mix has been one of the key factors in Cooking.com’s success since launching in 1998, says founder Tracy Randall. “Our sales growth has come from two sources: first, a real focus on bringing in exclusive, unique merchandise. We moved away from commodity products to differentiate ourselves. Second, we have evolved from running our core cooking site to managing e-commerce sites for other brands.”
Selling niche products, combined with technology expertise that it employs to manage other retailers’ web sites, helped keep Cooking.com (No. 220) in the Top 500 Guide for the past 10 years. The web-only retailer has grown revenue an estimated 168.77% in the last decade, or an average of 11.61% per year.
While that would be impressive in many industries, in e-commerce it’s behind the average growth of Top 500 retailers. In fact, while many believe web-only retailers are growing faster than other retailers online, without a decade of growth by Amazon.com Inc., No. 1 in the Internet Retailer Top 500 Guide, web-only retailers’ web sales are growing at much the same rate as those of chain retailers, catalog/call center merchants and consumer brand manufacturers.
An analysis of data published in the new 2013 Top 500 Guide that compares retailers ranked in all of the past 10 years shows that web-only merchants’ annual growth rate over the decade is 15.6%—without Amazon. That’s only good for third place in the Top 500 merchants’ pack, behind catalogers, which grew at an average of 17.0% per year, and retail chains at 16.7%. Consumer brand manufacturers were fourth with a 14.7% average annual growth rate over the past 10 years.
To keep up with the competition, web-only retailers must continue exploiting their marketplace advantages, says Bernardine Wu, CEO of FitForCommerce, an e-commerce consulting firm. “The pure-plays still have the advantage of focusing all their efforts and investment budget on the online channel, but the competition for traffic is getting fiercer,” Wu says. “The multichannel sellers with brick-and-mortar stores are picking up steam because they are starting to conquer cross-channel selling, with tools such as buy-online-pick-up-in-store.”
For Cooking.com, which was acquired by Target Inc. (No. 18) in March, its edge in technology development when applied to such e-commerce sites as Food Network Store and Emeril Store, has led to additional product sales, Randall says.
When well-known chef Emeril Lagasse mentioned a new cutlery set on his cooking show several years ago, many viewers were in a buying mood. Cooking.com was able to locate the manufacturer and post the cooking set on its web site in time to ride the wave of consumer demand, Randall says. “It was the middle of March and we had December-like sales.”
More on these and other metrics and analysis is contained in The 2013 Top 500 Guide.
The 2013 Top 500 Guide is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order the brand-new 2013 Top 500 Guide is available here.