12/04/13

Computers/Electronics

Excelling in a tough category.

Internet Retailer

Even though nearly 10% of all computers and electronics sales occur online, online retailers of such products are challenged when it comes to growing sales and market share. They compete in a category that is low on growth and many of them sell the same products as their competitors, which often gives the lowest-priced seller the edge.

The conversion rate for the 45 computers and electronics e-retailers ranked in the Internet Retailer 2013 Top 500 Guide shows that consumers shop around. The average conversion rate for the category is 2.1%, much less than the average 3.2% for all Top 500 merchants. Sales for these same merchants grew just 1.8% between 2011 and 2012, ranking the category dead last for sales growth.

But the five computers and electronics merchants selected for the Hot 100 this year are different. Their collective sales grew 34% over the last year, and their average conversion rate is 2.8%, 33% greater than the category Top 500 Guide average.

These companies sell in a variety of ways, but they're all staying in close touch with the rapidly evolving demands of technology shoppers. Sony Electronics Inc. and Xiaomi Inc., a Chinese mobile electronics seller, each host community pages where they interact with consumers. Product managers at Xiaomi, for example, spend several hours per day on its online forum, while also combing out suggestions they can apply to future products.

Furthermore, these companies deftly adapt to changes in online retailing. For example, Newegg Inc. opened a flash-sale site this year to meet the expectations of consumers seeking discounts, while RadioShack.com developed a do-it-yourself channel that encourages consumers to show off their know-how while concurrently burnishing RadioShack Corp.'s reputation as a source for gadgetry.

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