The acquisition will add more than 300 products to L’Oreal’s lineup.
The Top 500 retail web sites didn`t achieve their stature on their own. Here are the leading vendors to the biggest retailers.
The online retailers ranked in Internet Retailer’s Top 500 Guide rang up combined sales of $68.9 billion in 2005. They also built and maintained e-commerce sites that attracted more than 1.42 billion visitors per month last year.
Such significant numbers are a testament to the talent and resources that Top 500 merchants are committing to online retailing, the fastest growing segment of the U.S. retailing industry. But most Top 500 retailers didn’t build, and don’t maintain, their e-commerce sites entirely on their own. To sustain their substantial web retailing operation, the Top 500 e-retailers use applications and services provided by more than 200 vendors in 16 categories. For example, 49% of all Top 500 retailers use an e-commerce platform provided by a third-party application developer and 55% use an outside agency to manage their affiliate marketing program.
Third-party software and hardware developers and service providers make up an important component of the success of the Top 500 by supplying merchants with the products and services that keep total web retail sales growing by about 25% each year. Following is a special report on the biggest suppliers of e-commerce applications and services to the Top 500 retailers broken out by category.
Designer web sites
Though site design is mostly an inside job, there are Top 500 retailers who need outside help with a new launch or complex redesign. Take the case of Fry Inc. which has designed or redesigned the web sites of 14 Top 500 retailers such as Spiegel Brands Inc. (No. 51) and Home Décor Products Inc. (No. 107). Demand for new features and upgrades is driving up the need for experts, says president David Fry. As a result, Fry has expanded its staff by 35% in the past year and now has 215 employees. Following Fry the next most utilized web site design firms among Top 500 retailers are GSI Commerce Inc. and MarketLive Inc., each with six clients.
Top 500 retailers, especially the big box merchants with complex e-commerce sites that support multiple channels, depend on web hosting services for uninterrupted performance. As part of the third-party and turnkey services it provides to chain retailers and consumer brand manufacturers, GSI Commerce Inc. performs web hosting for 14 Top 500 retailers, including Linens ‘n Things Inc. (No. 115) and Ralph Lauren Media LLC (No. 101). Many Top 500 retailers prefer to delegate the crucial job of web hosting to established companies with deep roots in e-commerce and telecommunications. Yahoo Inc., AT&T; Inc. and Savvis Inc. also provide Top 500 merchants with web hosting. Yahoo has a client list of 14 Top 500 retailers, while AT&T; and Savvis have 11 each.
An e-commerce platform is the engine that powers a web retailing site and the core system that Top 500 retailers use to connect to other shopping channels and back-end programs. In particular, 50 Top 500 retailers use the Microsoft Commerce Server e-commerce platform or .NET, Microsoft’s web services architecture, to drive and support their e-commerce sites. Direct marketer Redcats USA (No. 28) earlier this year rolled out a new e-commerce platform powered by .NET. The new platform hosts 12 web stores that receive about 40 million page views per day. Following Microsoft, the e-commerce platform providers most utilized by Top 500 merchants are GSI Commerce and Art Technology Group Inc, with 26 and 22 retailers, respectively.
Site Search Software
Web shoppers want speedy site search and Top 500 retailers are responding with better tools such as guided navigation. A total of 55 retailers now use site search applications from Endeca Technologies Inc., while another 22 utilize search tools from EasyAsk Inc. Top 500 retailer West Marine Inc. (No. 240) recently added Endeca site search that gives customers additional ways to shop the boating supply retailer’s online inventory of more than 150,000 products. Customers can now shop for specific products more quickly and sort through the results by brand, price, sale items, new items and most popular products. “We wanted more precise search results,” says Tony Gasparich, vice president of direct sales. With better internal search, West Marine is also expanding its multi-channel retail efforts with a buy-online/pickup-in-store program. “We are expanding our commitment to the web,” Gasparich says. “A new internal search engine will help customers find what’s available in our inventory much quicker than before.”
Content Management System
Content is king on any web site, but when the URL is a Top 500 web site the content must be written, displayed and managed in ways that turn casual shoppers into motivated buyers. Most Top 500 web retailers do their own content management internally, but Interwoven Inc. is the most utilized application developer in the Top 500 Guide with 10 clients, including Staples Inc. (No. 3), Quixtar Inc. (No. 20) and Avon Products Inc. (No. 25). The next most utilized vendors are GSI Commerce and Scene7 Inc., each with eight Top 500 retailers. Top 500 retailers using Scene7 include The Home Depot Inc. (No. 41) and Limited Brands Inc. (No. 43).
Top 500 retailers use outside companies to help manage their fulfillment programs in a variety of ways. Some retailers choose a third-party service to manage their picking, packing and shipping operations. But others depend on outside companies such as Ecometry Corp. (now Escalate Retail), with 18 Top 500 retailers, GSI Commerce with 15 merchants and Accretive Commerce (formerly NewRoads Inc.) with 7, to help manage their overall order processing and warehousing programs. By using web-enabled technology from Accretive that integrates its returns system with other applications, including order management and fulfillment, Children’s Wear Digest Inc. (No. 374) reduced returns in some merchandising categories by as much as 50%. “We’ve tried to nip returns in the bud,” says CWD president James Klaus.