The acquisition will add more than 300 products to L’Oreal’s lineup.
Many manufacturers aren’t living up to their full web potential, say retail industry experts.
Their deep product expertise puts consumer brand manufacturers in a strong position to become major online retailers. But as a group, Top 500 consumer brand manufacturers lag behind other web merchants and aren’t living up to their full e-commerce potential, say retail industry experts.
In 2010, consumer brand manufacturers ranked in the Internet Retailer 2011 Top 500 Guide put up solid—but not spectacular—results. The combined web sales of all Top 500 consumer brand manufacturers grew year over year 12.9% to $17.5 billion from $15.5 billion. In comparison, the fastest-growing group—web-only merchants—increased their collective e-commerce sales 30.6% to about $56.89 billion last year from $43.55 billion in 2009.
In fact, consumer brand manufacturers failed to keep pace with the growth of the Top 500 last year, and accounted for only 11.6% of all Top 500 sales of $150.0 billion in 2010, down from 12.2% of 2009 Top 500 sales of $127.1 million.
“E-commerce rebounded nicely in 2010, but there are still a lot of consumer brand manufacturers sitting on the sidelines still not in the game and others that could be doing a lot more online,” says Kasey Lobaugh, retail analyst and principal with Deloitte Consulting LLP. “Lots of manufacturers aren’t doing anywhere near all they can to make e-commerce a significant revenue generator.”
Despite the fact that as a group, consumer brand manufacturers still lag behind some other Top 500 merchant segments, some manufacturers are actively embracing—and growing—e-commerce. A case in point is Ralph Lauren Media LLC (No. 70 in the 2011 Top 500 Guide), the e-commerce arm of apparel maker Polo Ralph Lauren Corp., which grew web sales 50% to $300 million in 2010 from $200 million in 2009.
Among the current Top 500 Guide’s 50 fastest-growing web retailers, six companies were consumer brand manufacturers with existing e-commerce operations: Fossil Inc. (No. 196), Ralph Lauren, Under Armour Inc. (No. 190), Tempur-Pedic International Inc. (No. 203), Burberry Ltd. (No. 400) and Jones Retail Corp. (No. 204). With web sales that grew 117.2% to $31.5 million in 2010, Columbia Sportswear Co. (No. 314) was the fastest-growing Top 500 brand manufacturer.
More information about the 2011 edition of The Top 500 Guide is available by clicking here.