57.5% of all shoppers use the omnichannel service, but only 31.6% describe it as being a smooth process, according to a new report.
Internet Retailer releases its 10th anniversary Top 500 Guide.
It’s been a decade since Internet Retailer first ranked the largest web retailers in North America on their annual online sales. A decade ago the top ranked e-retailer in the Top 300—Amazon.com—only had annual web sales of $6.9 billion and mobile commerce and social media were only in nacent stages of development.
But times change—and so have the web merchants ranked in the 2013 Internet Retailer Top 500. Today, e-commerce remains the retail industry’s fastest-growing channel and a primary sales driver. In 2012, the combined sales of the Top 500 grew year over year 17.5% to $216.17 billion from $183.93 billion, while total e-commerce as measured by the U.S. Department of Commerce increased about 15.8% to $225.5 billion last year from $194.7 billion in the prior year. Total retail sales grew only about 4.0% to $3.09 trillion in 2012 from $2.97 trillion in 2011.
In comparison in 2003, the combined online sales of the biggest U.S, web merchants ranked in Internet Retailer’s inaugural Top 300 Guide totaled $38.92 billion, which at the time accounted for 66.8% of all U.S. e-commerce sales as measured by the U.S. Department of Commerce of $58.23 billion and just about 2% of total retail sales of $2.27 trillion.
The combined 2012 web sales of the top 10 retailers—Amazon.com ($61.09 billion), Staples Inc. ($10.30 billion), Apple ($8.83 billion), Walmart.com ($7.70 billion), Liberty Interactive Corp. ($4.30 billion), Sears Holdings Corp. ($4.20 billion), Office Depot Inc. ($4.06 billion), Dell Inc. ($3.90 billion), Netflix Inc. ($3.61 billion) and Best Buy Co. ($3.35 billion) amounted to $111.34 billion and accounted for 51.5% of all Top 500 sales; the collective sales of the top 100 totaled $187.07 billion, or 86.5% of the total web sales of merchants ranked in the Top 500.
But for Top 500 merchants of all sizes, innovation is the watchword for retailers seeking to ride the e-commerce growth wave. And that’s true whether they are perennial Top 500 merchants such as Amazon.com Inc. (No. 1), FragranceNet.com Inc., (No. 153), Oriental Trading Co. Inc. (No. 86), and Fanatics Inc. (No. 43), or fast-track newcomers such as Groupon Inc. (No. 65). Groupon is the fastest-growing web merchant ranked in the 2013 Top 500 Guide with sales that increased nearly 2100% to $454.7 million in 2012 from $20.8 million in 2011. Their growth strategies include diversifying their e-commerce operations with new merchandise and product categories and digging even deeper into the details of web analytics, web site traffic logs and other data to gain nuggets that will lead to better understanding customer behavior and surpassing their expectations.
Building up its niche e-commerce base long has been a top priority for Fanatics Inc., which grew web sales 45.5% to $764 million in 2012 from $525 million in 2011. The 2012 web sales include about $100 million in revenue from Dreams Inc., a competing licensed sports apparel web merchant Fanatics acquired for $183 million in June 2012. That acquisition helped Fanatics grew at about 65% a year over the past decade, the second-best compound annual growth rate among Top 500 retail chains, behind Urban Outfitters.
Fanatics began operating an e-commerce site from the back of its single store in Jacksonville, FL, in 1993, fulfilling web orders from inventory on its store shelves and then dropping off packages for shipping at a nearby United Parcel Service location. Its light-bulb moment came when company executives realized they could use the Internet to sell caps and jerseys to displaced sports fans—such as a diehard Boston Red Sox supporter now living in Chicago. “Our first innovation was identifying a niche nobody else had, and that was serving the displaced fan who wanted to use the web to buy licensed gear for their team they couldn’t find anywhere else,” says Fanatics president Jamie Davis.
Over the course of a decade Fanatics has grown its inventory from a few thousand licensed products to more than 1 million items, including hats, shirts and related gear for more than 200 teams, Davis says. “Innovation for us means doing more for the customers that got us here and going after the local fans,” Davis says. “We don’t feel like we’ve peaked over the last 10 years. We think e-commerce is just now really getting started.”
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.