The acquisition will add more than 300 products to L’Oreal’s lineup.
When it comes to online sales growth among major retailers over the past decade the winner is not Amazon. In fact, it’s a retailer that operates a lot of bricks-and-mortar stores and yet managed to grow web sales by 65% a year over the last 10 years, according to the 2013 Internet Retailer Top 500 Guide.
There’s been lots of change and a big variation in the performance of the original Top 300 merchants Internet Retailer first ranked a decade ago. But of the Top 300, 146 are still ranked in Internet Retailer’s 2013 Top 500 Guide and 10th anniversary edition.
Among all those merchants in the Top 300 a decade ago that are in the Top 500 today, apparel chain retailer Urban Outfitters Inc., No. 48 in the 2013 Top 500 Guide, had the best 10-year compound annual growth rate, 65.2%, followed by licensed sports apparel chain retailer Fanatics Inc. (No. 43) at 62.3% and apparel chain retailer Ann Inc. (No. 88) at 56.4%. The Top 300 merchants with declining compound annual growth rates are ShopPBS.com (No. 499) at a negative 9.3%, Franklin Covey Products (No. 423) at minus 3.4% and RadioShack Corp. (No. 296) at negative 2.7%.
Among all the retailers that have held spots in the Internet Retailer rankings over the past decade, chain retailer Urban Outfitters also showed the biggest jump in web sales—more than 9000% to $663.3 million in 2012 from about $7.3 million in 2003. Among web-only merchants, FragranceNet.com had the biggest 10-year gain in sales to $145.0 million last year from $10.5 million in 2003, while the fastest-growing catalog/call center company was 1-800 Contacts Inc. (No. 78), which over the course of a decade grew web sales about 1880% from $19.8 million to $392.0 million. Driven by the explosive growth in digital music sales from iTunes, launched in 2001, and the online sales of such innovative products as iPods, iPhones and iPads, the biggest of the fastest-growing consumer brand manufacturers was Apple Inc. Over the course of a decade e-commerce sales for Apple (No. 3) grew 2078% to $8.83 billion in 2012 from $405.5 million in 2003.
But not every retailer made smart choices when faced with the rapid changes in e-retailing over the past decade. Many well-known retail brands that at one time made the Top 500 rankings have since gone bankrupt, were sold to someone else or went out of business for other reasons. A prime example is Circuit City Stores Inc., which reached a milestone of $1 billion in web sales in 2007 and was bankrupt by 2009, the victim of a flawed discount pricing strategy and stiff competition from Best Buy Inc., Amazon and others.
Other former Top 500 merchants such as Lillian Vernon Corp. and Red Envelope Inc. went out of business, were acquired or saw their original primary e-commerce assets sold off at auction because they couldn’t build an e-commerce operation strong enough to survive the long haul, says Jim Okamura, managing partner of retail consultancy Okamura Consulting. Lillian Vernon, which once generated e-commerce sales of about $80 million, was sold at a bankruptcy auction for about $16 million to home décor retailer Current USA in 2008. That same year the assets of RedEnvelope.com, which in 2006 posted e-commerce sales of about $90 million, were acquired by Provide Commerce, now part of Liberty Interactive Corp. (No. 5), for about $6 million.
Lillian Vernon and RedEnvelope.com didn’t survive in their original form because they weren’t successful in building a lasting relationship with online shoppers or in providing the kind of unique web shopping experience that would keep consumers coming back, Okamura says. “A lot of online retailers that aren’t around anymore may have had a good run for a while, but in the end the value proposition they offered shoppers just wasn’t good enough,” he says. “They had their run and that was it.”
Today the Top 500 retailers growing the fastest are the merchants that are flexible and willing to embrace change, especially new developments in mobile commerce and social media, Okamura says. “Mobile and social might be real game changers,” he says. “The Top 500 retailers growing the most consistently over the next 10 years of online retailing will be the merchants really mastering these two channels.”
More on Top 500 retailers, 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 new 2013 Top 500 Guide is available here.