Second 500 retailers outgrew their larger rivals in the Top 500 Guide.
The up-and-comers in online retailing have come a long way in the three years since Internet Retailer began collecting and analyzing their annual web sales. The web merchants ranked in the Second 500 Guides have nearly doubled their collective online sales from $2.12 billion in 2009 to $4.13 billion in 2012.
In fact, the Second 500 merchants have grown faster than those in the Top 500, excluding Amazon, for the third year in a row, according to the new Internet Retailer Second 500 Guide, which ranks the retailers Nos. 501 to 1000 in North American web sales. In 2012, Second 500 merchants’ 15.60% collective sales growth, from around $3.57 billion in 2011 to $4.13 billion in 2012, outpaced the 14.16% growth rate in 2012 of Top 500 retailers, excluding Amazon. Those merchants’ sales increased from $135.85 billion to $155.08 billion.
This growth has occurred despite the fact that Amazon has been growing online market share at a breakneck pace. In 2012, Amazon took in $34.8 billion in North American sales, or around 15.4% of total U.S. e-commerce sales of $225.5 billion, compared with $12.8 billion, or only 9.5% of the total, $134.4 billion, in 2009.
The Second 500 Guide, now in its third year, suggests that, despite Amazon’s dominance, many online shoppers are eager to shop with merchants that offer them something different. Second 500 retailers stand out from their larger competitors in several ways: by offering a unique product mix and becoming experts in that niche, displaying meaningful and interesting content on their e-commerce sites, or using social media and superior customer service to build the kind of personal connection with shoppers that's difficult for larger companies like Amazon to establish.
In 2013 the list of fast-growing Second 500 retailers includes Real Real Inc. (No. 554), a web-only retailer of Gucci, Armani and other luxury items sold on consignment; Diamond Candles (No. 629), which stuffs a prize in each product that can be worth up to $5,000; and Joyus (No. 799) which built its e-commerce site on shoppable video. These merchants grew sales 1004%, 650% and 190%, respectively, last year.
Second 500 merchants’ strategies are having an impact on shoppers, as the data shows that since the first edition of the Second 500 Guide in 2011, which ranked retailers on their 2010 online sales, the up-and-comers have also accomplished the following:
While growing traffic and convincing consumers to increase their spending, Second 500 merchants have also made substantial leaps in key areas of online retailing such as mobile commerce and social media marketing—489 merchants are now on Facebook, a 23% increase from 398; 463 are on Twitter, up 31% from 353; and 372 are on YouTube, up 389% from 76 in our first edition.
Newer social networks are also becoming a popular outlet for Second 500 retailers aiming to connect with shoppers in new ways—321 Second 500 merchants now on Google+ have racked up more than 1.1 million +1s (the equivalent of Facebook’s Like on the Google+ social network, which launched in 2011), and the 232 e-retailers on Pinterest have 6.4 million followers.
More than 35% of e-retailers in this guide have a mobile-optimized site, up from 27% last year, and 11% have a mobile app, an increase from 9% last year.
The 2013 Second 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 Second 500 Guide is available here.