In 2015, it was very much a good news-, bad news-type scenario for the largest online retailers in North America.
In some ways it was the biggest year yet, data from the just-released Internet Retailer 2016 Top 500 Guide shows. Shoppers in the United States spent $341.7 billion on retail purchases on the web in 2015, according to the U.S. Commerce Department, up 14.6% from 2014—a rate that’s nearly five times as fast as the 3.1% growth in store sales.
When factoring out the $2.19 trillion in sales of automobiles, fuel and restaurants that the Commerce Department includes in its definition of retail sales—all goods not generally purchased online—the web comprised 10.6% of total retail sales of $3.22 trillion in 2015, up from 9.7% in 2014. E-commerce alone drove 39.3% of the $110.6 billion in total retail sales growth last year.
Moreover, the merchants ranked in the just-released Internet Retailer 2016 Top 500 Guide—the largest e-retailers in North America—are a major force behind these trends, as the Top 500 merchants’ U.S. online sales of $286.2 billion comprised 83.8% of total e-commerce sales in 2015.
Many e-retailers ranked in the Top 500 had a huge year. For example, some of the biggest chain store operators, including Target Corp., J.C. Penney Co. Inc. and Home Depot Inc., that put the web at the forefront of their business strategies last year and that invested heavily in using their stores to their advantage in fulfilling web purchases or serving as pickup points, grew 20%, 30% or more last year.
Other innovative start-ups like foam mattress maker Casper Sleep (ranked No. 290) or shaving products merchant Harry’s Grooming (No. 493) launched into Top 500 this year by posting big online sales numbers and growth rates, as they redefine entire product categories and give consumer a new way to shop for products they’ve long been accustomed to buying in stores.
Here comes the bad news: Top 500 merchants, their technology partners and other industry observers say it’s tougher than ever to grow online, and that was especially true in 2015. Amazon.com Inc. (No. 1) continues to grow market share and pressure other merchants on price, delivery times and overall ease of shopping online.
The numbers out of the Top 500 this year provide further evidence of this pressure: The Top 500 collectively grew web sales 13.5% to $331.5 billion last year—the slowest growth rate among Top 500 retailers since the recession of 2009, and the first time in the last seven years that Top 500 merchants have grown at a slower pace than the U.S. e-commerce market as a whole.
Some of this softness stems from the online sales declines of a few of the biggest chains like Staples Inc., Barnes & Noble Booksellers Inc. and Sears Holdings Corp.—all of whose e-commerce revenue fell last year. Those declines skew the numbers down slightly.
But it doesn’t explain all of it. Many merchants say it’s tougher than ever to grow online, and finding an edge is more crucial than at any other time.
This latest edition of the Top 500 Guide, now in its 13th year, strives to help online retailers do just that.
Included in the print, digital and database versions of the Top 500 Guide are the following:
- Rankings and data-filled profiles of the largest 500 online retailers in North America, including operational data on conversion rates, average order values, e-commerce executive contact names and technology vendors used
- For the first time ever, an Internet Retailer Performance Score, which rates all merchants by the success of their online strategy in comparison to their peers and the market as a whole.
- Three-year web sales figures (dollar amounts included in the database version only)
- In-depth analysis of the key trends in the market, and strategic success stories of some of the web’s most innovative retailers
- Feature story on the growing influence of online marketplaces such as Amazon, eBay, Newegg, Rakuten, Jet.com and others
- Multiple charts and graphs, including a list of the fastest-growing e-retailers, a comparison of web sales versus store sales for some of the largest chains, and rankings by product category