A Boomerang Commerce analysis shows retail chains struggling to compete with Amazon on price, but smaller niche sites experience a sales surge.

Giants like Amazon.com Inc. and big retail chains selling online traditionally gobble up a big piece of the Thanksgiving weekend sales pie, but smaller online-only merchants say they’re doing just fine with the scraps.

E-retailers that offer unique products that can’t be found on other sites are seeing explosions in holiday sales growth while larger niche retail chains are struggling to compete in the era of Amazon. Specialty retail chains “will suffer this season and beyond,” according to an analysis conducted by Boomerang Commerce, a technology company for retailers and brands.

Merchants like Sur La Table, No. 245 in the Internet Retailer 2017 Top 500, and Toys R Us (No. 38) have done damage to their brands by spotlighting items online that are cheaper on Amazon (No. 1), according to Boomerang. A Nespresso coffee machine featured on SurLaTable.com’s first page of deals was priced at $173.96, 29.4% higher than the $122.84 price on Amazon. Of 18 such products available on Amazon, 10 were less expensive than Sur LaTable’s prices.

Toys R Us has had the same problem. Boomerang found 14 items that overlap with Amazon’s inventory, and 11 of those were cheaper on Amazon—including an art desk and chair that ToysRUs.com offered for $84.99, which Amazon beat with a price of $64.99.

Representatives with Sur La Table and Toys R Us could not be reached for comment.

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“Specialty [retail chains] are still getting e-commerce dead wrong, thinking that consumer price perception doesn’t matter,” says Gary Liu, Boomerang’s vice president of marketing. “You can’t differentiate from Amazon based on your store experience and staff knowledge when consumers price-compare online to decide if they even want to come into your stores. Online is where the customer journey starts and where customer perceptions get solidified, and this has a domino effect through the lifetime of that customer’s buying behavior.”

But a number of online-only retailers have bypassed that headache entirely—opting to offer items Amazon can’t get its hands on and not waging a price war they can’t win. And they are seeing some substantial perks.

Betabrand Inc., No. 585 in the Internet Retailer 2017 Top 1000 and an online-only apparel retailer that crowdfunds its designs, is having a “really strong” holiday season, chief marketing officer Aaron Magness said Sunday. Customers started shopping earlier last week instead of waiting for Black Friday, he says and roughly 60% of the merchant’s revenue came from mobile, and the mobile conversion rate is up about 21% year over year.

Gentleman’s Box, a subscription retailer that sells boxes of curated men’s fashion and lifestyle accessories, benefited from mobile shopping surges too. Black Friday traffic from mobile devices increased more than 50% this year with mobile sales soaring by more than 300%, according to Paul Chambers, co-founder and chief marketing officer. Overall, Gentleman’s Box has nearly doubled its Black Friday sales from last year, and the holiday conversion rate has been above 3.5%.

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More customers also are opting for a premium subscription box, which has a higher price point. “We believe this may be performing well as buying power is stronger this year, and there is increased economic confidence,” Chambers says. “We are extremely pleased with our sales this weekend.”

Gentleman’s Box also saw an unexpected uptick in shoppers in the 45-54 age bracket, with this group growing by 71%, Chambers says.

 

 

 

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A combination of an updated website, new marketing channels, expanded product offerings and weekend promotions are the main drivers of the company’s success in the kickoff to the season, Chambers says. Gentleman’s Box didn’t see as much traction on its email campaign as Chambers would have liked, but the company experimented with timing by sending messages later, hoping to land higher in shoppers’ inboxes. The retailer hasn’t had any site performance issues since it completed infrastructure upgrades during the summer in preparation for the busy season, and it’s functioning as expected.

Online-only coffee retailer Bean Box Inc. also has been able to handle a surge in holiday traffic. The retailer, which sources beans from Seattle-area roasters, migrated to Google Cloud Platform this year, which co-founder and CEO Matthew Berk says “has made scaling up a breeze and really helped our overall site performance.”

The company also prepared for the season by investing in key initiatives to grow its email subscriber base, streamline checkout and offer a broader array of products—moves that Berk says positioned Bean Box for growth during this pivotal period. The retailer has seen sales balloon by about 150% so far compared with Thanksgiving weekend 2016, according to Berk. The company’s conversion rate is up 5% over last year too.

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Retailers report expecting similar growth heading into Cyber Monday.

Adobe Inc., which tracks 80% of online spending at the 100 largest retail websites in the United States, anticipates a gigantic day for e-commerce Monday. The research firm predicts online sales for Cyber Monday will hit $6.6 billion and surpass record-setting Black Friday web sales of $5.03 billion, which were up 17.0% from $4.30 billion in 2016.

E-commerce platform Shopify concurs with high expectations for Cyber Monday.

“Cyber Monday sales are poised to [lead to] the biggest online shopping day of the year,” says Satish Kanwar, Shopify’s vice president of product. “Based on the mobile sales growth we saw on Black Friday, we expect mobile and desktop sales to become more evenly matched on Cyber Monday this year, despite workers being back in the office and at their computers.”

Sales likely will peak around noon and then after 9 p.m. after shoppers head home from work, Kanwar says.

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