The retailers ranked between Nos. 1001 and 2000 in web sales collectively registered 15.2% growth in 2018, faster than the 14.5% year-over-year growth in North American ecommerce. Internet Retailer’s inaugural Next 1000 report details how up-and-coming web merchants attract shoppers, typically by offering products and personalized service not available from retail giants.

Smaller companies succeed in ecommerce today by doing something the big boys don’t.

That can be creating unique merchandise, customizing products to consumers’ tastes, promoting a social cause or just by putting customers first. All those strategies are part of the story of what we’re calling the Next 1000, the North American retailers that Internet Retailer ranks Nos. 1001 to 2000 in online sales.

The innovative tactics of these Next 1000 retailers could serve as a guide for how to succeed in retail in spite of the growing dominance of Inc., No. 1 in Internet Retailer’s Top 1000. This report will highlight such examples as how Madison Reed engages shoppers with try-on tools that help them find the right cosmetics for their complexion, and how Think Crucial founder Chad Rubin has turned Amazon into a fast-growing sales channel by becoming an expert in designing high-converting Amazon product pages.

The addition of 1,000 smaller and midsized online retailers to Internet Retailer’s annual rankings enables us for the first time to provide a picture of how the Top 2000 North American retailers are faring in ecommerce.

Many of the Next 1000 set themselves apart providing consumers with healthy products, such as meal-kit provider Freshly and Califia Farms, which offers a line of plant-based foods. And many win customer loyalty with a commitment to make the world a better place, such as the two visually impaired siblings who design clothing that feels good to the touch and sell it on retail site—giving all their profits to research into curing retinal disease.

Above-market growth

Collectively, the retailers in the Next 1000 booked $12.018 billion in online sales worldwide in 2018, an increase of 15.2% from $10.431 billion in 2017. That’s higher than the 14.5% ecommerce growth in North America in 2018 over 2017. That North America figure is based on the 14.2% growth in U.S. ecommerce in 2018 reported by the U.S. Department of Commerce; the 14.7% ecommerce increase in Canada, according to Statistics Canada; and Mexico’s 10.2% online sales growth, according to Statista.


However, these Next 1000 grew more slowly than larger ecommerce rivals. Internet Retailer’s Top 1000 merchants increased online sales by 17.6%. Even without the 20.0% year-over-year growth of Inc., the No. 1 retailer in the Top 1000, the rest of North America’s Top 1000 online retailers increased their global web sales by 16.6%, nearly a percentage point higher than the growth of the Next 1000.

A look at the Top 2000

The addition of 1,000 smaller and midsized online retailers to Internet Retailer’s annual rankings enables us for the first time to provide a picture of how the Top 2000 North American retailers are faring in ecommerce. A separate section of this report will go into detail about the performance of these 2,000 companies. Overall, they grew online sales 17.7% in 2018 over 2017.

However, the median growth of the Top 2000 was only 13.0%, which means 1,000 of the ranked retailers increased their web sales by 13.0% or less in 2018. The fact that the average growth, at 17.7%, is significantly higher than the median growth suggests some of the retailers gaining market share are growing very fast, bringing up the collective growth of the Top 2000.

What’s in the Next 1000 report

The bulk of the 2019 Next 1000 Report consists of a detailed look at the Next 1000 retailers. This report includes:

  • Comparison of conversion rate and average order value for Next 1000 merchants versus larger competitors, broken down by type of retailer and merchandise category
  • An overview of funding raised by Next 1000 retailers, and an analysis of how investors today view online retail startups
  • A breakdown of how 56 digitally native brands—which outpaced overall growth of the Next 1000 by 5.3 percentage points—compared with other merchant categories in the Next 1000 and Top 1000
  • Six case studies describing how Next 1000 e-retailers succeed by setting themselves apart from larger rivals
  • An analysis of which brands are growing the fastest, and which merchandise categories are trending in terms of ecommerce sales
  • Data on marketplace participation of midsized e-retailers, including the 37.1% that sell on Amazon
  • Total website and mobile traffic of Next 1000 retailers, with comparisons to the Top 1000
  • Demographic data of consumers who shop with Next 1000 retailers—by age and household income
  • Benchmark data on how many Next 1000 retailers offer free shipping and free return shipping, by merchant type and merchandise category, as well as typical minimum-purchase thresholds for obtaining free shipping.

The 2019 Next 1000 Report is available as a downloadable PDF for $349. It’s also included in our Gold and Platinum Memberships, which provide access to all of Digital Commerce 360’s recently published reports and certain online retailer databases.