The retailers ranked in the 2019 Internet Retailer Top 500 increased their online sales by 17.6% in 2018 over 2017—which just happens to be the Top 500’s compound annual growth rate for the past five years. If that growth rate continues, North America’s leading online retailers will double their web sales again in the next four years, highlighting how ecommerce keeps reshaping the business of retailing.
Amazon.com Inc., No. 1 in the Top 500, grew its global online sales by 20.0%, according to Top 500 data, which includes Amazon’s first-party sales of merchandise it owns and an estimate of the commissions Amazon earns from third-party sales on its marketplaces. Amazon accounted for 30.6% of Top 500 global online sales and brought up the overall Top 500 growth rate by a percentage point—without Amazon, the Top 500’s collective online growth for 2018 was 16.6% over the prior year.
The 100 leaders in online sales in the Top 500 accounted for 86.2% of total Top 500 global web sales, a slight increase from 85.9% last year. Taking out Amazon, the next 99 leading e-retailers captured 55.6% of Top 500 sales, down slightly from 55.9% in last year’s ranking. That is one more sign of Amazon’s growing strength, internationally as well as in North America.
Despite dominating online sales, the Top 100 didn’t dominate growth. While the 100 largest online retailers by North American web sales grew by 18.0% (17.0% without Amazon), there was plenty of growth among smaller companies. In fact, the fastest-growing group of 100 within the Top 500 were the smallest retailers as measured by web sales, those ranked Nos. 401-500. That cohort collectively increased their web sales by 24.3%.
Six of the 10 fastest-growing Top 500 retailers are ranked below 400 in the Top 500, and five of these fastest growers are digitally native, vertically integrated brands that design their own merchandise and sell primarily, if not exclusively, online.
Such born-on-the web brands, sometimes called DNVBs, make up 31 of the 2019 Top 500 retailers based on 2018 online sales. And they continue to out-perform their competitors, growing collectively by 29.5% online in 2018 over 2017. 11 new DNVBs made the Top 500 for the first time this year, but they’re not rank beginners: Almost all of them had been ranked previously in Internet Retailer’s Top 1000, which includes more midsized firms.
However, many DNVBs are less than a decade old. The median online launch year for these digital natives is 2013, versus 1999 for the Top 500 as a whole. These digitally native brands are making headway in a variety of categories, including Casper (No. 132 in the Top 500) in mattresses, Dollar Shave Club (No. 160) in razor blades, Warby Parker (No. 174) in eyeglasses, Glossier Inc. (No. 404) in cosmetics and Allbirds (No. 426) in shoes.
Their rapid growth shows there remains room in online retailing for innovative newcomers, despite the big growth by giants like Amazon and Walmart Inc. (No. 3), which increased its web sales by 38.8% worldwide in 2018.
The newly published 139-page 2019 Internet Retailer Top 500 report also provides analysis of the rapid growth in online grocery sales, the moves by major retailers to expand their online selection and offer more free shipping and the growing political pressure on Amazon.
Here is a summary of what else is contained in the 2019 Internet Retailer Top 500 report:
- More than 50 charts and tables that quantify the shifts in online retailing.
- An analysis of ecommerce versus total retail growth over the past decade.
- Data on which retailers and brands are growing the fastest and slowest, broken down by merchant type, merchandise category and size.
- In-depth looks at the ecommerce performance of web-only retailers, retail chains, consumer brands manufacturers and retailers with roots in print catalogs and TV shopping shows.
- A report on Amazon’s recent initiatives and the response of competitors and government regulators.
- Data from consumer surveys on how they shop online, their view of Amazon, how they view in-store pickup, their propensity to return online orders and more.
- Benchmarks giving industry averages for such key metrics as conversion rate and average order value by merchant type and merchandise category, free shipping policies, loyalty programs, website activity and features, digital marketing programs, shopper demographics and more.
- A look at the boom in retail warehouse automation in response to consumer demand for fast and low-cost shipping.
The Top 500 Online Database is available in three membership tiers: Basic, Basic Plus and a more inclusive Pro version for corporate clients wanting multiple user licenses, more extensive data and data download capabilities. Learn more about what’s included in each Top 500 Online Database tier.