Second 500 newcomers skip ahead of their older rivals
May 12, 2015 02:28 PM
Many of the merchants that broke into the newly released Internet Retailer Second 500 Guide seemed to come out of nowhere, registering giant sales growth figures after only selling online a couple years. Of course, the growth is generally off a small sales base, which is why several members of this group can boast of triple-digit percentage growth.
Preppy men’s and women’s apparel retailer Country Club Prep, for example, brought in $5.5 million in sales in 2014, which earned the merchant the No. 929 ranking in the Second 500 Guide. That sales figure was up more than 200% from 2013, and it’s an annual sales number that some small retailers struggle to achieve after a decade of selling online. Country Club Prep managed to pull it off in two short years.
Two of the fastest growing merchants in the Second 500—regional department store merchant Stein Mart Inc. (No. 696) and discount jewelry retailer Charming Charlie Inc. (No. 764) —were new to selling online, but posted spectacular growth quickly after their launch. Stein Mart sold $13.0 million online last year—up 251.4% from 2013. Charming Charlie grew 700% to $10.5 million, making it the fastest-growing e-retailer in the Second 500.
Wherever they came from, the newcomers to the 2015 Second 500 Guide grew much faster than the rest of the Second 500, not to mention their larger competitors in the 2015 Top 500 Guide, and U.S. e-commerce as a whole. Collectively, the 52 e-retailers ranked in the Second 500 Guide for the first time grew online sales 32.3% to $470.3 million in 2014 from $355.5 million a year earlier. That’s more than twice as fast as the 14.4% overall growth of the Second 500, the 15.4% growth in U.S. e-commerce as measured by the Commerce Department and the 15.7% growth of the Top 500.
And though the 52 merchants represent 10% of the Second 500 in terms of the number of retailers, their nearly $115 million in year-over-year sales growth represents 15% of the total 2014 Second 500 growth of $762.9 million. As a group, the newcomers to Second 500 are much younger than their Top 500 and Second 500 peers. The median number of years the newcomers have sold online is only seven years, versus 16 years for the Top 500 and 12 for the Second 500.
They also tend to sell only online: 65% are web-only merchants. Around 13.5% each are retail chains and consumer brand manufacturers, and 8% are catalog and call center-based retailers.
15 of the Second 500 newcomers sell apparel and accessories, including lingerie e-retailer Adore Me, which has raised $12 million in capital since its founding in 2011. The merchant, ranked No. 634, grew 189.3% last year to $16.2 million.
10 of the newcomers fall in the specialty category, meaning they operate in niche non-apparel categories such as Global Sugar Art LLC (No. 836), which sells cake decorating supplies, or Quality Home Systems (No. 998), which sells intercom, audio and vacuum systems.
The 2015 Second 500 Data is available in three formats and four buying options:
- Printed Edition for $99 (Early-Bird Price)
- Digital Edition for $99 (Early-Bird Price)
- Print and Digital Bundle for $160 (20% savings)
- Online Database for $289 for a year (Receive all data metrics)