It was a less than stellar 2013 online for many Top 500 manufacturers

April 25, 2014 02:01 PM

At first glance, the 14.4% growth in 2013 web sales for the 68 consumer brand manufacturers in this year’s Internet Retailer Top 500 Guide seems relatively impressive, sitting just slightly off the 17.1% overall online sales growth rate of the Top 500 and almost twice as high as the growth rate for catalogers. But a closer look reveals that much of that growth came from Apple Inc., which booked a mammoth $18.3 billion in online sales, according to Internet Retailer estimates.

Apple, No. 3 in the 2014 Top 500 Guide, represents over half of the collective 2013 web sales of the brand manufacturers in this year’s rankings. Excluding Apple, whose popular products have made it the world’s richest company by stock market value, the other 67 manufacturers in the Top 500 this year grew by only 5.5%. And apparel brands accounted for most of that growth.

“Outside of Apple, it’s getting hard for non-apparel manufacturers to create a buzz online,” says Steve Rowen, managing director of consulting firm Retail Systems Research. Rowen says apparel is typically priced less than items in other categories, such as consumer electronics, which makes it easier to promote new fashions on social media and generate impulse buys.

Thirty-three of the 68 manufacturers in the 2014 Top 500 Guide are apparel makers, and they grew their sales by a robust 24.6% in 2013, much faster than the growth for the Top 500 as a whole. After Alex and Ani (No. 342), a custom jewelry maker whose web sales jumped almost 250% in 2013, the next 16 fastest-growing e-retailers in the consumer brand manufacturer segment were apparel manufacturers, and all increased web sales by more than Apple’s 24% growth last year.

Manufacturers selling items other than clothing didn’t fare as well. Excluding Apple again, sales for the other non-apparel manufacturers in this year’s Top 500 slipped 0.3% year over year. Much of that decline stems from the slump in PC sales offline and online, as more consumers choose tablets—which they mainly buy from Apple or retailers of Samsung products—when they buy new Internet access devices. Global PC sales declined 10% in 2013, according to research firms Gartner and IDC.

That showed up in the results of brands that sell consumer electronics—except, of course for Apple. HP Home & Home Office Store (No. 35) and Dell Inc. (No. 10) saw their collective sales shrink 8.8% in 2013, after flat or declining web sales for three straight years. Sony Electronics (No. 20) grew at a sluggish 2.9%. Rowen says manufacturers’ online TV sales suffered from increasing competition from low-priced brands, and the tendency for shoppers to do research on a computer manufacturer’s site before ultimately picking the cheapest place to buy one.

There was no comparable headwind for apparel manufacturers in 2013. In fact, those that sell cold-weather gear benefited from the unusually harsh winter in much of the U.S. Among those to see chilly temperatures heat up sales was outerwear brand The North Face, which is operated by VF Corp. (No. 110). But it wasn’t just cold weather that helped North Face boost its web site conversion rate by 10% last year, says director of e-commerce Cal Bouchard. The brand also simplified the design of by creating product “lanes” (like “Jackets and Vests”) under category drop-downs, allowing shoppers to find what they’re looking for with fewer clicks.

North Face also improved its tablet site, making checkout and category pages more finger-friendly by putting important buttons above the fold. Mobile sales, including tablets, make up about 40% of North Face’s online sales, and tablet users represent 30% of the brand’s mobile traffic, Bouchard says.

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