Web-only e-retailers outpace other Top 500 merchants for growth
April 17, 2015 06:00 AM
The past year was another 12 months of growth for The Top 500—altogether the combined web sales of all merchants ranked in Internet Retailer’s 2015 Top 500 Guide grew 15.7% to $296.51 billion.
Once again Amazon is the top-ranked Top 500 retailer with web sales in 2014 that increased 17.1% to an Internet Retailer-estimated $79.48 billion. Amazon reported net sales of $88.98 billion in 2014, a 19.5% increase from nearly $74.45 billion in 2013. But to make a cleaner revenue comparison with other Top 500 merchants Internet Retailer backs out revenue that is not directly associated with the online sales of physical goods or digital content, such as its Amazon Web Services unit that provides web-based data storage and server capacity. Overall, Amazon accounted for 31.0% of all U.S. Top 500 sales and 26.1% of all U.S. e-commerce sales of $304.91 billion.
Breaking down Top 500 retailers by their primary sales channel, web-only merchants once again accounted for the largest number of Top 500 merchants, 193, and the most sales, $125.47 billion. They also grew their online sales the fastest at 18.1%. Without Amazon the remaining Top 500 web-only retailers grew year over year 19.8% to $45.99 billion and accounted for 15.5% of all Top 500 sales.
The 154 retail chains in the Top 500 represented the second-largest merchant segment, and they collectively grew e-commerce 16.1% to $100.38 billion. The 76 consumer brand manufacturers were up by a combined 12.3% to $40.99 billion. The Top 500 merchants with the slowest collective annual growth rate were the 77 catalog and call center companies, including such TV shopping channels as QVC and HSN, which grew year over year by 8.8% to $29.67 billion.
But even if the biggest web merchants do account for the most sales the 2015 Top 500 rankings are hardly static. Of the Top 500 merchants, 486 have a new ranking this year. That includes 335 companies that moved down, 109 online retailers that moved up (some from the Second 500) and 42 organization that made the Top 500 list for the first time. Six retailers ranked in Internet Retailer’s 2014 Second 500 such as Dollar Shave Club (No. 319) also moved into the Top 500 for the first time.
An acquisition played a big role in why The Men's Wearhouse Inc. moved up 141 spots in the rankings to No. 153 from No. 294 in the 2014 Top 500 Guide. After a volatile five-month mating dance, The Men’s Wearhouse Inc. and Jos. A. Bank Clothiers Inc. signed an agreement in March 2014 to combine the companies. Under the agreement, Men’s Wearhouse acquired all of the outstanding shares of Jos. A Bank for $1.8 billion. Prior to the merger Men’s Wearhouse had Internet Retailer-estimated web sales of $61.3 million in 2013 compared with Internet Retailer-estimated web sales of $151.3 million for Jos. A Bank.
In 2014 the combined Men’s Wearhouse and Jos.A Bank e-commerce operation generated total Internet Retailer-estimated web sales of $215.5 million, suggesting organic growth of only 1.4% from their 2013 totals. They averaged 6.9 million monthly visits to their seven web sites and 3.7 million visitors. Those seven e-commerce sites—MensWearhouse.com, JosABank.com, Mooresclothing.com, KGstores.com, Twinhill.com, Dimensions.co.uk and Alexandra.co.uk. —now offer such features as reserve online pick up in store, ship to store and order online in store from the company’s base of 1,758 stores in North Amercia. A bigger e-commerce operation also enables Men’s Wearhouse to sell online to a much bigger base of about 20 million established customers, the company says.
“We acquired Jos. A Bank business because we saw a tremendous opportunity to capture an exclusive brand that has a loyal customer and to consolidate market share with a customer that we were not able to attract to Men’s Wearhouse,” CEO Douglas Scott Ewer told Wall Street analysts on the company’s year-end earnings call in February.
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