The big e-retailers are getting bigger

June 10, 2010 06:33 PM

The 500 e-retailers in the Internet Retailer Top 500 Guide accounted for 93.7% of all web sales in 2009, Kurt Peters, editor-in-chief of Internet Retailer, said today at the Internet Retailer Conference & Exhibition during a featured address.

But perhaps more astonishing is that the top 100 of those merchants control 80.7% of all web sales.

While the big players have long been dominant, their dominance is growing. In 2008 the Top 500 accounted for 87.9% and the Top 100, 74.5%.

Peters also noted other findings, including:

  • Consumers are not channel agnostic—web only merchants in the Top 500 were the fastest growing segment, growing sales 20% last year compared to 9% for the Top 500 as a whole and 7% for retail chains.
  • Consumers shifted their shopping to the web: at 26 of the 50 largest chains, web sales grew while comparison store sales fell. And for 11 others, the web grew faster than, or did not fall as much as, comparison store sales.
  • Web only retailers in the Top 500 grew their sales by 20%, compared with retail chains, which grew 7%, consumer brand manufacturers, which grew 4% and catalogs and call centers, which fell 3%.

“These trends can be boiled down to two words,” Peters said. “Greater competition.”

The big guys prepping to get their share of the shift to the web will force all merchants to offer better web sites, more compelling online experiences and a stronger value proposition, Peters said.  “And when I say better, I mean better not only than what you are offering now, but better than anyone else online,” he added.

Larry Freed, CEO of ForeSee results, followed Peters with an analysis of the satisfaction consumers found with the top 100 retailers in the Top 500. The top 100 had an overall satisfaction score of 78, up five points from a year earlier. ForeSee polled 23,000 consumers who had shopped at the 100 merchants.

Satisfaction is an important metric to measure because it drives conversion, retention and loyalty, which drive financial success, Freed said. “Consumers go where they are satisfied,” he said.

The top performers this year were Netflix and Amazon, with scores of 87 and 86. Apple and Barnes and Noble made some of the biggest improvements, Freed added.

When it came to intentions of visitors to sites, Freed said 49% came to research, 39% to buy and 12% for other reasons. Additionally, among highly satisfied visitors—those who reported a satisfaction score of 80 or more—72% were more likely to recommend the brand, 55% were more likely to return to the site and 66% said they were more committed to the brand.




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