| Analysis of Spending Growth Among Top 25 Online Retail Sites Nov. 1-29, 2010 vs. Corresponding Days in 2009 Total U.S. – Home/Work/University Locations Source: comScore, Inc. |
|||
| Spending Growth | Dollar Share | ||
| 2009 | 2010 | ||
| Total Retail | 13% | 100.0% | 100.0% |
| Top 25 Retailers | 20% | 63.6% | 67.8% |
| Small and Mid-Tail Retailers | 0% | 36.4% | 32.2% |
Amazon.com (NASDAQ: AMZN), Wal-Mart (NYSE: WMT), Target (NYSE: TGT), and Best Buy (NYSE: BBY) may be in the midst of their best online sales year in history. It has come at the expense of companies with more modest e-commerce revenue. It appears that outside the Top 25 Online retailers, there has been no sales growth at all. Among the giants, sales are up 20% for the November 1 to November 29 period.
“The top 25 retailers have gained 4.2 points of market share to a level of 67.8 percent since the 2009 holiday season,” comScore reports. The research firm suspects that the financial resources of the largest e-commerce companies allows them to offer sharper discounts and free shipping. That may compress their margins, but it drives growth in revenue.
The problem for retailers outside the Top 25 is that they may also have decided to sharply cut prices and offer services like free shipping. They will suffer from a combination of both flat sales and lower margins if that is true. The magic of e-commerce is supposed to be that it allow retailers to reach customers without the costs of brick-and-mortar stores with expensive employees. That magic may turn out not to exist.
Chart: comScore
Douglas A. McIntyre
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
