While Amazon.com Inc. easily retained its No. 1 spot in the Top 1000, according to the newly released 2023 Digital Commerce 360 Top 1000 report, it lost market share from 2020 to 2022 to Retail Chains that operate physical stores and Consumer Brand Manufacturers. Nor was it only big retailers that gained from consumers buying online rather than in brick-and-mortar stores. After the first year of the pandemic, retailers ranked Nos. 501-1000 outpaced the growth of the 500 leading retailers by web sales.

Top 1000 sales

Global online sales of the Top 1000, the leading North America-based retailers by ecommerce sales, had been growing by 17.7% annually in the five years leading up to the pandemic. If that had continued, Top 1000 sales would have totaled $947 billion in 2022. Instead, the Top 1000 generated online sales last year of $1.022 trillion. That means the COVID-19 outbreak put an extra $75 billion into the bank accounts of Top 1000 retailers from 2020-2022.

2023 Top 1000 Report

Analysis of North America’s leading 1,000 online retailers. Includes over 200 charts, rankings by 2022 web sales, benchmarking data, growth analyses by category and merchant type, and a detailed analysis of post-pandemic ecommerce. 

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And that growth helped make 2022 the second year in a row when Top 1000 online sales topped $1 trillion. It marked the end of a three-year period when Top 1000 sales grew at a compound annual rate of 20.7%. That’s three percentage points higher than the typical pre-pandemic rate. The cumulative three-year stacked growth rate for the Top 1000 was 75.9%.

Retail Chains and Consumer Brand Manufacturers grew the fastest. Direct Marketers, retailers that sell through printed catalogs or TV shopping shows, grew the slowest. Web Only retailers’ growth rate of 19.7% trailed the Top 1000 average of 20.7%. Amazon grew at 20.3% and the other 427 Web Only retailers in the Top 1000 by only 17.9%.

Retail Chains made the biggest gains. They increased their share of Top 1000 sales to 34.3% in 2022 from 32.5% in 2019. The share of Web Only retailers slipped to 48.3% from 49.6%. Amazon, which represents more than three-fourths of the sales of the Web Only retailers, declined to 36.5% of Top 1000 sales in 2022 from 36.9% in 2019. The share of the 427 other Web Only retailers fell more sharply, to 11.8% in 2022 from 12.7% three years earlier.

That growth could not be sustained once the pandemic and its restrictions eased and consumers returned to stores. And it wasn’t. In 2022, the Top 1000 collectively increased online sales by only 5.1%, marking the first year since the deep 2008-2009 recession that Top 1000 percentage growth fell into single digits. Consumer Brand Manufacturers posted the sharpest growth in 2022 at 8.3% followed by Retail Chains at 5.7%.

Growth distribution

Online retail, like retail overall, is quite concentrated in North America. But the pandemic did not significantly increase that concentration. And smaller online retailers continue to grow, despite the massive market share and reach of giants like Amazon, Walmart Inc. (No. 2 in the Top 1000) and Apple Inc. (No. 3).

In 2022, the retailers ranked Nos. 501-1000 in the Top 1000 grew by 6.1% and those ranked Nos. 1001-2000 in the Digital Commerce 360 database by 5.9%. Both groups outpaced the Top 500 growth of 5.1%.

That was no fluke. The same was true in 2021: The Top 500 grew more slowly than the retailers in the Second 500 and Next 1000.

North America ecommerce penetration

Online retail sales grew much faster than total retail sales during the pandemic, significantly increasing the ecommerce penetration of retail in the United States, Canada and Mexico.

Taking the three North American countries together, ecommerce grew by a compound annual growth rate of 22.0% from 2019-2022 versus 9.0% for all retail sales. The disparity was especially pronounced in Mexico, where online grew by 37.9% annually versus only 3.1% for total retail.

As a result of online growing faster than total retail, the ecommerce share of total North American retail sales rose to 18.0% in 2022 versus 12.8% in 2019. In the U.S., the market with the highest ecommerce penetration, online represented 20.9% of total retail sales in 2022 versus 15.4% in 2019.

Digital Commerce 360 excludes from its calculation of retail penetration items rarely purchased online. This includes spending at restaurants and bars and purchases of vehicles, gasoline and heating oil.

Other highlights from the 2023 Digital Commerce 360 Top 1000 report include:

• The median conversion rate for Top 1000 retailers stood at 2.8% in 2022, essentially unchanged from 2021 and up significantly from 2.2% in 2019, the last year before the pandemic.
• Average order value for Top 1000 merchants jumped to $180 in 2022 from $156 in 2021 as inflation drove up retail prices.
• Food/Beverage was the fastest-growing merchandise category over the pandemic, posting compound annual growth of 32.2% from 2019 to 2022. Health/Beauty was next at 26.1% annual growth.
• 2% of Retail Chains in the Top 1000 offered buy online, pick up in store in 2022, up from 71.3% in 2021. But the percentage offering curbside pickup fell to 44.4% in 2022 from 55.2% a year earlier.

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2023 Omnichannel Report

Analysis of omnichannel trends in today’s evolving retail world. Includes over 25 charts, data on the Top U.S. retail chains, consumer survey results on omnichannel shopping habits, and new developments in the race to fulfill online orders.

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In addition to the ongoing implications of the Wayfair decision, recent changes in tax-reporting regulations related to ecommerce are creating new tax-reporting responsibilities this year.

In June 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can require businesses without a physical presence in their state to collect and remit sales taxes. Most states now require sales tax collection among businesses doing $100,000 or more in online sales in their state. In California, New York and Texas, the threshold is $500,000.

Prior to the ruling, an online business or catalog had to collect sales tax on sales within that state and register and remit a sales tax return only if it had an in-state physical presence. If there was no physical location, there was no need to collect sales tax or file a sales-tax return.

Physical presence in a state includes brick-and-mortar locations, which includes any rented or owned property, employing remote workers (e.g., independent contractors, telecommuting employees, traveling representatives, and depending on the state, trade-show attendance), or storing property in a fulfillment center or location owned by your business, or owned and rented by someone else.

Tax-exemption certificates

Sales tax nexus is the connection between a seller and a state that requires that seller to register to collect and remit sales tax in the state. B2B companies find it challenging to understand nexus because many sell in the supply chain, either selling raw materials or selling parts that are in the manufacturing process, says Silvia Aguirre, vice president of certificate management at tax software company Avalara.

“In most states, those transactions are tax-exempt,” Aguirre says. “If the product is typically taxable, but a firm has an exemption, then a business needs to have an exemption certificate from the buyer that proves you did not need to collect sales tax.”

45 states, the District of Columbia and Puerto Rico have a sales tax.

Determining whether transactions are tax-exempt is important because the first thing tax auditors will do is check to see if there are tax transactions where no tax was charged, Aguirre says.

Noncompliance can cost companies millions of dollars. And for businesses only now realizing they are not in compliance, a liability assessment and voluntary disclosure can reduce debt liabilities, Aguirre says. For example, sellers allowing buyers to indicate they are tax-exempt on their customer account profile is one way to keep track of compliance with the law.

Online selling and marketplaces

As of January 2022, individuals, partnerships, limited liability companies and corporations that earn more than $600 through online selling must file a “Form 1099-K, Payment Card and Third-Party Network Transaction,” through which that income will be reported to the Internal Revenue Service. As more businesses sell online, the number required to file 1099-K forms will likely increase considerably in the coming years.

Before January 2022, individuals who sold goods or services through platforms like Etsy or eBay, and others that use third-party transaction networks like PayPal, only filed a tax form if they completed at least 200 transactions worth an aggregate $20,000 or more. As a result of the American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package, that $20,000 threshold dropped to $600 with no minimum transaction level.

“All of a sudden, the sellers that will need to file is going to be a very big number,” Aguirre says.

Any sales within multiple channels, including marketplaces, require further documentation.

“It doesn’t matter what you’re selling,” Aguirre says.

Now, small and midsized companies must deal with the same problems that enterprise companies face.

“In the last year, we’ve seen [businesses] grow tremendously,” Aguirre says. “Adding on the Wayfair law and the COVID-19 explosion has created a complicated process.”

When selling on marketplaces, for example, the question is, “How do B2B companies connect the dots between the customer and the marketplace, and between the marketplace and the customer’s shopping cart?” Aguirre says.

Some marketplaces take care of tax-related details, or a business can decide to file themselves.

“If you’re on your own, that’s adding more complexity,” Aguirre says. “How are you going to reconcile all the deals? Businesses want to know if they should be charging shipping in their own sales because the marketplace is not doing it. So, it becomes an economic decision for companies.”

Don’t wing it

Businesses that have been selling wholesale and shift to direct-to-consumer sales on their own web property typically use tax-management software designed to keep sellers in sync with the latest tax laws and filing requirements, says Joe Cicman, senior analyst at research and advisory company Forrester.

“If you’re a smaller business that decides to wing it on your own, then I can see mistakes happening,” he says.

When advising clients, Cicman says bringing the finance department into the planning fold early on is key to avoiding any unwelcomed surprises.

“I’ve heard some rumblings from clients about going from a traditional first-party resale to a marketplace model because those revenue streams are coded differently,” he says. “But they need to bring the finance folks in earlier into those conversations, because if you bring them in the day before you launch on a marketplace, then there is going to be a lot of agitation.”

And with manufacturers and distributors, that is a problem, Avalara’s Aguirre says. Often, manufacturers and distributors don’t understand that, when moving to ecommerce, it is necessary to consider how to digitize the documentation process. For example, it can be easy to lose track of an increase in collecting tax-exemption certificates — sometimes tenfold to twentyfold.

“Any sales within the omnichannel, including marketplaces, requires further documentation,” Aguirre says. “It doesn’t matter what you’re selling, and if you’ve offered direct-to-customer transactions, you may have accrued four years of non-compliance.”

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact senior editor Gretchen Salois at Gretchen@digitalcommerce360.com.

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The American Catalog Mailers Association, which represents retailers that sell via printed catalogs and online, is among the groups lobbying Congress to create national sales tax rules that will ease the post-Wayfair burden on online retailers. But Brian Johnson of The Vogel Group, a lobbyist for ACMA, is not optimistic that Congress will act swiftly, in part because the matter falls under the purview of the House Judiciary Committee, which does not often deal with tax issues.

“Tax issues just aren’t prevalent enough for a lot of committee members to have staff that have a deep understanding of the issue,” Johnson says. “We spend a lot of time educating around this issue, the history of the Wayfair case, and the complexities businesses are still facing.”

It doesn’t help, in Johnson’s view, that Judiciary Committee Chairman Jerrold Nadler has shown little interest in the issue, instead focusing more on issues like immigration, antitrust and allegations of misconduct by former President Donald Trump. Nadler’s office did not respond to a request for comment.

Others have shown more interest. Six members of Congress, including U.S. Rep. Andy Kim of New Jersey and U.S. Sen. Ron Wyden of Oregon, both Democrats, last fall asked the General Accounting Office to update its 2017 study on the cost of sales tax collection for online retailers. But Johnson says the GAO has not responded to that request. Nor has he seen any indication that the administration of President Joe Biden is focused on easing retailers’ sales tax burden.

For more on online sales tax, read our in-depth article, “The barely bearable burdens of online sales tax.”

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Together, the Top 1000 retailers grew 5.2% in 2022 and collectively sold $1.02 trillion in ecommerce sales last year, accounting for 77.4% of the nation’s total ecommerce sales within the U.S.   

As we move further away from 2020, the record-setting year of ecommerce, we are finally starting to see a level playing field again. Double digit growth is in the near future and now is the time to invest in future gains. This year, our 2023 North American rankings feature hundreds of companies outside of the most well-known brands that have made stunning strides in growth.  

Part of the most comprehensive data we’ve compiled to date, our expert research team surveyed retailers, studied website traffic data and analyzed key trends to identify all the significant ecommerce websites selling to North American consumers. 

Published April 2023* 

*While we formally launch new editions of each database product annually, we make necessary updates to our rankings and data throughout the year. 

ABOUT OUR DATABASES 

Whether you’re looking to explore companies in apparel, home goods or food and beverage, Digital Commerce 360 Ecommerce Databases provide a unique view of a retailers’ overall ecommerce business.   

To put it simply, our databases are a single access point to raw financial and performance data on public and private companies and across several geographical regions. 

WHAT’S INCLUDED 

Ranking of North America’s Top 1000 Online Retailers 

Financial & Performance Metrics 

• Ranking by 2022 web sales 
• 1 Year Web Sales Range (5 Years Exact Included in Pro Database) 
• Company Information 
• Customer Service and Marketing Data 
• Shipping, Mobile and Omnichannel Data 
• Payments and Operational Data 
• Shopper Profiles 
• Technology Vendor Information 
• Website Traffic & Features

What’s New in 2023 

• Sub-Categories are here! Over 90 new sub-categories have been added to the filters within our 15 main categories
• Added Marketplace Operator
• 7 new metrics under Retailer Summary
  • DNVB (Digitally Native, Vertically Integrated)
  • Luxury (Yes/No)
  • Used/Second-Hand Goods
  • Buy-Back/Trade-in-Program
  • Product Rentals
  • Livestream Shopping
• 4 new metrics under operations for web performance
  • First Contentful Paint
  • Onload
  • Time to Interactive
  • Fully Loaded Time
• 4 new shipping metrics
  • Unconditional Free Shipping
  • Free Shipping with Minimum Order
  • Free Shipping Dollar Amount
  • Free Shipping with Other Prerequisite
• 3 new payment types
  • BitPay
  • Any BNPL
  • Any Cryptocurrency

WHY YOU SHOULD BUY IT 

Digital Commerce 360’s 2023 Top 1000 Database is the most up-to-date and accurate financial and performance data that exists on North American ecommerce, giving you a detailed look at the online retailers responsible for the majority of U.S. ecommerce sales.   

RELATED CONTENT YOU MAY LIKE 

Top 1000 Retailers Report 

A detailed analysis of North America’s leading online retailers ranked 1-1,000 

Top 500 Retailers Database 

Rankings and data on North America’s leading 500 online retailers 

Next 1000 Retailers Database 

Rankings and data on North America’s leading online retailers ranked 1,001-2,000 

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Those were two of the findings that took me a bit by surprise as I wrote the 2020 Digital Commerce 360 Top 1000 Report, which analyzes the performance of the 1,000 leading North American companies by online retail sales. And there were other noteworthy insights that emerged from the Top 1000 data. Here are five not-so-obvious trends that come out of this report.

1. Stores turn out to be valuable ecommerce assets—especially when selling groceries

The common wisdom may be that online shopping is killing physical stores, and certainly, it’s doing a number on many weaker retail chains. But the store-based retailers with deep enough pockets to provide omnichannel convenience are killing it online, especially those that sell food.

Five big retail chains—Walmart Inc. (No. 3 in the Top 1000), The Kroger Co. (No. 13), Target Corp. (No. 12), Ascena Retail Group (No. 38, operator of apparel retailers like DressBarn, Maurices and Lane Bryant) and The Home Depot Inc. (No. 5)—all registered 2019 online sales growth that exceeded the 19.1% growth of Amazon.com Inc. (No. 1).

Walmart, Kroger and Target all are major grocery retailers and Top 1000 retailers of food and beverages, and they collectively increased their online sales 21.6% in 2019 over 2019, making it the second-fastest-growing merchandise category after housewares/home furnishings (22.4%). A big part of the online growth for the food retailers in recent years has come from offering curbside and in-store pickup—and those trends only accelerated during the coronavirus outbreak.

2022 Online Food Report

Analysis of North America’s leading online food and grocery retailers. Includes over 30 charts, total sales of the 38 food and beverage retailers in the Top 1000, and estimated market shares of the top merchants like Amazon and Costco.

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But store-based retailers overall increased their online sales in a big way in 2019. In fact, if you take Amazon out of the list of web-only retailers, retail chains grew the fastest among the four types of merchants in the Top 1000, which also includes catalog/call center merchants and consumer brand manufacturers.

2. The catalog page translates quite nicely to the web page

Speaking of catalogers, retailers that got their start by mailing paper listings of their products are grouped in Top 1000 listings with TV retailers that generate sales both online and through tube-watching consumers dialing toll-free numbers to place their orders. This group that we refer to as catalog/call center merchants increased their online sales only by 7.5% in 2019, well below the 16.2% average for the Top 1000.

However, that combination with TV retailers unfairly tarnished the 2019 performance of the pure catalogers. That’s because Qurate Retail Group (No. 9), the biggest Top 1000 retailer in this catalog/call center cohort and operator of the QVC and HSN TV shopping channels, saw its web sales decline 3.2% in 2019, dragging down the performance of the group.

Some of that decline came from consumers giving up cable subscriptions that included the TV shopping channels, a trend that reduced Qurate’s reach from a peak of 99 million households in 2015 to 80 million, although the company says it has since added another 11 million households through a variety of deals with streaming services.

Without Qurate, the rest of the catalog/call center group increased its online sales by 10.2% in 2019. That’s still well short of the Top 1000 average, but respectable. And that’s particularly true because catalogers, while typically not among the fastest-growing Top 1000 retailers, have staying power. The typical catalog/call center retailer in the Top 1000 has been selling online since 1998, three years earlier than the median for the Top 1000 as a whole.

3. Smaller online retailers are more than holding their own

With such big players as Amazon, Walmart, Target and Best Buy growing so fast online, it would be easy to assume that smaller online retailers are suffering as a result. But that’s not the case.

The Top 1000 retailers ranked Nos. 501-1000 collectively increased their online sales by 15.7% in 2019, which was above the North American ecommerce market growth of 15.1%, though slower than the 16.3% collective growth of the retailers ranked Nos. 1-500. But take out Amazon’s 19.1% growth—which skews the results because of Amazon’s huge sales—and the other 499 top retailers only grew by 14.9% in 2019 over the year before.

Many midsized retailers also are doing very well online. In fact, if you divide the Top 1000 into 10 groups of 100, the cohort that grew the fastest was the one made up of retailers ranked Nos. 401-500. Their collective ecommerce revenue shot up 18.1% in 2019.

The upshot is: There is still room for small and mid-tier retailers to command a niche and grow online.

4. Blanket statements about online conversion rates don’t tell you much

It’s not unusual to see an article or press release lead with the seemingly alarming stat that 49 of 50 visits to a retail website do not end in a purchase. And there is truth in that: The median conversion rate for the Top 1000 is 2.2%. But retailers need to look deeper to assess how their own businesses are doing.

That’s because conversion rate varies considerably based on how a retailer sells and what it sells.

2023 Ecommerce Conversion Report

Analyzing retailers’ strategies and investments to increase conversion rates. Includes over 15 charts, shopper insights, a review of trending conversion tactics like omnichannel and personalization, and the Top 5 ways to increase conversion. 

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For example, retailers in the catalog/call center category boast a median conversion rate of 2.9%, well above the norm for the Top 1000. Why? Because many of the shoppers visiting their websites are looking at a glossy catalog or listening to a sales pitch on a TV shopping show. They’re more likely to buy than other shoppers browsing retail sites.

Similarly, the office supplies category has a conversion rate of 4.5%, far above the Top 1000 median. In many cases, the customers going to the sites of the likes of Staples Inc. (No. 8) and Office Depot Inc. (No. 20) are office managers who are replenishing items they’ve purchased before. As a result, a higher percentage of visits end in a purchase.

But there are other categories of goods for which consumers typically shop around a lot, researching and comparing prices. That’s why you see a median conversion rate of 1.3% for automotive parts and accessories retailers in the Top 1000 and 1.5% for jewelry and sporting goods merchants.

The point is that a retailer seeking to assess its performance should compare its conversion rate to that of comparable merchants.

5. Digitally native brands have an aversion to Amazon

As many stores close or get smaller, the brands that make consumer goods increasingly are selling directly to shoppers via the web. And those sales are very profitable for the brands, as they sell to consumers at retail prices, rather than at the wholesale prices they offer retailers that may be 40-50% off list price.

That helps explain why 56.4% of the 268 Top 1000 consumer brand manufacturers sell on Amazon, versus 42.8% for the Top 1000 as a whole. Even with Amazon taking an average commission of 15% and the cost of advertising to boost search results on Amazon.com, the brands can make good money on a big shopping portal like Amazon.

But the 69 brands that got their start selling online—often referred to as DNVBs for digitally native, vertically integrated brands—are much less likely to sell on Amazon. Only 39.7% of them offer their products on Amazon, versus 60.8% for the other 199 Top 1000 consumer brand manufacturers.

Amazon restricts sellers on its marketplace from directly contacting shoppers who buy from them on Amazon.com, which makes it hard for a seller to build its own base of loyal customers from Amazon shoppers. Many digitally native brands try hard to be distinctive—whether by selling apparel made from natural fibers or healthy foods or in some other way—and their future rests with attracting consumers who will come back and buy again.

Most of them are trying to do that by drawing shoppers to their own websites, often via aggressive social media marketing. Putting Amazon between them and their buyer is a strategy most of them are avoiding, at least for now.

These are just a few of the many beneath-the-surface trends that emerged from the 2020 Top 1000 report. But don’t get comfortable with them. With the coronavirus upending shopping in many ways, no doubt the 2021 report will reveal a host of big shifts in the fortunes of North America’s leading online retailers.

The 2020 Digital Commerce 360 Top 1000 Report can be downloaded now as a PDF for $499. Digital Commerce 360 Gold and Platinum members receive a complimentary copy of this report as a part of their membership.

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Political moderates are the most likely to buy online, closely followed by liberals. And both groups shop frequently for women’s apparel, home furnishings and children’s goods. Conservatives are the most likely to shop via catalogs. And they buy a lot of tools and auto repair products, books and music, and crafts items.

These conclusions are based on an analysis of 50,000 consumers from each of three categories—individuals who characterize themselves as conservative, liberal and moderate—and then comparing those groups against all consumers in the Infogroup database. Infogroup says it has data on 300 million individuals in 184 million households compiled through its own research, client data and external sources.

The analysis suggests there are other significant differences based on political affiliation. Liberals are the youngest and most likely to live in cities. Conservatives are the oldest, and more likely to live in suburbs and rural areas. Moderates have the highest income, are most likely to have a college degree and are the most likely to be married and have children in the home.

Why is it important to understand these connections between political leaning and lifestyle?

“This kind of marketing intelligence influences the channels marketers decide to use to promote their products and services—whether it be particular radio outlets, Fox News vs. MSNBC, or particular print publications,” says Heather Winnicki, Infogroup senior vice president of consumer transactional data. “It’s especially important now, at a time of great polarization, that companies know who is responding to their messages, so they can align those messages with their goals.”

Winnicki notes that much of this data comes from direct-to-consumer retailers and brands, many of them selling non-essential items. That might skew the income and education numbers higher, as lower-income consumers might be less likely to buy products that are not necessities.

She also can’t explain why moderates appear to be the most affluent and the biggest shoppers for discretionary items. “We don’t know the reason for the disproportionately high income we’re seeing among moderates,” she says. “Perhaps those who don’t commit themselves to one side or the other are able to accumulate more wealth. We don’t know. It may warrant an in-depth political study. ”

Next 1000 Database

Leading online retailers ranked 1,001-2,000 and headquartered in North America. Access includes up to 5 years of web sales, company information, technology vendor information and more. Web sales range from $1 million to over $41 million annually.

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Here are some additional insights from the Infogroup report about the relationship between political preference and various shopping behaviors and demographic characteristics:

• 84.1% of political moderates and 83.9% of liberals have made an online purchase in the past year, versus 71.8% for both conservatives and consumers overall.
• 32.2% of moderates have purchased $500 or more online in the last 12 months compared with 28.5% of liberals, 25.4% of conservatives and 22.2% of all shoppers.
• 26.6% of conservatives have purchased from a catalog in the past year, versus 23.0% of all consumers, 20.1% of moderates and 16.4% of liberals.
• Liberals are the youngest group, with 37.4% under 40 and 42.3% over 50. Conservatives are the oldest, with only 21.8% under 40 and 62.2% 50 or over.
• 78.6% of moderates are college graduates, versus 64.2% of liberals, 60.8% of conservatives and 49.4% of consumers overall.
• 93.7% of moderates and 92.2% of conservatives own their own homes, compared with 78.2% of all consumers and 73.6% of liberals.
• Moderates are the most likely to have children at home, at 44.3%, followed by 39.1% for conservatives, 31.7% for liberals and 30.8% for all consumers.
• 61.9% of liberals and 58.9% of moderates live in urban areas, versus 41.8% of the consumers overall and 37.8% of conservatives. 32.5% of conservatives live in suburbs and 29.7% in exurban or rural areas.

The post Who shops the most online, liberals or conservatives? appeared first on Digital Commerce 360.

Shortened school years, no graduation ceremonies, no graduation parties and uncertainty about in-person school in the fall all mean tepid spending on college-related purchases. This is bad news for online and catalog retailer OCM, which sells dorm room bedding and other college home goods.

“We do support and care packages for the students during finals. You can imagine that slowed down immediately when students didn’t come back from spring break,” Parrish says.

OCM partners with about 900 universities to license their logos and names to put on its products. As of publishing, the majority of them are planning to have students return to school in some capacity in the fall.

For the past four decades, OCM was a direct-mail business, and it didn’t launch its ecommerce site until about 8 years ago. Now, ecommerce is a primary channel, although it still conducts a significant amount of business from consumers calling into its call center, Parrish says. OCM is No. 1291 in the Digital Commerce 360 Next 1000, with web sales growing a Digital Commerce 360-estimated 9.1% year over year in 2019.

Commitment day—or the deadline for students to decide which college to attend—is typically May 1. Right around then, OCM counts on a spike in sales as students are excited and want to outfit their dorm room. This year, with uncertainty about schools being open in the fall, many universities postponed that deadline and OCM did not have its typical May-Day spike in sales or traffic, Parrish says.

Here’s a look at traffic for OCM.com in 2019 and how the coronavirus pandemic has squashed its typical spring traffic bump, according to web measurement firm SimilarWeb.

OCM looks to this 3-month spring period, when students transition to college, as a critical time to acquire customers. After that, it works to re-engage shoppers via direct mail.

Prior to the coronavirus crisis, OCM had planned a new integration to help increase its conversion rate and acquire new customers. OCM focuses on acquiring a soon-to-be freshman customer, so it can get her first purchase of dorm bedding, and possibly future college home purchases as she moves off-campus and has other college-related needs.

OCM decided to use digital marketing vendor Listrak’s cross-channel automation tool called Growth Xcelerator Platform (GXP) to grow its email list and increase conversion from email. OCM went with Listrak because it already uses the vendor as its email service provider—there was no additional technology integration needed. Plus, it was about 40% cheaper than using other vendors, Parrish says.

The integration was supposed to launch in February, although OCM delayed the launch until May as school plans were up in the air for a while. It took about 4 weeks to get the tool up and running, she says.

The tool is helping OCM think more positively about the future. Revenue is up 800% for consumers who had abandoned their cart from mid-June compared with mid-May, the retailer says. While the season is still getting going, the retailer says this is a significant jump. Plus, in the last month, sales generated for consumers that have received a GXP-targeted email are up by $450,000 compared with consumers who did not receive one of these emails.

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Annie Hurlbut, CEO and co-founder, Peruvian Connection Ltd.

Annie Hurlbut has been a retailer long enough to know that now is not the time to be selling merchandise that competitors can easily replicate.

“If a product is commoditizable, here comes Amazon,” says Hurlbut, co-founder and CEO of Peruvian Connection Ltd., No. 901 in the 2019 Digital Commerce 360 Top 1000 rankings of North America’s leading online retailers.

Fortunately for Hurlbut, all the ponchos, dresses and jewelry she sells are handmade, not produced by the millions in factories. Most are imported from Peru, a country she fell in love with when she visited for the first time in 1971 while a 19-year-old anthropology student at Yale.

Five years later, she and her mother Biddy Hurlbut founded Peruvian Connection, bringing the products she saw in markets in Cuzco and other Peruvian towns to U.S. consumers, initially selling by catalogs. She now also sells online at PeruvianConnection.com and operates eight bricks-and-mortar stores, seven scattered around the U.S. and one in London.

The handmade products would be impossible for any rival to duplicate in large quantities, she says. And that includes Amazon.com Inc., No. 1 in the Top 1000.

“We produce originally designed, natural fiber goods, all artisan-based. So, by definition, small batch,” Hurlbut says. “Nobody will be able to imitate our product in a big way.”

Peruvian Connection moves into bedding

Hurlbut plans to press her advantage this summer by adding a new line of bedding merchandise: sheets, pillowcases, duvet covers and the decorative pillow covers known as shams. All will feature the kind of Peruvian designs that adorn the apparel the retailer sells.

Hurlbut says she’s wanted to expand into bedding since the colorfully patterned sheets she used to buy from Ralph Lauren disappeared about 20 years ago. The move into bedding came after a friend introduced her to a designer who used to work for Ralph Lauren. “He knew where everything was sourced,” Hurlbut says. “Suddenly, it all fell together.”

A sampling of merchandise from Peruvian Connection’s new bedding line.

Peruvian Connection announced plans to launch the new collection this week and will make the merchandise available to shoppers in July. It will only be available initially in the United States, Hurlbut says, and not in Germany and the United Kingdom where Peruvian Connection distributes its printed catalog. She says the retailer sends out about 5 million catalogs a year.

Selling the products in the U.K. and Germany would require resizing the merchandise to meet the standards of those countries, Hurlbut says. “We decided to test home first in the U.S. market before expanding to other markets,” she says.

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The richly illustrated catalogs drive sales on PeruvianConnection.com, which accounts for about 65% of the retailer’s revenue, and to its call center, which produces about a quarter of sales. The remaining 10% of revenue comes from its stores, she says. The company’s annual revenue is about $75 million, she says, which would put online sales roughly at $50 million.

Besides moving beyond apparel and accessories for the first time, Hurlbut also plans to sell the bedding products wholesale, something she’s not done before. It likely will be through an exclusive relationship with a high-end bedding retailer, but she did not provide any details.

She hopes offering Peruvian Connection products through a well-known retailer will help generate awareness of her brand, just as selling through department stores like Neiman Marcus and Bloomingdales helped publicize the upscale fashions of designer Eileen Fisher.

“We’re doing it not so much for the margin, but the exposure,” she says.

Coronavirus dampens sales

Meanwhile, the current coronavirus outbreak has cut into sales. Peruvian Connection closed all eight of its physical stores, and online sales are down. Hulburt says that’s not surprising, given that the retailer hasn’t sent out a catalog recently, which would boost sales, and that her merchandise is relatively pricey.

“It is investment clothing, and that will come back,” she says. But, she says, if her customers “are worried about their kids or their neighbors, it puts a damper on sales.”

“It’s exactly like 2008,” she adds, referring to the financial crisis that erupted in 2008.

There has been one silver lining for Peruvian Connection from the pandemic, Hurlbut says: The media has shown a lot of interest in her announcement of the new bedding collection. She thinks that’s because they’re anxious to write about something uplifting at a time when the COVID-19 epidemic is producing so much gloom.

“With all this bad news, we’re getting quite a bit of press about this,” she says. “It’s a little bit of good news and people are saying, ‘We’ll take it.’”

The post An apparel retailer with a unique product set expands into bedding appeared first on Digital Commerce 360.

For Allied’s ecommerce site, providing detailed, useful displays of electronics products deployed in factory automation systems and other industrial uses is crucial to its ability to engage Allied’s customers with their highly technical needs, she adds.

Stacey Ostermann, director of digital product content, Allied Electronics & Automation

“This isn’t like shopping for a dress on Amazon, when a customer can ask ‘Do I really want it?’” Ostermann says. “Customers who search on our site know what they want, and really need to meet their exact product specifications.”

That’s why Allied Electronics & Automation has consistently upgraded its ecommerce site, AlliedElec.com, since launching it in 1998. “We’re adding tons of content to our site, including expert advice articles,” she says. “We want to help customers solve problems—not just give them products, but show them how to fix problems.” Allied, the Americas business unit of United Kingdom-based multibillion-dollar electronics distributor Electrocomponents plc, sells throughout the United States, Canada and Mexico and is starting to sell into Chile.

Going beyond the paper catalog

Until it changed its marketing and sales strategy in recent years, Allied relied mostly on its paper catalog and its network of 42 physical branches to reach and serve customers. But, responding to its customers’ increased interest in ecommerce, it discontinued the catalog in 2015. “So that makes our ecommerce site now that much more important,” Ostermann says.

Site search and page-loading speed are constant improvements, but ones that are considered table stakes among most if not all online sellers, Ostermann says.

To go beyond such site basics, Allied has also developed online features that help customers quickly sort through product options to compile products with the right mix of specifications. A product page for direct-current power supply equipment, for example, lets a buyer sort products by such criteria as output power, voltage, electric current and manufacturer.

Spinning 360 degrees

An electronic converter that buyers on AlliedElec.com can spin 360 degrees, zoom to enlarge, and “explode” into these three components to view details.

To make Allied stand out further online, the company deployed in August 2018 a 360-degree-spin imaging technology system that produces in Allied’s own studio 3D images of products; online viewers can spin the images around and zoom in to view fine details. For Allied’s customers, who often need to see such details before buying, “it can feel like they’re holding that product in their hands,” Ostermann says.

That level of online product displays is helping to differentiate Allied from its competitors, she adds. “Everyone out there is trying to provide faster site search, rank higher in Google results, and they also have product images,” Ostermann says. “But we were the first in our industry among our direct competitors to have 360-spin.”

“This is another step in our journey to create the best online experience for our customers,” says Dan Stewart, Allied’s vice president of ecommerce and marketing. “We know that images are particularly important to the experience our customers have online.

Higher conversion rates

The payoff has already arrived in higher conversion rates for products that Allied now features online in 3D images with 360-degree spin and zoom features, compared with products not featured with the new imaging technology system, Ostermann says, declining to provide specific rate increases. “We are seeing an increase in conversion that is very encouraging,” she says.

In addition, the imaging system, from imaging technology provider Snap36 LLC, is also helping Allied’s sales agents explain product details to customers. “They say it’s helping them sell,” she says.

So far, AlliedElec.com is featuring more than 20,000 of its some 3.5 million SKUs through the 3D-spin-zoom system. It eventually may display as many as two-thirds of its products—mostly those with multiple parts and interiors that warrant the 3D spin treatment, Ostermann says.

Allied’s ability to produce a large volume of product images in-house complements its move away from a paper catalog and toward a stronger focus on ecommerce, she adds. With paper catalogs and brochures, Allied could rely on its suppliers to provide the relatively smaller number of images it ran in print compared to what it now posts to its website.

“In the world of catalogs and brochures, if we had a circuit breaker in 20 variations, we might only show one image,” she says. “Now, in the digital world, we need to have an image of every variation. We have to make sure that what customers pull out of a delivery box matches what they ordered.”

Allied got off to a quick start with the product-imaging process when a Snap36 demonstration team showed up with four of their imaging machines and produced several thousand images. Allied then decided to purchase two imaging machines—consisting of a table that holds and revolves products while photographed by a digital camera—and hired a staff of four people to operate the equipment and manage the image files.

72 images per product

Ostermann declines to comment on the cost of the Snap36 technology, but notes that it enables Allied to take high-end 3D-spin images of a product in less than 10 minutes. The Snap36 equipment can accommodate products up to 90 pounds and four feet in length. As the equipment turns a product 360 degrees, it takes three sets of 24 images, from the bottom, middle and top, producing 72 images overall of each product. The result lets online customers use their computer mouse to spin the final product image 360-degrees and zoom into fine details.

Allied also uses the imaging system to show how multiple parts of a product fit together and detach in “exploded” images.

With its new equipment and staff, Allied currently has the capacity to produce about 1,000 3D-spin images per month, Ostermann says. Over the long term, Allied will apply the Snap36 treatment to the SKUs that most warrant the 3D-spin treatment.

That will help customers to more quickly consider products before placing an order, Ostermann says. “3D-spin digital images are way faster to view details than static product images with descriptions,” she says. “And customers don’t have to read through a 700-word description.”

Katy De Leon, vice president of marketing for Snap36, says her company provides photographic technology and services through three types of offerings:

It will sell photography equipment starting at under $10,000 that clients operate in their own facility; it also provides training, software, services and support.

It will shoot products at its own Chicago studio starting at $50 and up depending on the volume and complexity of the project.

And it offers a managed service, through which it will use its own equipment at a client’s warehouse to photograph thousands of products, often starting at $35 per product.

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