Amazon.com tops the annual STORES Favorite 50
online retailers list, followed closely by
Wal-Mart, eBay, Best Buy and J.C. Penney
Company. If the top five seem oddly familiar,
you’re right; they’re the same merchants that
ranked highest on this exclusive list a year
ago.
Each continues to grab its share of headlines.
Within the last two months Amazon “hooked up”
with Zappos.com, then “broke up” with Target.
eBay partnered with General Motors for a
limited-time promotion that allowed California
potential buyers to negotiate the purchase of a
new car or truck from their sofas instead of the
local showroom.
But the real news in STORES’ third annual
ranking of consumers’ favorite online retailers
isn’t necessarily about the list’s leaders: it’s
about a palpable shift in the mindset of
shoppers. Loyalty is taking a back seat to
price, and shoppers are becoming agnostic about
retail channels. Nowhere is that more apparent
than in the first-time entry of Craigslist.org.
Craigslist, which debuts at No. 25, cut its
teeth as a web-based provider of free classified
advertisements but has evolved into a
centralized network of online communities.
Industry gurus wouldn’t characterize Craigslist
as a retailer. Yet when BIGresearch polled more
than 8,600 consumers in June, asking them which
websites they shop most often for apparel and
non-apparel items, the San Francisco-based
company bested its well-known neighbor Gap (No.
28) and customer-favorite Zappos.com (No. 38).
Purists may wince at the thought of Craigslist
being perceived as an online retailer, but
they’d also have to acknowledge that industry
graveyards are littered with the bones of those
who tried to dictate to shoppers rather than
listen to them. Most are willing to concede that
it may be time to once again tweak the
definition of retailing.
“For a growing number of shoppers it’s not about
the retail channel or the nameplate over the
door — It’s about getting the best price,
wherever they can find it,” says Wendy Liebmann,
CEO of WSL Strategic Retail. “After years of
buying and selling on eBay.com and similar
sites, shoppers are comfortable bypassing
traditional channels and buying something from a
seller a few towns away.”
Current economic challenges, she says, “have
profoundly changed shoppers and have made them
more willing to find new, smarter options. The
same person who grimaced at a garage sale 18
months ago is now willing to buy a gently used
coffee table from someone 40 miles away – and
for the privilege of buying it, he’s willing to
pay cash and drive there to pick it up. They
don’t feel badly about it or compromised in any
way.”
There can be no doubt that part of Craigslist’s
popularity among online consumers is closely
tied to the new economy. It provides those who
need to raise cash quickly with a free platform
to sell and a wide audience. And, for those
still spending, Craigslist represents an
alternative channel that’s both a throwback to
the way consumers once acquired most goods
(bartering or buying from a neighbor) and a
business model suited to the sustainable
sensibilities of today’s shoppers and their
new-found obsession with social networking.
The Favorite 50 also yields additional clues as
to just how capricious the online consumer can
be. A year ago, Costco ranked 26th on the chart,
Kmart 34th. This year, it’s as if the two
switched positions: Kmart climbed to No. 23,
while Costco slipped to No. 36.
From the online shopper’s point of view, it’s
likely that Costco’s more upscale web strategy
has caused consumers to switch their allegiance
– and more of their spending – back to the
store. Living paycheck to paycheck is a sobering
reminder of the need to stretch every dollar.
With improved assortments and an
easy-to-navigate website, Kmart provides a
value-oriented option.
Other retailers that seemed to curry more favor
among online shoppers in 2009 include women’s
plus-sized retailer WomanWithin.com which jumped
from 29th to 21st; No. 32 Chadwick’s, a
specialty apparel shop with a value-oriented
price structure that placed 40th last year; and
HSN.com, which rose 12 spots to No. 34.
Craigslist.org was not the lone newcomer to the
2009 Favorite 50. Others include Eastbay.com
(No. 27), SierraTradingPost.com (39), Meijer.com
(42), Forever21.com (44), REI.com (49) and
FashionBug.com (50).
Interestingly, sporting goods and outdoor gear
make up the lion’s share of the product offering
at three of the six newcomers. Two play in the
affordable fashion arena – one catering to the
under-25 set, while the other targets the misses
and plus-size shopper. General merchandiser
Meijer.com breaks into the list with a
combination of value and variety.
Eastbay.com — the only newcomer that qualifies
as a strict online pure-play — is owned by
parent company Foot Locker. In a classic case of
the tail wagging the dog, it is the only name in
the Foot Locker stable of brands to appear in
the Favorite 50.
In February, Forrester Research projected that
U.S. online retail sales would grow 11 percent
(to $156 billion) by the close of 2009. While
growth of any measure is to be celebrated given
the funk that consumers have been in since last
fall, the figures represent an overall slowdown
from the recent past. Online sales grew 13
percent from 2007 to 2008 and by 18 percent in
2006.
