Nonstore Retail

Nonstore Retail

Brief Excerpt from Industry Overview Chapter:

Companies in this industry sell merchandise on retail websites, online auctions, mail-order catalogs, toll-free telephone numbers, television shows, or other business channels. Major companies include US-based Amazon, eBay, HSN, Newegg, and QVC as well as Alibaba Group (China), Argos and ASOS (UK), JD.com (China), MercadoLibre (Argentina), and Otto Group (Germany.

COMPETITIVE LANDSCAPE

Demand is driven by consumers’ personal income. The profitability of individual online retailers depends on effective marketing and competitive pricing to build a customer base. Larger firms enjoy central purchasing efficiencies and economies of scale in inventory management, customer service, and telecommunications. Smaller firms compete on outstanding customer service and providing niche products. The industry is concentrated: the top 50 companies account for about 60% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products sold by internet and mail-order retailers include prescription drugs (about 25%), clothing (over 10%), computer hardware and software (about 10%), food dry goods (about 5%), cosmetics (less than 5%), and books (less than 5%). Popular categories listed on consumer-to-consumer (C2C) auction websites include collectibles, antiques, and electronics. High-end merchandise includes real estate, yachts, and cars.