Conversations & Insights November 23, 2015

L2 Insights: Winner Take All

35,727 views

play

The web is often perceived as the ultimate leveling of the playing field, opening up channels of distribution to manufacturers, brands and retailers who would otherwise not have the capital to build brick and mortar stores. Yet, e-commerce data shows that digital is in fact widening the gap between the haves and have nots. The top fifty retailers in the U.S. control seventy-five percent of all e-commerce volumes in the country, and the top four retailers—Amazon, Apple, Walmart and Staples—control 40% of all e-commerce.

The winner-takes-all environment extends to manufacturers. For brands, the potential of direct-to-consumer e-commerce is proving to be a myth. Esteé Lauder Companies, for example, is one of the leaders in direct-to-consumer e-commerce, selling approximately $600M in direct-to-consumer e-commerce volumes across its branded URLs. That pales in comparison to Macy's $5.4 billion in e-commerce sales, which equates to approximately 50% of Estée Lauder Companies total sales volumes on a global stage.

Moving forward, it may be prudent for manufacturers to focus less on their branded URLs, and more on their relationships with Macys.com, Nordstrom.com, and other third-party points of online distribution.

 

 

Become a Member

Members use our data and insights to benchmark their digital performance and identify and prioritize opportunities to maximize the business impact of their digital investments.