Fueled by the popularity of mobile shopping, and e-commerce investments that could rival some Third World GDPs, the country’s largest pure-play and multichannel tech dealers enjoyed another double-digit online sales spike last year.
According to TWICE’s fourth annual Top 25 CE E-tailers Report, produced with market research partner The Stevenson Company, the industry’s leading online lights together garnered $52.4 billion in digital sales, representing a 15 percent increase from 2015.
The gain, which sits atop another 15 percent pop in the prior year, reflects the steady shift of channel dollars from physical to cyber stores, as the online mix for the Top 25 increased 11.6 percent, to 42.3 percent of all sales.
To cast the growing digital divide in another light, consider that total sales for the 100 largest CE dealers grew a scant 1.5 percent last year when factoring in brick-and-mortar.
Of course the share shift also reflects Amazon’s amazin’ 25 percent revenue gain, as the e-commerce colossus continued to consolidate CE market share at a ferocious clip.
But cyber success wasn’t limited to the Bezos Bunch last year: Stepped up investments in online infrastructure helped propel digital sales at Best Buy and Costco far faster than their brick-and-mortar gains.
For third-place Best Buy, which dropped the ball on e-commerce while tending to its real estate, overhauling web operations was a top priority for CEO Hubert Joly upon his arrival in Minneapolis. His diligence – and competitive pricing – paid off by getting Best Buy back in the digital game, to the point that online sales now represent fully 10 percent of its channel mix and grew more than 19 percent last year.
So too Costco (No. 7), which had long neglected online sales but is making up for lost time by expanding its dot-com assortment and improving website functionality, which helped foster a 12.3 percent lift in online tech revenue last year.
But not all are making the digital transition as smoothly. QVC (No. 22), the leading broadcast channel retailer, this year earned the distinction of greatest online sales decline, as it grapples with a core consumer who’s more comfortable shopping by telly than by tablet.
But despite those extremes, the rankings remained relatively stable this go ’round. The biggest movers and shakers were Micro Center, which moved up six spots to 18th place; Microsoft, which leapt five places to No. 15; and Apple, which despite flat online sales while awaiting the iPhone 8 launch still managed to leapfrog Best Buy to second place.
The TWICE Top 25 CE E-tailers Report ranks the leading domestic CE dealers by online sales of consumer electronics through the combined e-commerce and mobile-commerce channels.
Sales figures are based on information that was supplied by retailers responding to a 300-dealer survey by TWICE and research partner The Stevenson Company. Absent retailers’ input, estimates were developed from Stevenson’s syndicated TraQline quarterly market tracking surveys of 150,000 shoppers; industry sizing based on wholesale shipment figures from the Consumer Technology Association (CTA) and other sources; and average retail price points by product.
All estimates were further refined through the use of public filings with the Securities and Exchange Commission (SEC), TWICE industry analyses, retail analysts’ financial reports, published data and other external sources.
Once the estimate was determined to be a reasonable assumption of the retailer’s CE sales, the figure was broken out by product category based on the TraQline surveys.
Sales figures by total and by category for 2016 were then compared to 2015 sales tallies, and adjusted if necessary to more closely track total reported revenue growth.
Businesses must meet the following criteria to be considered consumer electronics retailers and to qualify for inclusion in the Top 25 report:
● sells new products directly to consumers;
● sells consumer electronic products as one of its principal lines of business;
● does not offer consumer electronics products primarily to sell its transmission services, i.e. wireless carriers, cable operators, satellite radio/TV providers; and
● sells merchandise that is considered consumer electronics products as defined by the CTA.
Sales are considered to be the revenue received for the products sold primarily to consumers, including CE hardware and accessories and personal computers.