Internet, TV & Mail-Order Retailers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 40,800 Internet, TV and mail-order retailers in the US sell merchandise through non-store channels, including catalogs, toll-free numbers, the Internet, and television (electronic shopping). Major product categories include drugs, health and beauty aids; computers and software; and clothing and accessories. Examples of Internet, TV and mail-order retailers include Internet auction sites, mail order book clubs, catalog/call center operations, Internet-only retailers, and home shopping networks.

Seasonal Demand

Similar to the traditional retail industry, Internet, TV, and mail-order retailers experience seasonal sales, with peaks during the winter holidays.

Reliance On Information Systems

System interruptions or problems with communications suppliers can result in outages or loss of critical data.

Industry size & Structure

The average Internet, TV, or mail-order retailer operates out of a single location, employs 10 workers, and generates $20 million annually.

    • The Internet, TV, and mail-order retail industry consists of 40,800 companies that employ over 420,000 workers and generate $837 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 firms account for about 63% of industry sales.
    • Large companies include Amazon, eBay, Qurate (QVC and Home Shopping Network), Plow & Hearth, and L.L. Bean. Many large companies have international operations.
                                Industry Forecast
                                Internet, TV & Mail-Order Retailers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 3, 2023 - Rising E-Commerce Use to Result in Fewer Stores
                                • Rising e-commerce use, lower consumer spending, and reduced credit availability are expected to contribute to the closure of 50,000 retail stores by 2027, according to a new forecast by UBS reported in Retail Dive. The forecast assumes that 25% of online orders will be fulfilled by a retail store by 2027, up from 15% currently. The US presently has about 940,000 retail stores, excluding fuel and food service. Since January 2021, more than 5,000 stores across all retail segments have closed or are set to close due to several factors, such as higher costs and a decline in units per store. Store closures likely will disproportionately affect smaller chains. Per the UBS report, “We believe this trend should continue in the years to come, with consumers consolidating their trips and shifting towards online channels. As underperforming retail stores are shuttered, it should help the store productivity of surviving locations.”
                                • Online product prices declined by nearly 2% in March 2023 year over year and were flat month over month, according to data from the Adobe Digital Price Index. It was the seventh consecutive month of year-over-year price decreases. Categories with declines included flowers/gifts (-24.3%), electronics (-12.9%), toys (-6.6%), appliances (-4.9%), and home/garden products (-4.9%). Some categories with persistent inflation show signs of deceleration. Grocery prices were up 10.3% in March 2023 year over year, but price increases in this category have slowed over the past six months. Apparel and personal care also saw prices rise 6.6% and 4.4%, respectively, in March 2023 year over year.
                                • The National Retail Federation (NRF) is projecting US retail sales growth of 4% to 6% in 2023, climbing to $5.13 trillion to $5.23 trillion. In 2022, retail sales grew by 7% to $4.9 trillion. The non-store and online sales segment is expected to grow by 10% to 12% in 2023 to a range of $1.41 trillion to $1.43 trillion. Much of the growth is driven by multichannel sales, which uses the physical store as part of the fulfillment process. Brick-and-mortar stores remain the primary point of purchase for consumers, accounting for some 70% of total retail sales. According to NRF President and CEO Matthew Shay, “In just the last three years, the retail industry has experienced growth that would normally take almost a decade by pre-pandemic standards. While we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels.”
                                • More than 60% of shoppers said they would not shop at an e-commerce company that doesn't offer free shipping, up from 52% the previous year, according to a survey by Shippo in Multichannel Merchant. Nearly half said they would pay more for a minimum order threshold for free shipping. High shipping costs were merchants' top concern in 2022 and looking ahead to 2023. About 44% of merchants said they're spending an average of 11% of order value on shipping, with a third saying the figure was between 11% and 20%. Meanwhile, supply chain delays, a major issue in the past two years, were only cited by 12% as a concern. Less than half of merchants provide an average e-commerce shipping time on the checkout page, although shoppers desire this item. Nearly 30% of consumers said they did all or most of their shopping online, up from 16% last year.
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