Amazon reigns supreme when it comes to e-commerce, though their reach has extended into other business practices – they have begun streaming TV shows and movies, opened up self-publishing services for would-be writers. In e-commerce, Amazon has taken a large chunk of all online retailers sales and is responsible for a great deal of growth in that field. Unfortunately, they are too big and Amazon is now beginning to feel the effects of its own weight and size. Its growth has begun to slow down as a result, and a recent report has shown Amazon has only grown in size by just 20% since 2015. This has worried many of Amazon’s investors. It does not look good for Amazon, but now three online retailers have begun to outpace this massive giant and they have already exceeded Amazon’s growth. They are Etsy, Wayfair, and Stitch Fix.
Etsy is an online retailer which focuses on selling items which are handmade or of a vintage variety. It is a crafty niche, really since retro items are all the rage. Etsy has simply given consumers and craftsmen a platform to see and to sell vintage wares, and many of them like the idea of buying items which are handmade, unique, or just throwbacks. This platform has become a goldmine since it has connected buyers, makers and sellers of these products together. Etsy has become extremely popular, and they have shown steady growth as the years go by to $1.2 billion, and revenues have continued to shoot up and up since then. The user numbers grew as well, while the operating income has grown by 61% year over year, and active sellers are going up by 9% and buyers by 18%, year by year. This growth is aided by strong holiday sales; Thanksgiving going through to Cyber Monday sees growth by 30% and an increase to the selling fees is also helping to boost the results. But now Etsy has unveiled a new five-year plan to grow at 16% and 20% annually, with revenue rising higher as well.
In contrast to Etsy’s creative niche, Wayfair is a home good’s seller is also doing well. Millions of consumers have been persuaded by the highly successful and slick advertising campaign run by the company to try out its furniture and their home goods, lifting their sales up while showing their shareholders.
Wayfair invests heavily in their own growth, not making it entirely profitable despite it garnering a healthy revenue of $1,996 billion which is just up to 41% year after year. Their consumer base has reached up to 15 million – 38% compared with the year-ago period, with each and every customer spending more and orders frequently. In 2018, the revenue per customer only increased by 5% year by year to $443 while orders increased to 1.85 since 2018.
Wayfair’s self-investment looks set to take it further out – they have their eyes open on the markets in Canada, the United Kingdom, and Germany.
Stitch Fix – online subscription and personal styling service – is another online retailer who is doing well, but for investors its kind of a battleground because many can’t get their heads around the clothing service which is subscription based. Others just want to know why its never been around beforehand.
Not many agree with the need for a service like Stitch Fix, but their numbers really make their detractors eat their own words. Stitch Fix has made a revenue of $370 million, and it has gone up 25% year by year. This is serious stuff since Stitch Fix has exceeded expectations while they’ve marked the sixth quarter of growth which exceeded 20% while their earnings per share of $0.12 were more than double the expected $0.05.
While the slowing down of user growth has caused concern in some quarters, Stitch Fix was rewarded by the growth of active clients which have grown 18% year after year, arriving at around three million. To top it all the amount Stitch Fix’s existing customers were spending on average over $463, which is up by 6% which is higher than the last years quarter.
The management this model of growth will continue for the company, and it is being introduced to other countries, such as the United Kingdom, providing another avenue for growth. If this slow and steady flow continues to be successful, Stitch Fix will probably approach other countries to add to their success.
Shares for all three of these online platforms have increased – Etsy has received 153% increase in its shares, Stitch Fix has received only 32%, and Way fair has gained around 99% increase in shares. In Amazon’s case, the investors fear the slowing growth has just hampered its stock prices – it has just gained 6% in 12 months, though it is good to note that this increase may not always be happening.