Smaller e-commerce retailers managed to grow Web sales 14.4 percent in 2014, totaling more than $6 billion. That number is just below the overall 15.4 percent increase in U.S. e-commerce and slightly below the 15.7 percent increase among the largest Web merchants.
According to the Internet Retailer 2015 Second 500 Guide, it's a tough time to succeed in e-commerce, especially when it comes to competing with e-commerce giants such as Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT). Compared with the 3.5 percent overall retail sales growth in the United States, small e-commerce sales grew four times faster.
Overall in the United States, online sales grew 16 percent in 2014, while in-store sales grew just 2.4 percent.
"When you're a small business, you've got to eat and figure out how to make a profit," Sucharita Mulpuru, VP and principal analyst at Forrester, told Internet Retailer. "But that means they can't sell the same product that everyone else does. You need to be hyper-focused on your niche, develop products to support that niche, own them uniquely and use traditional marketing to get the word to help drive those sales."
Smaller e-retailers that have been able to grow online sales significantly are usually those that have raised large sums of venture capital funding, allowing them to invest heavily in marketing. For example, 289 e-retailers that sell primarily online increased their sales by 15.6 percent in 2014. Conversely, the 86 retail chains fell slightly behind, growing just 15.3 percent, followed by 74 consumer brand manufacturers that boosted sales by 11.8 percent, and catalog-based merchants that grew sales by 9.9 percent.
Small online retailers are also building their investments in social media and mobile technology. Second 500 e-retailers collectively grew their Facebook following by 19.6 percent and their Twitter and Pinterest following by 28.4 percent. Further, 283 of the Second 500 merchants now operate mobile-optimized sites, a 12.7 percent jump from the previous year.
-See this Internet Retailer article
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