Want to Know Who’s Growing in Retail? Take a Look at 5 of the Fastest Growing Retailers
By Tricia McKinnon
eMarketer predicts that the retail sector in the US will grow by 3.3% in 2019. But exactly which companies are going to contribute to that growth? Here are five retailers from digitally native brands to retailers that started out with bricks and mortar stores that are growing quickly.
• 2017-2018 revenue growth: 43.6%
• 2017 revenue: $4.720 billion
• 2018 revenue: $6.779 billion
Wayfair was founded in 2002 after the founders Steve Conine and Niraj Shaw noticed a trend. They saw that people were turning to the internet to find a broader selection of furniture. The duo then created a website to sell stereo racks and stands online called racksandstands.com. Four months later the website was the largest online seller of entertainment furniture. Based on the success of that site they replicated the model across several other sites which eventually led to a collection 250 standalone websites each focusing on a specific category within home goods. These categories spanned the gamut from barstools to birdhouses. Part of the reason for creating the individual websites which had simple names was that it made it easier for the site to surface at the top of search engine results. Wayfair CEO Niraj Shaw has said: "our view was that you just had to pick a category that was off the beaten track." "You couldn't focus on electronics or, you know, the same items that Amazon and others were selling."
In 2011 the duo consolidated all of their websites into a single one called Wayfair. Wayfair is now the 12th largest online retailer. Earlier this year Wayfair announced that it would be opening its first retail store this fall.
• 2017-2018 revenue growth: 37%
• 2017 revenue: $441 million
• 2018 revenue: $604 million
Etsy launched in 2005 after one of the co-founders wanted a better way to sell his own handmade goods online. At the time there was a lack of websites catering to independent craftsmen and women as well as the buyers of those products. Now etsy.com is an online marketplace for handmade and vintage arts and crafts. Sellers often view Etsy as a better alternative to selling their goods on Amazon or eBay. It’s a place to sell anything from knitwear to perfume to jewellery to pottery and Etsy takes a cut of each purchase.
• 2017-2018 revenue growth: 30.9%
• 2017 revenue: $178 billion
• 2018 revenue: $233 billion
Amazon was founded in 1994 after Jeff Bezos saw data that showed that the internet had grown 2,300% in one year. Seeing the potential for selling items online he made a list of 20 categories that he could start with before deciding Amazon would launch by selling books. 25 years later Amazon is the first search engine that consumers use when searching for a product. It also has over 200 million monthly website visitors. While Amazon started out selling books a major contribution to Amazon profits is a non-retail business: Amazon Web Services.
4. Lululemon Athletica
• 2017-2018 revenue growth: 24.1%
• 2017 revenue: $2.649 billion
• 2018 revenue: $3.288 billion
Lululemon was established in 1998. The founder, Chip Wilson attended a yoga class more than 20 years ago and noticed that everyone was sweating in uncomfortable baggy clothing. Speaking about that time Wilson said: "at that time, everyone wore their worst clothing to the gym." Although athleisure is now a clothing staple at that time there was a real gap in the market. Lululemon is largely credited for creating the athleisure clothing segment and continues to have a cult following despite being in business for over 20 years. It has also done well in the face of increased competition from the likes of Nike, Under Armour, and adidas.
5. Ulta Beauty
• 2017-2018 revenue growth: 14.1%
• 2017 revenue: $5.885 billion
• 2018 revenue: $6.717 billion
Ulta Beauty opened its first store in 1990 after the founders realized that busy women did not want to make three separate trips to a salon, a drug store and the mall to get all of their beauty products. The founders wanted a way to save customers time. The retailer started out mostly in strip malls since it could afford the rent. That strategy has paid dividends since traffic in conventional malls has declined over time. The retailer has also changed the way customers shop for beauty products by combining mass and prestige beauty products within one location. Fabian Garcia, CEO of Revlon has said: “[Ulta Beauty] has completely debunked the old notion that you were either prestige or mass.” “The fact that Ulta challenged the old paradigm is a good enough proof that the world is moving.”