Internet & Mail-Order Retail Industry Profile

The Internet and mail-order retail industry in the US includes about 20,000 companies with combined annual revenue of about $270 billion. Major companies include Lands’ End, LL Bean, Amazon, Overstock, and Hanover Direct. The industry is concentrated: the top 50 companies account for about 70 percent of industry revenue. Over the past five years, the bulk of the industry's revenue has shifted from catalog to Internet sales. While most brick-and-mortar retailers have an online presence and many also offer catalog sales, this profile focuses on retailers who use the Internet or catalogs as their sole or primary sales channel.

Globally, revenue from Internet and mail-order retailing totals more than $1 trillion annually. Major Internet and mail-order retailers include Germany's Otto Group, N Brown Group of the UK, and GS Home Shopping of South Korea.

COMPETITIVE LANDSCAPE

Demand is driven by consumers’ personal income. Profitability of individual companies depends on effective marketing to build a customer base. Larger firms enjoy central purchasing efficiencies and economies of scale in inventory management, customer service, and telecommunications. Smaller firms compete on outstanding customer service and providing niche products. The industry is capital-intensive: average annual revenue per worker is more than $1 million.

PRODUCTS, OPERATIONS & TECHNOLOGY

Although Internet and mail-order retailers sell a variety of products and services, some of the largest product categories are drugs, health, and beauty aids; computer hardware and software; and clothing. Many Internet and catalog companies specialize ...