Retail

Online Retailers Stealing Bricks And Mortar Business

1. Gilt Groupe
> Product: clothing
> Competition: Bloomingdale’s, Bergdorf Goodman

Gilt Groupe is the dominant source for flash sales — limited-time, high-discount online sales. Before Gilt, short-term sales of high-end goods was a business dominated by stores such as Bloomingdale’s and Bergdorf Goodman. This is, of course, no longer the case. Gilt’s popularity will likely soon expand overseas, as well. As of November 2011, the company announced it is offering its services to 90 more countries.

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2. Apple
> Product: iPad/iPhone
> Competition: Best Buy, wireless stores

Although the Apple site only sells Apple products, it has become a major force among electronics retailers. This past Black Friday, Apple was the fifth-most trafficked retail site, according to comScore, after Target (NYSE: TGT), Best Buy, Walmart and Amazon. While many major big-box retailers carry Apple products, this year, it seems, shoppers opted to buy directly from the company.

3. Zappos
> Product: shoes
> Competition: Lord & Taylor

Zappos.com is the internet’s largest footwear retailer. In 2008, the company had $1 billion in sales. As with Diapers.com, Amazon recognized the site’s success — and potential for further success — and bought it for $1.2 billion in 2009. The site’s focus on customer service and popular deals — including free two-way shipping — have propelled it to the top of its sector.

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4. Steam
> Product: video games
> Competition: Best Buy

Steam has begun moving PC gaming away from traditional stores to online streaming, much in the way Netflix (NASDAQ: NFLX) did with movies. According to Forbes, only “Nintendo, Microsoft and Sony have larger footprints in the gamer community.” In 2010, the number of PC games sold via download outpaced sales of boxed games in stores for the first time ever, according to research firm NPD Group. In February 2010, Forbes reported that Steam controlled half to 70% of the $4 billion market for downloaded PC games.