In fact, the growth of the ecommerce/online channel was the No. 1 retail issue reported by survey respondents, with more than 20% of those responding mentioning it when asked about key trends affecting retailing. Among the respondents who labeled the growth of ecommerce an important trend for the year, it was not viewed as exclusively positive: about a quarter also mentioned it in concert with comments about their bricks-and-mortar business shrinking.
Distribution Channel | Share of Market, 2015 | Share of Market, 2014 | Percentage Point Change, 2014-2015 | % Growth in Share 2014-2015 |
---|---|---|---|---|
Discount/Mass | 32.0% | 31.9% | 0.1 | 0.3% |
Online/E-commerce | 11.4% | 10.0% | 1.4 | 14.0% |
TV Shopping | 1.1% | 1.3% | -0.2 | -15.4% |
Mail Order | 0.1% | 0.2% | -0.1 | -50.0% |
Specialty Stores | 19.2% | 19.3% | -0.1 | -0.5% |
Department Stores/Mid-tier | 12.2% | 12.6% | -0.4 | -3.2% |
Grocery and Drug | 12.2% | 12.3% | -0.1 | -0.8% |
Variety and Convenience | 2.6% | 2.9% | -0.3 | 10.3% |
Dollar/Value/Off-Price | 9.2% | 8.8% | 0.4 | 4.5% |
Other | 0.3% | 0.7% | -0.3 | NA |
Mass, Grocery/Drug Edge Up
Mass/discount chains also saw their share rise, from 31.9% to 32.0%. While that translates to relative growth of only 0.3%, it is significant in dollar terms, since this channel has by far the largest share of market of any distribution tier.
Nevertheless, shrinking shelf space at mass merchants is an ongoing issue for licensed products. As major retailers become more risk averse, Target and Walmart may disproportionately support the biggest brands, executives said, making it hard for new or lesser known properties to claim shelf space. That makes Amazon—with its unlimited shelf space and expertise in selling “long tail” products—more important to niche products, even while some vendors remain wary of the ecommerce leader’s clout.
Grocery and drug stores slipped slightly, edging back to 12.2% in 2015, from 12.3% in 2014, with survey respondents pretty evenly split on whether the channel increased, decreased or remained flat.
Specialty stores fared similarly, sliding back to 19.2%, from 19.3% in 2014, 19.3%, amid conflicting opinions from survey respondents. This is likely driven by the wide variety of retailers in the specialty sector, as well as the omnichannel strategies of most specialty chains, which blur the lines between physical stores and ecommerce.
Even as e-commerce continued to grow over the year, both mail order and TV shopping saw their shares decline significantly. Mail order’s decline of 50%, from a 0.2% to 0.1% share, follows a multi-year pattern as e-commerce has largely replaced shopping by mail.
The decline in TV shopping was smaller, with the channel’s share dropping from 1.3% to 1.1%, a 15.4% decline. While there is an abundance of licensing activity on QVC and HSN, these outlets are also increasingly driven by e-commerce.
The variety/convenience channel also lost a fraction of a share point, falling from 2.9% to 2.6% in share, a 10.3% drop.
When asked about the incidence of direct-to-retail deals, about 40% of respondents answering the questions said that the deals are becoming more prevalent, often pointing to specific retailers (Kohl’s, Macy’s) and markets (Las Vegas) where the deals are proliferating. The same percentage, however, said they has did not know or had no opinion, perhaps reflecting the fact that such deals are specific only to certain property types and product categories.
Representative Retail Stores By Distribution Channel
Mass/Discount/Club/Big Box: BJ’s, Costco, Kmart, Sam’s, Target, Toys ‘R’ Us, Walmart
Specialty Stores: Ace Hardware, Barnes & Noble, Bass Pro, Bed Bath & Beyond, Best Buy, Cabela’s, Cracker Barrel, Dick’s, Forever 21, GameStop, H&M, Home Depot, Limited, Lowe’s, Michaels, Modell’s, museum stores, PetSmart, Sherwin-Williams, Sports Authority, Staples, Zara
Department Stores & Mid-tier: Bloomingdale’s, Dillard’s, JCPenney, Kohl’s, Macy’s, Neiman-Marcus, Sears
Grocery and Drug: Ahold, Aldi, CVS Caremark, Giant Eagle, Kroger, Meijer, Publix, RiteAid, Safeway, ShopRite, Walgreen
Dollar/Value/Off-Price: Amazing Savings, Big Lots, Dollar General, Family Dollar, Ross Stores, Save Mart, Supervalu, TJ Maxx
Online/E-commerce: Amazon, Café Press, Gilt, Zappos, Zazzle
Variety and Convenience: 7-Eleven, Circle-K
TV Shopping: HSN, QVC, ShopHQ
Mail Order: Oriental Trading, Signals
Other: Kiosks, on-site, vending, more