2011′s Biggest Winners and Losers in Ecommerce
In-demand products, unparalleled site design and usability, competitive search engine marketing, continuous innovative, exciting holiday specials — these are just some of the variables that make up a successful ecommerce business.
On the other hand, some of the top pitfalls for Internet retailers include lousy service, uninventive products, confusing corporate messaging and ineffective advertising.
We’ve seen a little bit of everything in 2011. As the year wraps up, it’s the perfect time to recount the ecommerce wins and fails of 2011. Some strong houses continue to dominate this year, while previously lauded companies fell a bit from grace (cough, Netflix).
Let’s take a look at the winners and losers in online commerce for 2011.
1. Winner: Amazon
As the world’s largest online retailer, Amazon has been making great strides for years, and 2011 was a fun year to watch the company do its thing.
First and foremost, Amazon released a refreshed line of Kindle products, including the Kindle, Kindle Touch, Kindle Touch 3G and Kindle Fire tablets. Kindle devices continued to fly off the shelves all year — the company announced last week that it was selling “well over 1 million Kindle devices per week,” outpacing the launch of the original iPad in early 2010.
Though it has been met with criticism (and a software update to appease frustrated customers), Amazon’s Kindle Fire tablet is the retailer’s bestselling item ever, having only launched three months ago.
It’s not just the devices that are making waves in the market. Kindle books are a big deal for the company too. As of April, Kindle electronic books began outselling physical books on Amazon. For every 100 print books Amazon has sold, it has sold 105 Kindle books.
Amazon also celebrated a number of other milestones this year, including the introduction of Amazon Deals, Cloud Player, the Android App Store, MyHabit.com, the ad-supported Kindle 3G and the Mac Downloads Store, along with the acquisitions of The Book Depository and LOVEFiLM.
2. Loser: Barnes & Noble
With the weight of its brick-and-mortar stores, Barnes & Noble looks like it’s fighting a losing battle.
This year, its ecommerce site performed tremendously well. The Nook ereader drove digital sales. But the website’s increasing sales are no match for the total decline in revenue the company is facing.
Barnes and Noble’s November launch of the Nook tablet, the successor to the Nook Color, was a positive event for the company — the device received celebratory reviews and online buzz.
But one can’t overlook the fact that BN.com and the house of Nook are severely impeded by the retail stores’ extreme losses. Although I’d like to declare Barnes and Noble a winner this year for its feats in the tablet and ereader markets, I just can’t bring myself to reward mediocrity.
3. Winner: Apple
Apple introduced the iPad 2 and the iPhone 4S this year, basking in the glory of a full-fledged hype mill at each launch.
The iPad 2 helped drive sales of the iPad to 40 million units, since the original was introduced.
While the world would have preferred to see the iPhone 5, the iPhone 4S was received well, with record weekend sales of 4 million devices. Thanks to the iPhone 4S release, the company is on its way to selling a record number of iPhones this quarter.
Apple also set a new record for Mac sales in Q4 of 2011, having sold 4.89 million units.
4. Loser: HP
What is up over at HP? I can’t even begin to explain all of the horrible problems that company is facing.
It holds top market share in the PC market, with Dell and Apple following suit, yet it has no idea where it’s going. To WebOS or not to WebOS? Furthermore, to PC or not to PC? Those were the questions Meg Whitman finally helped the company answer after taking over for confused HP CEO Leo Apotheker.
After the failed HP TouchPad launch, the company is now out of the tablet business, but hopes to be back in the game by 2013. I’m sorry, that’s just sad.
5. Winner: Walmart
In August, Mashable‘s Christina Warren declared Walmart’s recently purchased online movie service Vudu a “bonafide hit.” For the first half of 2011, Vudu had 5.3% of the U.S. market, putting it in third place after behemoth iTunes and Microsoft’s Zune Video Marketplace. Vudu even eclipsed Sony PlayStation Store and Amazon.
Although it shut down its seven-year-old MP3 music store, Vudu, along with a few other Internet wins, places it on my winning list.
The retail giant is trying its hand at Facebook giving this holiday season, divvying up $1.5 million of holiday grants via the world’s largest social network with its 12 Days of Giving campaign.
And speaking of social media, Walmart’s social media strategy is top-notch when compared to other large retailers. It provides on-message, utility-focused videos on YouTube and showcases a team of 15 specialized tweeters via its Twitter channel.
Admittedly, I’m not a huge fan of Walmart’s animated Frank the Fruitcake Facebook spam, but its social strategy is going in the right direction otherwise.
And while we all love to dote on Amazon, Walmart is still the largest retailer in the world by a long shot, if you count offline business; and it ranks in the top 10 for online retail.
Walmart still needs to work on diversifying its online audience, though — a recent comScore report illustrated that 83.4% of Walmart.com’s visitors came from North America in June.
6. Loser: Netflix
Much of 2011 went quite well for Netflix, but all hell broke loose after the company implemented its 60% price hike in September. Shortly thereafter, CEO Reed Hastings apologized and announced that the company would be splitting its streaming video and DVD business, rebranding the DVD-by-mail service as Qwikster. Of course, Qwikster sounded like a stupid idea to everyone in the community, so that idea was qwikly abandoned in October.
As a result of all of the madness and confusion, the company’s stock plummeted and the company disclosed a loss of 805,000 subscribers in the third quarter.
Hopefully for Netflix this huge snafu will be forgotten in the new year — but that’s unlikely.
7. Winner: Gilt Groupe
Although it was only founded in 2007 and focuses solely on ecommerce, Gilt Groupe ranks in the top 50 Internet retailers, beating out household names like J. Crew, Scholastic, Crate and Barrel and American Eagle Outfitters.
Gilt Groupe has even broken the record for highest grossing revenue in Silicon Alley history.
This year has seen announcement after announcement from Gilt, showcasing the company’s ability to innovative quickly and to build upon its pioneering flash sale site model.
In May, Gilt raised $138 million in a round of funding, bringing it to a total of $240 million to date.
From there, it introduced its online culinary magazine Gilt Taste, an exclusive Facebook commerce offering and the relaunch of Gilt Home.
In November, Gilt Groupe began shipping to more than 90 additional countries (beyond its U.S. and Japanese operations), making it more global than ever.
Gilt also introduced its full-price men’s retail site, Park & Bond, in 2011, though performance is yet to be determined.
8. Loser: Sony
This year was difficult for electronics and entertainment giant Sony. The company is forecasting a $1.1 billion full-year loss, which would make its fourth straight annual net loss. So, what’s going on?
For starters, the strengthening yen, the unfortunate and lengthy PlayStation Network hacking affair, and declining LCD TV sales put the company in a bad place. Besides these more predictable problems, Sony also faced two natural disasters that hit its business badly, including floods in Thailand and the Japanese earthquake.
Sony, like its competitors, is facing difficulties adjusting to the ever-changing consumer electronics sector, and this year counts as another addition to its losing streak.
This post outlines some of the most buzzed about ecommerce stories of 2011. I could get into the nitty gritty of other companies — after all, there are hundreds of other Internet retailers out there in the green and red. But I’d rather get your thoughts on the industry.
Let me know your thoughts about this year’s biggest ecommerce winners and losers in the comments below.
Images courtesy of iStockphoto, desifoto, Flickr, Noelas, Walmart Stores
More About: amazon, apple, ecommerce, features, gilt groupe, HP, Kindle, netflix, nook, Opinion, sony, Year End 2011
For more Business coverage:
Follow Mashable Business on Twitter
Become a Fan on Facebook
Subscribe to the Business channel
Download our free apps for Android, Mac, iPhone and iPad