For optimal user experience, please upgrade your browser.

Favorite 50 Retailers (2009)

Floating Widget

Floating Share Widget

Rank Retailer Headquarters Main Product
1 Seattle general merchandise
2 Bentonville, Ark. general merchandise
3 San Jose, Calif. auction
4 Richfield, Minn. electronics
5 Plano, Texas apparel
6 Minneapolis general merchandise
7 Menomonee Falls, Wis. apparel
8 Mountainview, Calif. information
9 Salt Lake City general merchandise
10 Hoffman Estates, Ill. general merchandise
11 Cincinnati apparel
12 San Francisco apparel
13 Sunnyvale, Calif. information
14 West Chester, Pa. general merchandise
15 Dodgeville, Wis. apparel
16 Freeport, Maine apparel
17 Atlanta hardware
18 Warren, Pa. apparel
19 Columbus, Ohio apparel
20 Mooresville, N.C. hardware
21 Indianapolis apparel
22 City of Industry, Calif. electronics
23 Hoffman Estates, Ill. general merchandise
24 Oakland, N.J. apparel
25 San Francisco online community
26 Sandpoint, Idaho apparel
27 Wausau, Wis. sporting goods
28 San Francisco apparel
29 Bensalem, Pa. apparel
30 Miami electronics
31 Viejo, Calif. electronics
32 Boston apparel
33 Eagle Pittsburgh apparel
34 St. Petersburg, Fla. general merchandise
35 Boston apparel
36 Issaquah, Wash. general merchandise
37 Little Rock, Ark. apparel
38 Las Vegas footwear
39 Cheyenne, Wyo. outdoor clothing,
40 Redmond, Wash. apparel
41 Cary, N.C. apparel
42 Grand Rapids, Mich. general merchandise
43 Bentonville, Ark. general merchandise
44 Los Angeles apparel
45 Sidney, Neb. sporting goods
46 Dulles, Va. information
47 Union, N.J. home decor
48 Boston general merchandise
49 Sumner, Wash. outdoor clothing,
50 Bensalem, Pa. apparel tops the annual STORES Favorite 50 online retailers list, followed closely by Wal-Mart, eBay, Best Buy and J.C. Penney Company. If the top five seem oddly familiar, you’re right; they’re the same merchants that ranked highest on this exclusive list a year ago.

Each continues to grab its share of headlines. Within the last two months Amazon “hooked up” with, then “broke up” with Target. eBay partnered with General Motors for a limited-time promotion that allowed California potential buyers to negotiate the purchase of a new car or truck from their sofas instead of the local showroom.

But the real news in STORES’ third annual ranking of consumers’ favorite online retailers isn’t necessarily about the list’s leaders: it’s about a palpable shift in the mindset of shoppers. Loyalty is taking a back seat to price, and shoppers are becoming agnostic about retail channels. Nowhere is that more apparent than in the first-time entry of

Craigslist, which debuts at No. 25, cut its teeth as a web-based provider of free classified advertisements but has evolved into a centralized network of online communities. Industry gurus wouldn’t characterize Craigslist as a retailer. Yet when BIGresearch polled more than 8,600 consumers in June, asking them which websites they shop most often for apparel and non-apparel items, the San Francisco-based company bested its well-known neighbor Gap (No. 28) and customer-favorite (No. 38).

Purists may wince at the thought of Craigslist being perceived as an online retailer, but they’d also have to acknowledge that industry graveyards are littered with the bones of those who tried to dictate to shoppers rather than listen to them. Most are willing to concede that it may be time to once again tweak the definition of retailing.

“For a growing number of shoppers it’s not about the retail channel or the nameplate over the door — It’s about getting the best price, wherever they can find it,” says Wendy Liebmann, CEO of WSL Strategic Retail. “After years of buying and selling on and similar sites, shoppers are comfortable bypassing traditional channels and buying something from a seller a few towns away.”

Current economic challenges, she says, “have profoundly changed shoppers and have made them more willing to find new, smarter options. The same person who grimaced at a garage sale 18 months ago is now willing to buy a gently used coffee table from someone 40 miles away – and for the privilege of buying it, he’s willing to pay cash and drive there to pick it up. They don’t feel badly about it or compromised in any way.”

There can be no doubt that part of Craigslist’s popularity among online consumers is closely tied to the new economy. It provides those who need to raise cash quickly with a free platform to sell and a wide audience. And, for those still spending, Craigslist represents an alternative channel that’s both a throwback to the way consumers once acquired most goods (bartering or buying from a neighbor) and a business model suited to the sustainable sensibilities of today’s shoppers and their new-found obsession with social networking.

The Favorite 50 also yields additional clues as to just how capricious the online consumer can be. A year ago, Costco ranked 26th on the chart, Kmart 34th. This year, it’s as if the two switched positions: Kmart climbed to No. 23, while Costco slipped to No. 36.

From the online shopper’s point of view, it’s likely that Costco’s more upscale web strategy has caused consumers to switch their allegiance – and more of their spending – back to the store. Living paycheck to paycheck is a sobering reminder of the need to stretch every dollar. With improved assortments and an easy-to-navigate website, Kmart provides a value-oriented option.

Other retailers that seemed to curry more favor among online shoppers in 2009 include women’s plus-sized retailer which jumped from 29th to 21st; No. 32 Chadwick’s, a specialty apparel shop with a value-oriented price structure that placed 40th last year; and, which rose 12 spots to No. 34. was not the lone newcomer to the 2009 Favorite 50. Others include (No. 27), (39), (42), (44), (49) and (50).

Interestingly, sporting goods and outdoor gear make up the lion’s share of the product offering at three of the six newcomers. Two play in the affordable fashion arena – one catering to the under-25 set, while the other targets the misses and plus-size shopper. General merchandiser breaks into the list with a combination of value and variety. — the only newcomer that qualifies as a strict online pure-play — is owned by parent company Foot Locker. In a classic case of the tail wagging the dog, it is the only name in the Foot Locker stable of brands to appear in the Favorite 50.

In February, Forrester Research projected that U.S. online retail sales would grow 11 percent (to $156 billion) by the close of 2009. While growth of any measure is to be celebrated given the funk that consumers have been in since last fall, the figures represent an overall slowdown from the recent past. Online sales grew 13 percent from 2007 to 2008 and by 18 percent in 2006.

Much of the slowdown in growth is tied to the sputtering economy. In July, however, and Forrester released the findings of the quarterly Online Sales Flash Survey offering an indication that the tide may be changing. Year-over-year top-line sales increases for the second quarter were reported by 59 percent of retailers polled; another 9 percent reported flat sales. The average quarterly growth for the retailers surveyed was 11.8 percent.

“Even as companies continue to struggle, the important take-away is that [e-commerce] is continuing to grow,” says Forrester analyst Sucharita Mulpuru. “It’s taking wallet share away from the rest of the retail world.”

Shoppers are accustomed to using the web to research purchases and pricing prior to buying – whether they ultimately spend their money online or in a store. And, in the coming months, e-commerce websites that provide transparency around shipping charges — particularly those that offer a flat shipping rate or establish a level of spending needed to achieve free shipping – are expected to be more successful at sustaining sales. Moreover, if gas prices continue to climb, the web will take on new importance as a means of managing costs.

The “State of Retailing Online,” an annual study conducted for by Forrester Research, finds that merchants are focusing their attention on basic merchandising tactics, scaling back their wish lists for the moment. Online retailers’ top five priorities, in order of importance, are redesigning the checkout process, improving product content pages and enhancing site search results, home page design and “help” sections.

Looking ahead, Forrester analysts predict that U.S. online retail sales will reach $229 billion in 2013, with the market expanding at a compound annual growth rate of 10 percent over a five-year forecast period beginning in 2008. No longer in the burgeoning phase of growth, experts believe the online retail market is on the brink of a natural, early phase of maturation.