Back in the good ole' days when you had to schlep to the mall to buy your clothing or to the local supermarket to buy your groceries, it was always exciting when the L.L.Bean or J.Crew catalog arrived in the mail. Today, the internet provides 24/7 access to catalog-style shopping that makes those old mail catalogs look quaint, and the options for shoppers keep getting upgraded with each passing month.
Stitch Fix (SFIX -2.44%), Etsy (ETSY -0.86%), and Amazon (AMZN -3.09%) are some of the companies taking advantage of this change in shopping habits and even thinking beyond the now-traditional e-commerce box. Let's take a closer look at these three e-commerce disruptors.
1. Stitch Fix: Affordable personal shopping
If you weren't actually one of those people who relished catalog shopping, you might be more inclined toward Stitch Fix. The fashion company operates a differentiated model that uses artificial intelligence to determine what clothes a customer would like, and then it sends them a box of customized clothing selections, or a "fix," monthly or on a chosen schedule.
Image source: Getty Images.
Customers are gravitating toward the concept. As of Oct. 31 (the end of Stitch Fix's 2021 first quarter), the disruptive fashion company had 3.8 million customers, which was a 10% increase over the prior year.Sales in the first quarter also increased 10%.
As the company has grown, it has been learning along the way, and it now offers clients the option to buy pieces directly, as well as see details about their personal fixes before they get sent. Management thinks direct buy will be a strong catalyst for future growth.
Stitch Fix's stock price has spiked 362% over the past three years, but there's still plenty of long-term growth ahead as the company acquires more customers, expands its features, and disrupts e-commerce.
2. Etsy: Taking handmade mainstream
Etsy is another company succeeding with a customized model. This marketplace for handmade goods was the go-to destination for face masks during the pandemic when shoppers couldn't find them elsewhere, and mask sales helped overall revenue soar 137% in the second quarter at the height of the pandemic.
Image source: Getty Images.
But as the all-digital company gained momentum throughout the pandemic, it wasn't only masks propping up supersized growth. Non-mask buyers are what will keep the growth going, as they continued to purchase exclusive and handmade products on the Etsy platform, spending 50% more in the 2020 second quarter than new buyers a year earlier. Its largest category in the third quarter was housewares and home furnishings, which grew 126% year over year, and its highest growth category was beauty and personal care (up 164% year over year).
Etsy has many differentiating features from most other online shopping destinations, such as completely customized goods and a dynamic inventory.
Etsy's stock price spiked nearly 1,000% over the last three years. But even if you lost out on that incredible growth, you're in for some good news, because all indicators suggest it's far from over.
3. Amazon: The leader of them all
Shouldn't Amazon be No. 1 on this list? On one hand, Amazon represents traditional e-commerce (if there is such a thing). On the other hand, Amazon continues to innovate and change the landscape of digital shopping, and no list of e-commerce disrupters should be without it.
Image source: Amazon.
Amazon first revolutionized the industry when it metamorphosed from a not-so-humble online bookseller into America's largest online marketplace for everything. Some of its expansions include third-party sellers, Amazon Web Services, and Amazon Prime.
But there doesn't seem to be an area Amazon's not interested in conquering. It launched its own handmade segment like Etsy, It offers a service called Amazon Prime Wardrobe that mimics many of Stitch Fix's efforts, it's expanding its presence in physical grocery stores, and most recently, it took on pharmacies with Amazon Pharmacy. It's also changing how we shop, testing out drone deliveries and offering two-hour delivery for certain items.
Amazon's already high stock price gained an additional 137% over the past three years, and investors can expect Amazon to keep disrupting and keep rewarding shareholders.
