Originally written: February 21, 2012, Updated January 2022
Major retailers are more concerned with the sales traction you have built either on your own DTC platform or in other brick and mortar stores. The more established those stores are, the more impressive your sales results — because it is a direct translation to how your brand would perform in their stores. For DTC, the greater your LTV and AOV are on your DTC site, as well as your annual sales and growth rate, the more interested brick and mortar retailers will be.
However, selling in a .com may be helpful in the following case:
Many large stores have .com sides to their business. For example, Target has Target.com and Walmart has Walmart.com. In these situations, it can sometimes help to first get into the .com side of the business. By doing so, you can prove – using Target as an example – that Target shoppers (at least the online Target shoppers) have an appetite for your product.
Once in a while, those Target or Walmart store buyers will scan the list of their company’s .com products to find hot-selling items that are not being carried in stores. In exceptional cases, they will bring those items into their store assortment. So in this scenario, it is conceivable that you can win a place at shelf by selling to .com first. But this is more so the exception than the norm, so I would not recommend this as part of your sell-in strategy. Your best sell-in strategy will always be to prove your sales in other stores first or on DTC before approaching the top-tier stores.
Ultimately, selling at .com will not hurt you – as it helps drive your company sales and profitability, as well as discoverability. So why not do it?! Just be smart about it and make good choices:
Make sure your .com retail prices do not undercut your brick and mortar retailers.
Make sure not to over-proliferate your e-commerce presence. Spreading your brand across too many online retailers will only spread your sales thin. Funnel your online sales into 2 to 3 influential online retailers to ensure each one gets their share of strong sales. This helps avoid sales cannibalization which does no one any good!
Retain as much control over pricing and your listing as possible, although this may be hard outside of Amazon and your own online store.
Updated 7/27/15: Currently all retailers are working on integrating online, stores, mobile into one integrated experience called "omnichannel". Stores will develop workflows that mirror how consumers shop - beginning their shopping journey with mobile/online research and ending with in-store purchases. In some cases, consumers will purchase using online ordering and in-store pickup. As retailers' strategies change, you can expect to see more synergies between store buyers and their .com counterparts.
Generally .com sales amount to anywhere from 3% to 10% of total online/store sales (update: now approaching just under 20% of total U.S. retail sales in the pandemic era of 2021). So for example, if you sell $100,000 per year at Target and Target.com collectively, your Target.com portion of that may only account for $3,000. And while online sales penetration is growing, it will never overtake the share of in-store sales. That's a fact, not an opinion.