Though big-name retailers are taking steps to improve these handicaps—by making it easier to buy merchandise seen on Instagram, for example—companies that are just getting started have a natural advantage, Lobaugh said. Not only are they able to build business models that cater to the way today's consumers shop, but they're also more aggressive in chasing what major retailers consider a small piece of the pie.
"I feel bad for them [big retailers] sometimes," said Claire Chambers, CEO of New York City-based lingerie shop Journelle, while speaking on a panel in Manhattan last month. "There's a lot more to change."
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Whether it's an online-only retailer, who doesn't pay rent, or a grocery delivery service that doesn't even own its products, the rise of digital retail has become the equivalent to "death by 1,000 paper cuts" for the big guys. From 2009 to 2014, the top 25 retailers by revenue lost 2 percent market share, or $64 billion, with little pieces of business going to the smaller players, Lobaugh said.
"The barriers to entry in retail have come down," Lobaugh said.
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In a recent note to investors, Wells Fargo analyst Paul Lejuez also argued that sales growth on the Web "does not tell the whole story" for traditional retailers.
"While many retailers boast about their strong sales growth in [e-commerce], few highlight that it is often coming at the expense of store sales," he said. Although that's better than losing out to a competitor, Lejuez said, the shipping and return costs that accompany online sales often eat into the firms' profits.