Retail Detail. Silver Lining: Online Holiday Shopping

November 5, 2008 • Shopping


There was an interesting article about online holiday shopping this season in today’s USA Today…

The Gap company’s stores have hardly been the hottest spots at the mall in recent months — or even years. But Gap Inc. online is a totally different story! Its online sales are
soaring. They were up 50% from 2005 to 2007, more than doubled in the
last five years, and are expected to hit $1 billion this year,
accounting for about 6% of total sales.

Why the difference? The answer lies
in the increasing appeal of the Internet and the steps Gap has taken to
capitalize on it. There’s more of a democracy in decision-making when a
shopping search site or Google is doing your browsing. When people rely
on retail preconceptions and feet to find what they want, they might
never stop at Gap or Kohl’s. But online, it’s all there for the

That’s a big reason, along with gas prices and
the Internet’s attraction to bargain hunters, that websites may offer
retailers their only cheer this holiday season. And it’s why retailers
are paying unprecedented attention to the Web.

Forrester Research predicts online retail sales
will grow 12% this holiday season
, the slowest growth to date but more
than five times the tepid 2.2% increase the National Retail Federation
predicts overall in November and December.

"The brick-and-mortar retailers who haven’t made
online a priority are going to be most challenged this holiday," says
Matt Poepsel, a vice president at Web experience manager Gomez. "If
their attention wasn’t on the Web before, it certainly is now."

Shopping online is growing in popularity because
not only have websites gotten better, but also people are getting more
comfortable with the concept., launched in the mid-1990s,
helped pave the way as consumers became enamored with fast and often
free deliveries. Now, some of the biggest growth in online retailing
this year is expected to be in apparel
. That’s partly because holiday
shoppers are focusing more on essentials. But it’s also because online
return policies are often more liberal than in the past (returns are
typically accepted at stores), and zoom views and improved photography
make it more likely that what you see is what you will get.

The Web has also become a haven for deals, which
is especially appealing in this economy.

The Internet’s attractions:

Retailers have been working all year to
encourage people to stay on their sites longer, buy more and maybe even
get the urge to jump in the car to hit one of their stores during the
holiday season.

Some of what you’ll see online:

Shipping deals. High fuel prices have
increased what retailers have to pay for shipping but haven’t prompted
them to abandon free shipping. This year, 78% of retailers told they plan to offer free shipping with conditions, such as a
minimum purchase, at some point during the holiday season. That’s about
the same share as last year. More than 20%, however, plan to require a
higher minimum purchase for free shipping, and about 10% are backing
off free shipping without conditions.

Bolder promotions. About a third of
retailers say they’ve added and improved clearance sale pages. Kohl’s
plans eight advertising "takeovers" of the home pages of sites
including AOL, MSN and Yahoo. Other retailers, depending on their
target, will go big or understated to attract online shoppers. You
can’t use big red "75% off!" banners if you’re a luxury retailer, says

Product reviews. About 33% of retailers
polled by said they have added customer reviews to their sites
since last year. While consumers are increasingly using and
contributing to them, however, you won’t find them on many single-brand
specialty store sites. Gap is trying reviews this season, but Lenk
notes it’s only for Piperlime, which sells many non-Gap brands.

Read "Retailers count on Web appeal for holiday shopping" here

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