Fashion Purchases Outpace Tech Buys Online
Shoppers losing their reluctance to use the Web to buy clothes, shoes, accessories
Online sales of clothes, shoes and accessories surpassed sales for computer hardware and software for the first time ever, pushing mainstream shoppers past tech-savvy consumers in terms of spending and encouraging retailers to continue expanding their presence on the Internet.
Last year, online sales of apparel hit $18.3 billion, compared with $17.2 billion for online computer hardware and software sales, according to Forrester Research, which conducted a study on behalf of the online arm of the National Retail Federation. Online travel topped the list, with $73.4 billion in sales.
Sucharita Mulpuru, an analyst for Forrester Research and lead author for the study, said that in the early days of the Internet, only a certain set of people ventured online to shop.
“Core buyers were tech-savvy young males,” she said.
Now the range of shoppers is more in sync with the general population. More than half of U.S. households regularly shop online, according to the study.
Many people have shed their reluctance to buy something they can’t touch or try on, especially as retailers develop more sophisticated Web sites that allow users to view images from different angles. Flexible return policies also encourage non-committal shoppers to give the Internet a try.
Nonetheless, online retail sales reflect a small fraction of the total U.S. retail market — 6 percent, excluding travel. Online sales for apparel, accessories and footwear totaled 8 percent of total clothing sales last year, compared with 41 percent for computer hardware and software, 29 percent for travel and 21 percent for books.
Mulpuru said that although retailers have improved their online presence, some glitches remain, such as delivery delays and site crashes. At the same time, shoppers still like to go into stores and see the merchandise up close. Many will do their research online and then make their purchases in the stores, although there are some who try on merchandise in stores and then browse the Internet for the best deals.
Kathy Sharpe, chief executive officer of Sharpe Partners, an interactive marketing agency in New York, said catalog businesses have had the easiest time moving onto the Internet because they already have the necessary delivery systems in place. Older retailers benefit from having a long list of loyal customers who can be persuaded to shop on store Web sites.
But startups have a chance to compete online where they may not have been able to offline. Sharpe said online retail allows new companies to compete with heavyweights like Macy’s because they do not need to have physical stores nor the staff to man them.
Traditional retailers with a large number of brick-and-mortar stores are beginning to realize the cost advantage of online shopping. Some, like Best Buy, Circuit City, Home Depot and even Wal-Mart, have been cutting back the size of their stores.
But Mulpuru said it is unlikely online retail sales will ever surpass those at brick-and-mortar stores.
“I don’t see that happening for a long, long, long time, if ever,” she said. “Touch and feel is still very important.”
What we’re ordering
– Online sales of apparel, accessories and footwear edged out computer hardware and software in 2006, $18.3 billion to $17.2 billion.
– Online retail sales grew 25 percent last year, to $220 billion.
– More than half of U.S. households now regularly shop online.
– In 2006, just 8 percent of apparel sales were made online, compared with 41 percent of computer hardware and software, 29 percent of travel and 21 percent of books.
