Tuesday, July 17, 2007

2006: more clothes than computers sold online

Maybe Americans don’t need dressing rooms after all.

For the first time since online retailing was born a decade ago, the sales of clothing have overtaken those of computer hardware and software, suggesting that consumers have reached a new level of comfort buying merchandise on the Web.

In 2006, revenue from skirts, suits and shoes reached $18.3 billion, surpassing that from PCs, printers and word-processing programs, which totaled $17.2 billion, according to a report by a major trade group.

The surging popularity of clothing on the Web defies predictions that fashion — which is hard enough to buy in stores, with the aid of sales clerks and fitting rooms — would be difficult, if not impossible, to translate onto the Internet.

The majority of shoppers, it was feared, would never abandon the habit of trying on clothes to assess the feel of fabrics and the fit of a given size, which varies a lot by brand.

“If you are looking for a sign that online retailing has really gone mainstream, I don’t think you can find a better one than this,” said Scott Silverman, executive director of Shop.org, the group that released the report.

Online retail executives said liberal return policies and better navigation tools on their Web sites, like the ability to zoom in on and rotate the images of a $500 handbag, have bridged the once wide gap between online and offline clothes-shopping experiences.

At the same time, the rapid growth of high-speed Internet access in American homes — now in about 50 percent of households — has made it possible for online shoppers to quickly download product images and complete a purchase in seconds, rather than minutes using dial-up services.

At Zappos.com, a popular online retailer of shoes, jewelry and clothing, free overnight shipping and free returns, with postage paid by the company, now make it possible for customers to treat the Web site somewhat like a bricks-and-mortar store, where they can try on and discard a dozen pairs of high heels.

Consumers are still largely reluctant to buy clothing online, at least compared with products like computers. In 2006, they made only 8 percent of all clothing purchases on the Web, compared with 41 percent of computers, 21 percent of books and 15 percent of baby supplies, according to the Shop.org report, which was prepared by Forrester Research.

But the clothing market is far larger than the others, which explains why apparel retailers are eager to refine their Web sites and win over new buyers.

There is a downside, though. Return rates for clothing bought online are about twice as high (14 percent) as other products bought on the Web, Shop.org said, giving retailers the cost of restocking and reselling merchandise.

Online apparel and footwear retailers are decking out their sites with a range of new features. At Timberland.com, shoppers can design their own boots right down to the color of the retailer’s signature tree logo. They can consult a detailed chart that converts sizes for customers in Japan, Italy and Greece. And they can spin, rotate and zoom into images of it.

“You can virtually pick up the product, giving you the essence of touch,” said Troy Brown, general manager of Timberland’s website. Sales at the site, started in 2001, have grown an average of 35 percent over the last three years.

A factor behind the strong growth of online clothing sales in 2006 was the start-up of several sites from prominent retailers. Gap created Piperlime, which sells shoes; Amazon.com started Endless, a site for shoes and handbags; and eBags created 6pm.com, another handbag and shoe site.

Shoppers who traditionally ordered clothing from catalogs are switching to the Web, a trend spotted by J. C. Penney executives, who run both Web site and catalog operations.

Customers now use the catalog “as a tool for online shopping,” said Richard Last, head of new business development for the department store’s jcp.com site. It reached sales of $1 billion in 2005, two years ahead of schedule, Last said.

Over all, online sales grew 25 percent in 2006, to $220 billion, including travel. Still, online sales represented only 6 percent of all purchases made last year, excluding travel packages and airline tickets.

But Shop.org, in surveying the state of the online retail industry, said the growth suggested that e-commerce “has come of age.” The report, which surveyed 174 retailers, said the young industry was in little danger of reaching a saturation point and abruptly slowing down. (info from The New York Times)

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