NPD: Apparel Leading Nonfood Buy at Retail

About one purchase in five, online or off, from general merchandise retailers involves apparel.

A Wal-Mart store.

Online and off, apparel dominates the nonedible portion of general merchandise retailing.

Steve Coffey, executive vice president and chief research officer of The NPD Group, told participants at the Marketing Science Institute’s seminar at the Fashion Institute of Technology in New York this week that more than one in five buying trips to a general merchandise store, and nearly one in five to an online destination, involves the purchase of apparel.

As part of its ongoing study of “The American Shopper Landscape,” NPD broke down the 19.3 billion shopping visits made annually in the U.S. between buying visits resulting in a purchase, of which there were 13.5 billion, and browsing visits which did not, accounting for the remaining 5.8 billion. NPD elected to focus on general merchandise retailers, ranging from Wal-Mart to small specialty stores and constituting 78 percent of shopping visits, to the exclusion of food and drug retailers, which account for the other 22 percent.

Because of the high concentration of food among Wal-Mart and other mass merchants, groceries and prepared food accounted for 34 percent of buying visits, followed by apparel at 21 percent. Beyond that, beauty products and pet supplies each drew 10 percent shares and health products 9 percent. Footwear, at 9 percent, was less than half the apparel number. Fashion accessories registered a 4 percent share.

Moving online, apparel led all categories with a 19 percent share of online buying visits with books, stationery and office supplies tied with consumer electronics or supplies at 11 percent each. Footwear had the fourth best share, but its 6 percent was less than a third of the apparel number. Groceries and prepared food came in at 4 percent, as did four other categories.

“Shoes represent a much smaller part of our purchasing repertoire,” Coffey told WWD. “Guys, especially, can wear the same pair of shoes to work every day of the week, but wouldn’t be caught dead wearing the same shirt to work every day. I think it’s just that.  Apparel includes many more articles than footwear.”

Because of the discretionary nature of many purchases made at stores selling apparel, their conversion rates — essentially the share of shopping visits that become buying visits — tended to be low in comparison to those carrying food or household items. The conversion rates for department stores and apparel specialty stores were 44 percent and 42 percent, respectively, while warehouse clubs led this category with a rate of 85 percent. Mass merchants were fourth with 74 percent.

Looking at dollars spent per buying visit, furniture stores led all specialty stores with $1,200, followed by jewelry stores at $294. Apparel specialty stores and shoe chains were tied for 13th place at $61. Among multicategory retailers, warehouse clubs led at $130, followed by department stores at $96 and national chains at $87.

Whatever its struggles in recent years, Wal-Mart overshadowed the competition with a 27 percent share of buying visits, followed by Target at 7 percent and a large group of stores at 2 percent — Target, Kohl’s, Home Depot, Dollar General, J.C. Penney, Costco, Lowe’s, Kmart, Sam’s Club and Macy’s. “All other” retailers held a 48 percent share.

Moving to e-commerce, the three highest shares of online buying visits belonged to Amazon, at 22 percent; eBay, 10 percent, and walmart.com, 4 percent. No other single retailer — pure-play or multichannel — reached the 4 percent level, although the aggregate contribution of a group of 13 “tier two” online retailers registered at 7 percent and “all others” at 45 percent.

The “tier two” group included the Web sites of Macy’s, Sears, Victoria’s Secret, Old Navy, Apple, Lands’ End, Avon, HSN and L.L. Bean. Womanwithin.com and fingerhut.com were also on the secondary list.

Although the pace might seem slow, Coffey pointed out that “brick-and-mortar retailers are making their presence known online.”

He also cited figures showing that, while shopping visits fluctuate from month to month, conversion rates do not, staying at about the 65 percent mark even as shopping visits hit peaks and valleys throughout the year. Of the 15 billion shopping visits made to general merchandise retailers in the year ended in April, 9.6 billion resulted in a purchase, for an overall conversion rate of about 64 percent.

“The buying behavior itself is rock steady,” he told the audience. “You have about a two-thirds chance of someone walking in the door then walking about after buying something.”

The study included data compiled through April. NPD has collected about 1 million online surveys monitoring weekly shopping habits a year since 2010.