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WWD Year In Fashion issue 12/15/2008

So far, e-commerce is providing a shelter from the storm of the rest of a the retail world.

Since Thanksgiving, sales online have been doing well, with Cyber Monday marking the second-biggest selling day online ever (the first was Green Monday 2007). Sales were up 7 percent, to $4.45 billion, for the first seven days of December.

This story first appeared in the December 15, 2008 issue of WWD. Subscribe Today.

Online retail is projected to end 12 percent ahead for the year, though “the days of double-digit growth are over” after that, according to Forrester analyst Sucharita Mulpuru.

Online shopping has been relatively immune to the tidal wave of decline elsewhere because retailers and shoppers are still migrating to the relatively new medium. It offers convenience — a place to shop from work or home when stores are closed.

“Every day and every month, customers are turning to the Internet to shop, so we are adopting new customers and are coming at it from being a new business and a new way of shopping,” said founder Natalie Massenet.

The online shopper is not different from her off-line counterpart, but rather may very well be shopping in the stores on the weekend and online while at work or at home after her children are in bed. Or if she lives far from her favorite retailers, she shops online between trips. And interestingly, those who shop with any given merchant in more than one channel spend the most. (At Macy’s, for example, the customer who shops both channels spends an average of $969 annually versus $637 in the store only, according to the retailer.)

Most of the heavy hitters are now online, from Sears to Gucci. In addition, myriad local boutiques such as Oak of New York and Hejfina of Chicago and pure-play powerhouses of contemporary and denim apparel like Shopbop have found favor with women in search of special items not available at local malls. Even holdouts Chanel and Donna Karan have stores online, albeit for their lower-priced lines and beauty.

In 2008, Stella McCartney launched a U.S. cyber store, Pucci went online, Oscar de la Renta relaunched a grand salon with impressive graphics, Louis Vuitton started selling online in Italy and Los Angeles-based designer boutique Presse opened in cyberspace. Last month, Harry Winston started selling $70,000 snowflake-shaped earrings and $135,000 necklaces online.

But after more than a decade, the channel is finally maturing, which is why Mulpuru predicts slower growth in the years ahead.

With all the added competition on top of an economic crisis, it won’t be surprising if some early movers or small players close up shop or look for a buyer.

Meanwhile, retailers are exploring other platforms. Sears, QVC, Amazon and Ralph Lauren inaugurated shopping via cell phone, or mobile commerce, this year.

In TV, HSN has gone upscale with deals with Scoop, “Sex and the City” (to sell looks featured in the film), Sephora and Estée Lauder. It’s the fourth-largest cable network, with nearly $2 billion in sales, a highly visited Web site and tons of video content to watch online.

In September, QVC broadcast live from fashion week, including coverage of trends and footage of its own runway show of exclusive designs from Marc Bouwer, Chloe Dao, Bradley Bayou, Sara Campbell and Emmett McCarthy.

“Fashion is trendy, technology is even trendier,” said David Lauren, senior vice president of advertising, marketing and corporate communications for Polo Ralph Lauren, speaking of the brand’s forays into mobile commerce and Internet-enabled store windows. “This is more important than having Beyoncé in your ad. This is much more important than having any major actor. This got us more publicity than you can get with Brad Pitt.”

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