HOLIDAY: SLOW GROWING ONLINE
Byline: Valerie Seckler
NEW YORK — Slower growth is better than no growth at all. That’s the Christmas shopping tale as it’s now unfolding for fashion e-tailers, according to reports released Thursday by two of the country’s leading Internet measurement services, Jupiter Media Metrix and Nielsen/NetRatings.
Fashion e-tailers, among others online, are reaping low double-digit sales growth, on average, down from the high double to triple-digit gains they reaped the past few holiday seasons. The business-to-consumer crowd can find some cheer, however, in data showing more people are shopping the Web this holiday than last, with experienced cybershoppers spending more of their holiday budget there than in 2000.
The bottom line: A more frugal mind-set, rather than an abandonment of Internet shopping, is stymieing sales gains in cyberspace. Indeed, a key reason for the traffic pickup online is the ease with which shoppers can compare prices of similar items on the Web. According to Jupiter, customers visiting e-commerce sites in the first week of December surged 50 percent, to 52.4 million people, up from 34.9 million a year earlier.
“While [the first week of December] last year marked the downturn in holiday traffic to shopping sites, traffic continues to increase steadily this year,” noted Charles Buchwalter, vice president of media research at JMM. “A variety of deals and extended free-shipping incentives are contributing to shopping activity. And with many brick-and-mortar stores offering gift purchasing online and pickup in stores, it’s likely we’ll see more last-minute online shopping this year.”
As a result, Jupiter is sticking with its forecast that online holiday sales this year will climb 11 percent, to $11.9 billion, including travel services, up from $10.8 billion in 2000.
A similar stance was taken by N/NR, which said Thursday that online sales, including travel services, grew a relatively modest 10 percent in November, to $5.3 billion, its smallest percentage increase of the year. Still, that volume marks the year’s third-largest monthly total, after online sales of $5.6 billion in August and $5.4 billion in May.
Apparel is one of a few sectors earmarked for robust sales gains online (again) this holiday that have, thus far, failed to come through as projected, given the sluggish economy overall.
Joining apparel in the slower-than-expected online growth column, according to N/NR, are consumer electronics and toys.
Other sectors, in contrast, are racking up holiday sales gains of more than 50 percent, versus a year ago: health and beauty products, videos and home and garden goods. Further, N/NR found 42 percent of the November uptick online stemmed from travel services.
“Although the overall industry growth rate is battling a tough economy, the spoils of growth are going to key market players,” observed Sean Kaldor, vice president of analytic services at Milipitas, Calif.-based NetRatings.
That’s certainly been the case in the apparel sector, where OldNavy.com and VictoriasSecret.com recorded the seventh- and 10th-biggest percentage leaps in customer traffic, respectively, during the week ended Dec. 9, according to JMM. That week, the Old Navy online site had 256,000 visitors daily, on average, up 64 percent from the previous week, while the Victoria’s Secret Web site averaged 162,000 users a day, up 40 percent.
Apparel placed fifth among 10 e-commerce categories ranked by JMM as having the fastest-growing traffic, percentage-wise, for the first week of December. (That list was led by drugstore.com, whose 475,000 visitors represented a 228 percent increase over customers a week earlier.)
One wild card for fashion cybermerchants is the spectre of returns, already one of their biggest headaches. According to Boston-based researcher Yankee Group, roughly 40 percent of women’s apparel bought online is returned — about twice the rate at brick-and-mortar stores.
“Returns are a big concern for consumers thinking about buying gifts online in time for holiday deadlines,” said JMM senior analyst Ken Cassar. “With the ability to offer online purchasing and in-store pickup and returns, multichannel retailers are in a unique position to minimize the return concerns on the minds of many consumers. They should infuse this message across all promotions, especially in the [time] leading up to the holidays.”