BUSY BABY BOOMERS GOING ONLINE FOR APPAREL SHOPPING
Byline: Arnold J. Karr
NEW YORK — Baby boomers are starting to claim the Internet as their own private wardrobe closet.
That’s one of the suggestions of an in-depth study of online apparel purchases, provided exclusively to WWD by The NPD Group, a market-research firm in Port Washington, N.Y., which is slated to release the study shortly.
Buyers in the 35- to 44-year-old age bracket accounted for 41.1 percent, or $464 million of the $1.13 billion spent online for apparel in 1999, far outdistancing those in the 25-34 bracket, who spent $266 million, or 23.6 percent of the category’s online sales, and the 45 to 54-year-old boomers, who purchased $219 million of apparel on the Web, or a 19.4 percent share.
Why the heavy concentration of apparel buying among the 35 to 44 year-olds?
“The Internet is an opportunity for them to do their buying after their work and family responsibilities have been taken care of, even if that’s at 2 in the morning,” commented Mike Hand, president of NPD’s apparel and home textiles business unit.
This age group’s percentages may also have been boosted by their generally high comfort level with computers, as well as online purchasing they do on behalf of their children. In the study of 1999 purchases, children ages 13 and under made less than 0.5 percent of online apparel purchases, while 14 to 24 year-olds accounted for just 4.4 percent, or $50 million, of spending online for the category.
Older consumers generally have been slow to embrace online shopping for apparel, according to the NPD study, which revealed the 55-64 bracket produced a slim 7 percent, or $77 million, of online apparel sales last year; those 65 and older, only 4.2 percent of the sector’s volume, or $47 million.
“As more of these [older] consumers get online, and more of the brick-and-mortar retailers they know get online, their numbers are bound to go up,” Hand said. “I would expect the 55 to 64 group to move more quickly online, but there’s growth ahead for both segments.”
Hand pointed out that those with the strongest e-commerce presence in apparel — Lands’ End and Gap among them — were retailers with tight links to either young or middle-aged adults.
NPD expects online apparel purchases to double this year, to more than $2 billion.
Sales of apparel online reached the $1 billion milestone for the first time last year, but that represented just 0.6 percent of U.S. apparel dollars. In-store apparel purchases, by comparison, came to $163 billion, or 88.6 percent of all clothing purchases last year.
The NPD study shows that the growth in online apparel sales has been not only fast, but also accomplished with a minimum of price resistance and among the most coveted of consumers: the affluent.
Nonetheless, Hand has revised downward a prediction made last year that online apparel sales would hit between $13 billion and $15 billion by 2003, saying it will take longer to reach that level.
A typical item of apparel sold for $9.98 last year, according to the NPD study. However, the average Internet price-point for an item of apparel was nearly twice that amount — $19.40 — and more than twice the average in-store price of $9.47. Catalog price points for apparel items averaged $18.21 in 1999.
“Throughout the year, average prices paid in most categories through online and catalog purchasing were closely aligned,” NPD said, “and generally higher than the store price.”
The average e-tail price-point for tops — the classification generating the greatest number of online apparel transactions — was $21.99, versus $19.53 in catalogs, $12.67 in stores and $13.10 overall.
Outerwear’s average price was $40.28 overall; it was lower in stores, $38.53, and sharply higher both in catalogs, $54.65, and online, $59.34.
Not surprisingly, NPD’s research demonstrated that higher household income generally translated into a greater likelihood of online apparel buying. Purchasers with household incomes above $100,000 accounted for 31.9 percent of spending for apparel online; 19.1 percent of total apparel dollars can be traced to households in this bracket.
Households with incomes between $70,000 and $99,999 accounted for 29.2 percent of online apparel dollars, versus 18.4 percent of all apparel dollars.
In the three lower-income brackets studied, online apparel share amounted to less than the overall apparel share. Cybershoppers with annual household incomes in the $50,000 to $69,999 bracket generated 12.2 percent of online apparel purchases, more than five points below their overall apparel dollar share of 17.5 percent.
Households in the $25,000 to $49,999 bracket produced 27 percent of apparel dollars last year, but only 20.1 percent of dollars spent for the category on the Web. Households with incomes below $25,000 accounted for 18.1 percent of apparel dollars expended in 1999, but just 6.6 percent of clothing sales on the Net.
The Internet sales breakouts by age and income — with affluent boomers dominating the picture — offer a different purchasing profile from the norm for store and catalog spending, where expenditures are more evenly distributed among various demographic groups.
However, the timing of online apparel purchases last year offered few surprises, peaking in December at $266 million, followed by November at $220.2 million. In contrast, sales of apparel online hit their low point for 1999 in April, when they totaled $28.9 million.
Although December’s online apparel sales were a record for the category, they marked a decline in another barometer of purchasing studied by NPD. In November, the online share of apparel purchasing — 1.2 percent — was double the mark for the year, but retreated to 1.0 percent in the final month of the year.