Q+A: WWD: When will apparel sales reach critical mass online?
Stephanie Shern, global director for finance, retail and consumer products, Ernst & Young: “First, we need to examine: ‘What is critical mass?’ If we look at an analysis of apparel sales in 1999, it is interesting to note that after the 100-plus years merchandise catalogs have been in existence, that channel’s ‘critical mass’ has only reached roughly 15 percent of the apparel category’s volume.
“I believe the online channel will be bigger and more powerful than the catalog channel. I believe this will be true for apparel also, but I do not believe the Internet will take the place of store-based retailing.
“I estimate that online apparel sales will reach about 7 percent of total apparel volume by 2003. I don’t believe we will see online apparel sales approaching 15 percent of the category’s total before 2008 — and that will depend on how quickly retailers and brand-name manufacturers will allow the online channel to become a significant force. “Many of you may have seen Chanel’s pre-fall launch online in partnership with Vogue magazine recently. I, for one, was very excited to see this development, and I see it as a sign of events to come.
“However — and this is a big caveat — the online preview was disappointing in that the volume of merchandise offered was very slim. Few items were shown from which to make your selections, and this is typical of what we are seeing so far online from most fashion companies. Choices and styles are limited, leaving the customer without the same wonderful experience of visiting a brick-and-mortar store offering the brand.
“When online merchants, be they retailers or branded manufacturers, use the same good basic marketing and merchandising principles they use in stores and catalogs, like great displays (quality) and a good selection (quantity) of the brand, I believe you will see faster and more dramatic growth of sales online.
“This will never take the place of the thrill of browsing in a store and finding that new designer or brand. But for brands you know and love — and would buy in a heartbeat without having to go to a store — the online channel offers a wonderful alternative.”