The E-Tailing Explosion

Were you one of the estimated 20 million who made an on-line purchase this past holiday season? If so, you helped contribute to an estimated $6 billion in on-line holiday sales, of which approximately 18 percent were projected to be apparel. (Two years ago, the November/December holiday season pulled in just $1 billion in on-line sales.)

So who is shopping on-line and what are they buying? More importantly how do your products fit in? Those were the issues tackled by a panel of experts at the American Apparel Manufacturers Association's annual Economic Outlook seminar, held last month in New York, NY.

First, an overview of the landscape, as presented by Ken Cassar, an analyst for Jupiter communications' digital commerce practice.

* There are 100 million Internet users in the United States, and by 2003 there will be 157 million. Of these, 29 million are currently shopping on-line; by 2003, 85 million will be shopping on-line.

* Of the approximate $15 billion in '99 on-line sales, apparel represented $804 million. By 2003, on-line apparel sales are expected to account for $6.7 billion, or approximately 4 percent of the U.S. apparel market. (By comparison, in 2003, travel is expected to account for $16.6 billion in sales; PCs for $12.4 billion; and books for $4.9 billion.)

* The imbalance between the number of male and female on-line shoppers is lessening, with some 40 percent of women responsible for on-line sales in '99.

* The top three determinants in choosing among on-line merchants are: shopper was familiar with the merchant (51 percent); shopper made a previous purchase from the merchant off-line (39 percent); and shopper made a previous purchase from the merchant on-line (37 percent).

Perhaps reflective of its infancy in years (and sales dollars), the overall e-tail market will face a number of growing pains. As Lara Hodgson, a senior vice president and general manager with iXL Inc., put it: "There is a difference between a great site and a great retail site."

She noted that on-line users face many roadblocks in making purchases, from illogical arrangement of product to "hidden" cash registers. Moreover, related Hodgson, "Not many on-line retailers are doing well in fulfillment or customer service."

For example, in a study of 100 on-line retailers, Hodgson said her company discovered that presentation of products was extremely poor. Specifically iXL found that there often was no brand identification on packaging or boxes, no gift cards included, and that seemingly mistargeted product literature was tossed in with purchases. "There is a great opportunity on the back end for customer service, and it's not being taken advantage of," she emphasized.

Among the on-line selling features Hodgson recommended are:

* consumer access to real-time inventory data;

* filtered sizes (to help the shopper find his or her appropriate size);

* better search tools that enable the shopper to filter choices, make comparisons, etc.;

* a buyer loyalty program;

* live customer service (even if only during certain hours);

* a catalog "quick shop" (allowing the purchaser to go directly to an area where he or she can simply enter product numbers straight from a catalog to order);

* integrated marketing and fulfillment;

* wish list/gift registry and on-line gift certificates;

* multiple ship-to addresses;

* one-click ordering (simplified, easy paths to the cash register); and

* better cross-selling across products and channels.

Thomas Lesica, senior vice president and chief information officer for J. Crew Inc., agreed that balance across channels is prudent. Although founded as a catalog company J. Crew has both physical retail stores and an online store.

As Lesica explained: "From a catalog perspective, we know going into on-line selling [is] going to be cannibalization, but does that mean you rush off and stop producing [catalog] paper? In the end the catalog still has tremendous market value. We're trying to balance and ultimately leverage the three channels, because the consumer will change day to day Rather than assuming we can box them into a one-point solution, we're going to try to have the capability to market across lines and give them one customer experience."

You'll find more insight into e-commerce in this issue, but one last quick tip from the e-tailing experts: If your on-line resources are scarce, don't squander them. Instead, use them to support an on-line retail channel already selling your products or brand.

Susan S. Black is publisher of Bobbin.

COPYRIGHT 2000 Miller Freeman, Inc.
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