Last year marked the first time clothing retailers attracted more online shopping dollars than computer and software e-tailers took in, according to a report released on Monday.
Travel continues to eclipse all other forms of consumer spending online, however, accounting for US$73.4 billion in revenue in 2006.
Revenue for apparel, accessories and footwear bought through the Internet totaled $18.3 billion, compared to $17.2 billion for computer-related purchases, according toShop.org, the online division of the National Retail Federation. The group, in collaboration with Forrester Research, has been conducting annual online shopping surveys for 10 years.
The increase is part of an overall growth trend for online transactions: Business-to-consumer e-commerce grew 25 percent in 2006, reaching total revenue of nearly $220 billion. That sum is expected to grow again by 18 percent this year to $259 billion.
Consumers are expected to spend $22.1 billion online for clothing and related goods this year, compared to $20.1 billion for computers and software, followed by auto and auto part sales ($16.7 billion) and home furnishings ($10 billion).
Jumping the Hurdles
Retailers have helped customers jump some of the hurdles of online clothes shopping in the last year or two, Scott Silverman, executive director of Shop.org, told the E-Commerce Times.
Some of those hurdles are security-related, Silverman pointed out. Many customers remain reluctant to use their credit cards online, for example. The advent of the gift card that can be redeemed online has helped, as well as other alternative payment methods such as PayPal and Google Checkout.
In addition, e-tailers have taken away some of the uncertainty about making returns, Sucharita Mulpuru, senior analyst for the retail sector with Forrester Research, told the E-Commerce Times.
Increasingly, online merchants are allowing customers to return merchandise through the mail at no cost — or even return an item purchased on the Web to a brick-and-mortar store. This has eliminated customer worries over getting stuck with clothing that appears different from the images presented on a computer screen.
Web 2.0 Comes of Age
Airlines were early adopters of Web technology, with the first versions of online reservation systems hitting the Internet years before many retailers ever had an online presence. Since most online buyers know what to expect from an airline flight or a hotel stay, travel remains a realm in which shoppers feel comfortable conducting online transactions.
Finding clothing that fits presents a separate challenge. Thus, fashion and accessory retailers have turned to tools that allow them to offer “a more natural shopping experience” at their online stores, including comparison features and views featuring multiple products, noted Silverman. Many of these tools are based on flash technology.
Color swatching and the ability to zoom in on sophisticated product graphics and photographs have been key drivers, Mulpuru added.
Social Networking Meets E-Commerce
Until recently, one factor that did not translate well from the real world to the Internet was word-of-mouth recommendations. Last year, clothing and shoe retailers began to catch up with the social networking phenomenon, owing new patronage to Internet-posted customer reviews that have become popular on clothing Web sites, Silverman said.
It’s a big plus “to hear directly from other customers what a product might look like on them, or if it runs large or small,” Silverman stressed.
These types of reviews have been popular for some time on sites that sell books and electronic equipment, he noted. Their translation to clothing sites has gone a long way toward reducing reluctance among hesitant online shoppers.
I would add that not only are consumers becoming more comfortable with purchasing clothes online, but they are broadly becoming more comfortable with online shopping and the barriers for consumers to start their own online store are also coming down. There are several new sites popping up that enable people to start an online store fairly easily. I read a WikiHow article the other day on this at http://www.wikihow.com/Start-an-Online-Store