Online shopping isn’t death knell for real-life retail

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Almost 10 years after Amazon.com went public, online holiday sales are still less than one-tenth of the total and probably won't ever eclipse the fun shoppers have going to the mall.

Take the experience of Anne Layne, who was shopping for her newborn granddaughter at the FAO Schwarz toy store in New York. "I'm a hunter and a gatherer," the 55-year-old from Washington said. "I need to see my products, touch them."

Jupiter Research in New York predicts online shopping will eventually peak at between 10 percent and 15 percent of total annual retail sales.

Such sales will break the $100 billion mark for the first time this year.

24% sales gain expected

Cybersales during the holiday season, the months of November and December, will climb 24 percent to $24.3 billion this year, according to comScore Networks, a Reston, Va., research firm.

 

Total seasonal sales, excluding online shopping, will increase 5 percent to $457.4 billion, said the Washington-based National Retail Federation.

Many shoppers go online to do research, then go to shops to see the products.

"Not everyone trusts they could get a good fit of jeans and shoes online," said Vikram Sehgal, Jupiter's director of research.

Retailers increasingly use their Web sites to drive store traffic, analysts said.

"There's the social aspect of shopping," said Heather Dougherty, a New York-based analyst at Nielsen/NetRatings. "To some it's an actual activity they'll plan on."

Views from many angles

Coach, the largest U.S. luxury leather goods maker, this holiday is allowing shoppers to view handbags from multiple angles on its Web site. The New York-based company also is promoting its flat $8.50 shipping rate and store-return policy for online purchases.

 

"We view the Internet as the Coach flagship store that you can visit at home or from the office," Chief Executive Officer Lew Frankfort said. "I saw it as a marketing vehicle."

Online sales, while the fastest growing, represent only 3 percent of Coach's total, Coach spokeswoman Andrea Shaw Resnick said.

More than 70 percent of consumers who visit Coach's Web site say it spurs them to buy in stores, Frankfort said.

Even for those who buy on the Web, there are certain things they'll always get in stores.

Vicki Easter, a 37-year-old restaurant owner from Front Royal, Va., said she buys just about everything online except clothes.

"You have to try everything on and see everything," said Easter, who was shopping at the women's apparel section at Macy's Herald Square store in New York.

The day after Thanksgiving, or so-called Black Friday, online traffic to retail sites rose 12 percent, a slower rate than the 29 percent gain last year, as retailers lured shoppers into stores with early openings and price reductions, Nielsen/NetRatings said.

Sales at U.S. stores open at least a year probably rose 2.5 percent in November, and may increase 3 percent in November and December, New York-based trade group International Council of Shopping Centers said.

Wal-Mart Stores, the world's largest retailer, advertised its Black Friday store specials on its Web site. As shipping deadlines approach later in the season, retailers advertise last-minute store promotions on their sites, Dougherty said.

"The offline world is never going to go away," said Dougherty. "Wal-Mart is OK with it if I purchase at Walmart.com or at its stores."

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