The Top 500 apparel chain plans to expand its reserve online, pick up in store program, as well as its presence in China.
In tough times, web sales show strength
Online sales made a noticeable comeback in January, rising 2% from a year earlier and gaining share of consumer spending as total retail sales fell 5.8%. That compares to a tough fourth quarter of 2008, when online sales fell 5.8% year over year as total sales dropped 8.6%.
Coming off a tough 2008, e-commerce made a relatively strong comeback in January, rising 2% from a year earlier to $10.87 billion, according to comScore Inc.
Overall retail sales, excluding automobiles and auto parts, declined 5.8% in January, according to a preliminary report from the U.S. Commerce Department.
“E-commerce is outperforming on a relative basis the rest of the retail sector,” comScore chairman Gian Fulgoni said last month. “E-commerce clearly continues to gain share of wallet.”
Fourth quarter 2008 online sales fell 3% from the year-earlier quarter, but rose 6% for the year-off the steady double-digit increases of the past several years. In contrast, total retail sales fell 8.6% for the fourth quarter and 0.6% for the full year, according to the Commerce Department.
The relative strength in online growth is expected to continue, but retailers should be aware of several trends, Fulgoni says.
Upper-income consumers, for example, have reduced the growth in their online spending. In Q4, consumers with income of $100,000 and greater spent 17% more online than they did in Q4 a year earlier. In January, growth in that segment was 8%.
In addition, those same consumers indicated they are cutting back their spending. ComScore asked its consumer panel about spending plans in October and again in January. In October, 67% of $100,000+ households said they were cutting back their spending; that increased to 78% in January.
Consumers with $50,000 to $99,999 in household income, however, increased their online spending in January by 2%, after having decreased online spending by 10% in the fourth quarter.
ComScore data also shows that the state of the economy has made consumers more budget-conscious. In December online search activity related to coupons was up 157% over a year earlier and traffic to online coupon sites was up 46%, Fulgoni says. In addition, 76 million Internet users shopped at comparison sites in December versus 72.4 million a year earlier.
Fulgoni also reports an interesting swing in sales share by retail segment. In Q4 2008, 48% of online sales took place at sites operated by multi-channel merchants as opposed to web-only merchants. That proportion contracted to 44% in January. “It might present an opportunity to build business by increasing their focus on online throughout the year,” he says.