To: ilh1 who wrote (422 ) 11/27/1998 1:01:00 AM From: ilh1 Read Replies (2) | Respond to of 1080
Retailers Expect Record Holiday Sales, With Big Boost From the Internet 7.32 a.m. ET (1232 GMT) November 26, 1998 By Gary Gentile NEW YORK — It's beginning to look a lot like e-Christmas. Cyber shopping is expected to generate as much as $3 billion in sales this holiday season , and that doesn't include the billions spent by shoppers who have researched their purchases online before heading out to the local mall. Retailers have stopped treating the Internet as an experiment and have rushed to establish an Internet presence for holiday shoppers. Such mainstream retailers as Toys "R" Us and Brooks Brothers have set up Web sites just in time for the holiday season, when as much as one-third of yearly revenues are earned. Even Macy's has created a virtual Herald Square on the Web, offering such popular features as a gift and bridal registry and free shipping for orders placed on the day after Thanksgiving, traditionally the busiest shopping day of the year. Every major study concludes that electronic commerce will continue to mushroom at a pace that can only be guessed. In fact, one of the key elements of America Online's purchase of Netscape Communications was an alliance with Sun Microsystems, which will develop and market Netscape's software designed to make Internet shopping safer. But don't think that city streets will be deserted while shoppers click their way through the holiday season. A major study done by the Boston Consulting Group shows that the majority of online revenues are generated by existing retailers that also sell through more traditional outlets — stores like Eddie Bauer and Lands' End. Another study conducted by CyberDialogue of New York finds that while millions will place orders online, many more shoppers will research their purchases over the Internet, then head to the mall to buy. "Online sales have been hurt by the 'Look but don't book, spy but don't buy' syndrome," said Jack Staff, chief economist at Zona Research, Redwood City, Calif. Research shows that shoppers will usually begin their online buying experiences slowly, taking minimal risks with items likes books and compact discs. Big ticket items are still mainly bought in person. "The high dollar stuff, people want to touch," said Wally Bock, editor of the Briefing Memo newsletter. "You're not going to buy an executive jet online." In fact, retailers, while quickly embracing the Web, are also bracing for a record number of flesh-and-blood shoppers this holiday season. According to an annual survey conducted by American Express, 39 percent of shoppers plan to hit the stores on "Black Friday," the name given by retailers to the day after Thanksgiving. That's up from 34 percent last year. The American Express Retail Index also found that shoppers will spend an average of $1,342 on holiday gifts, entertaining, travel and other expenses this year — a potential increase of 8 percent over last year. Electronic commerce will grow this year in large part because shoppers view it as a legitimate and safe way to do business . Much of this perception is due to retailers aggressively advertising their Internet presence in television ads. Traditionally, e-commerce retailers relied on Internet portals such as Yahoo! and AOL to drive business their way. This year, companies like Amazon.com and e-Toys have taken to the airwaves to get consumers to go direct to their sites. And retailers are also making their sites easier to use, rather than merely offering electronic versions of print catalogs. The Gap, for instance, allows customers to specify a price range for gifts and the gender of the recipient, then automatically generates gift suggestions. That kind of innovation can lead to a steady stream of online sales that extends past the traditional holiday season. "In most brick-and-mortar stores, you have sales dropping off after the holidays," said Staff. "That doesn't happen with online shopping . For the most part, people have a good experience and are up and running spending again in January, February and March," a phenomenon Staff calls "Play and stay." The truth is that no one can accurately predict the impact that electronic commerce will have on holiday shopping this year. Most researchers readily admit they are likely to be surprised by the numbers come January. "I think this is going to be a break-out year," said Bock. His prediction is part research, part hunch and part personal experience. "I recently talked to someone who said 'I'm going to do all my shopping online this year,'" Bock said. "This is a person who last year wasn't even online."