California Apparel News

Despite a strong start, Web and online retailers ended the holiday shopping season short of the figures reached last year, when consumers spent $29.2 billion online, according to Reston, Va.–based Internet marketing firm ComScore Inc.

As 2008 progressed—with news of the housing bubble, credit crisis and a recession—overall spending began to decline. From Nov. 1 to Dec. 23, online sales reached $25.5 billion, representing a 3 percent decline from the same shopping days last year, according to ComScore.

“This marks the first time we’ve seen negative growth rates for the holiday season since we began tracking e-commerce in 2001,” said ComScore Chairman Gian Fulgoni in a statement. “The combination of having five fewer shopping days between Thanksgiving and Christmas and the severe economic headwinds faced by consumers has made this a really tough season for retailers, both offline and online.”

Despite the decline, e-commerce did have some of its best sales days ever in 2008. Dec. 9 ranks as the heaviest individual spending day of the season, with $887 million in sales; Dec. 15 ranked second, with $859 million, besting results posted on Dec. 1, Cyber Monday, which had $846 million in spending, according to ComScore.

Poor weather conditions in many parts of the United States in the final weeks before Christmas possibly helped online sales, encouraging consumers who had difficulty traveling to bricks-and-mortar stores to shop online instead, according to Michael McNamara, vice president of SpendingPulse, a division of MasterCard.

ComScore also compared its data for online with SpendingPulse retail data and found online spending outperformed offline in several product categories. Apparel and accessories ranked third, behind sports and fitness equipment and video games and consoles. Sales of apparel and accessories were up 4 percent online, compared with a 19 percent to 21 percent decline in overall sales of the category.

“Online sales this holiday season were much harder to come by,” said Vick Tran, director of online marketing and operations for Huntington Beach, Calif.–based contemporary fashion site 80’s Purple (www.80spurple.com). “Customers expected everything at a discount, and we had to push for them harder than ever. As an online retailer for mid- to premium-tier apparel, we have been fortunate in the past to see product sell-throughs of 70 to 90 percent before offering discounts.”

Many online retailers began to offer discounts well before the holiday shopping-season kickoff and during post-Christmas sales. “The online holiday season did start earlier than past years, as online sites offered aggressive discounts more than two weeks prior to Cyber Monday,” Tran said. “We had incentives anywhere from 10 percent to an unprecedented 35 percent during the holiday, and we gave away free gift cards with qualifying purchases, various shipping discounts and faster shipping upgrades.”

Incentive to buy

Perks such as gift-with-purchase and discounted shipping fees were seen across the board for e-tailers.

Los Angeles–based online fashion marketplace Shopflick (www.shopflick.com), a start-up launched in early 2008 that features video to sell products, redirected a portion of its site to appeal to consumers on a tight budget.

According to Co-founder, President and Chief Operating Officer Patrick Yee, Shopflick developed the “Sales Rack” portion of the site in late November. “We came up with a sales proposition and went to each of our designers. A lot of our designers were willing to do gifts-with-purchases. If we didn’t go with the ’Sales Rack’ or gift-with-purchase, we would not have been as competitive.”

Yee said he found Shopflick customers responded well to both the “Sales Rack” and the unique products it carries.

“Shoppers expecting different things and bargain hunting were twice as likely to shop the ’Sales Rack’ compared to the rest of the site,” Yee said. “One of the reasons why we are doing well is that spending less money on products doesn’t take away the intention of buying something unique with a personal story.”

Yee also said higher-end, “investment” purchases such as jewelry and accessories were doing well on Shopflick.

Accessories purchases may become a rapidly growing trend, according to New York–based market-research publisher Packaged Facts. The trend is expected to push the U.S. fashion accessories market to more than $16 billion by the end of the year, according to a report published Jan. 1 by Packaged Facts titled “Men’s and Women’s Fashion Accessories in the U.S.: Bags, Belts, Gloves, Hats, Scarves, Ties and Handkerchiefs.” Packaged Facts forecasts the overall fashion accessories market will reach $20 billion by the end of 2012, expanding almost 24 percent between 2008 and 2012.

For 2009, Yee predicts Web sites will weather the “larger macro-economy,” provided they stay ahead of trends, lower inventories to provide more aggressive price points and highlight differentiation.