Black Monday to Usher In the Holiday E-Commerce Season
On Nov. 28, office workers will return from the long Thanksgiving weekend and start surfing the Internet to buy gifts for the Christmas holiday, according to a survey released Nov. 21 by e-commerce company Shopzilla Inc. and Shop.org, a division of National Retail Federation.
The survey noted that 77 percent of online retailers said transactions spiked the Monday after Thanksgiving last year. The day has been dubbed Black Monday. It’s the online cousin of Black Friday, the Friday after Thanksgiving when bricksand- mortar retailers often experience their first flush of Holiday sales.
The phenomenon of the e-commerce market having its own start to the Holidays should come as no surprise. The apparel market has emerged as a significant player and ranks among the top five categories for merchandise online. Apparel is estimated to have grown to $12.4 billion in sales in 2005 from $10.2 billion, according to Boston-based technology and market research company Forrester Research.
Most segments of the apparel sector are actively involved in the game, and online merchandisers are becoming savvier on how to close a deal online, according to Lauren Freedman, an e-commerce consultant and president of Chicago-based The E-tailing Group.
The name of the game is better technology. “There are a lot more tools that help customers visualize the product,” Freedman said. “It’s changed the dynamic of apparel selling.”
One tool, for example, is the “zoom.” Online customers can zoom in on pictures of the product, which gives them a better idea of its details. And Internet marketing has become savvier. Consider the “style search,” which can help consumers locate and reserve a particular style of garment that may have eluded them while shopping the old-fashioned way.
The wider information revolution—such as online researching of everything from healthcare policies to the hippest denim label—has been a boon to Internet boutiques. Consumers often gather information about clothes through search engines such as Google and Yahoo. The Internet information-gathering trend has changed advertising for these online boutiques.
Few of them advertise through traditional media. Instead, they pay search engines for “pay-per-click” advertising, or for linking their Web site addresses to a specific brand or designer’s name. When a consumer uses a search engine for that brand or name, the company’s Web site will pop up. Google charges $.05 per click.
In some cases, search engines can deliver consumers to a business’ doorstep. Whenever someone puts the name Ron Herman in a search engine, RonHerman.com, the e-commerce Web site for the veteran Los Angeles–based specialty retailer, immediately comes up.
Ron Herman Web site manager Allison Samek said many of her customers are looking for the specialty store’s labels, such as Jet, the casual T-shirt brand design by Ron Herman buyer Jon Eshaya. This label’s retail price points are $50–$70. Jeans manufactured by Paige Premium Denim also sell well at this dot.com, and their retail price range is $150–$220. Other top sellers include vintage T-shirts by brands such as Doe, Rebel Yell and Trunk. Their retail price points are $30–$100.
Interstate tax breaks have also boosted the fortunes of online stores. Consumers don’t have to pay sales tax on items purchased from out-of-state Internet boutiques. The law is one of the reasons why Cynthia Rojas thinks her Marina del Rey, Calif.–based online boutique, ShopLAStyle.com, gets a significant amount of its business from women in New York and Florida.
Her top-selling items are the $40 classic tank by C&C California, the $96 silk charmeuse top by Rebecca Taylor and the $172 stretch “Joey” jean by True Religion.
A significant chunk of business conducted by Los Angeles–based Hotter Than Hollywood.com also comes from out of state, said co-owner Mary Helen Shashy. The tax break is important, but the women visiting the site are also looking for garments by California manufacturers that they may not be able to find in their areas.
Hotter Than Hollywood’s top sellers include Los Angeles–based Maggie Barry’s $235 stretch jersey dress, dubbed the “Sweetheart” dress. There’s the skull hoodie and velour pants by Ankh, also based in Los Angeles, which are respectively $150 and $110. Another top seller is Los Angeles–based A&G’s leather patch cashmere motorcycle jacket, which costs $550.
Although consumers get breaks on sales tax and often on shipping, online stores rarely get deals on prices for designer clothes. Designers’ sales representatives typically sell their products to online boutiques for the same price points as to bricks-and-mortar boutiques, according to the retailers interviewed for this article.
Online boutiques do their best business on weekdays, when people are sitting at work in front of their computers. However, business is slow when people have time to visit a bricks-and-mortar boutique. “Three-day weekends are not good for us,” Rojas said.
But she said that the online retailer typically experiences the same commercial cycles of boom and bust experienced by bricks-and-mortar businesses. Therefore, Rojas thinks the differences between her store and a boutique with real-estate overhead is slim indeed.
“I’m a regular boutique,” she said. “I just happen to be online.”
