California Apparel News

E-commerce beat its growth forecasts in 2006, according to a Shop.org and Forrester Research survey, &“The State of Retailing Online,&” which was released Sept. 18. The next question the survey authors asked was how e-commerce will continue to enjoy robust growth.

The survey initially reflected on some major achievements. The study&’s authors had forecasted that the e-commerce sector would grow by 20 percent in 2006. Instead it grew by 25 percent in the past year. The online sector earned $220 billion in 2006 and is projected to grow to $259 billion in 2007, according to the study. '

Apparel and footwear sales skyrocketed in 2006. For the first time in the survey&’s 10 years of existence, fashion e-commerce earned more than the sales of computers and software. Apparel and footwear earned $18.3 billion in sales in 2006. Online sales of computer and software earned $17.2 billion in 2006. The survey culled information from 170 respondents, and 80 percent of them reported profitability in 2006. Growth will continue to be robust. Online sales are forecast to grow by 18 percent in 2007.

One reason for the growth is that more fashion companies are doing business online. Reportedly more than half of American households do some shopping online.

However, e-commerce makes up only 7 percent of America&’s retail, according to the study. While consumers reported enjoying the online sector&’s competitive pricing and its 24-hour availability, e-retailers reported that overall consumer satisfaction lagged behind that of physical retail stores. The consumer missed talking with a store clerk.

According to the study, 33 percent of the survey&’s respondents intend to improve customer satisfaction by introducing a &“live chat&” element on their Web sites so that customers can talk with a salesperson.

Customer retention was an important element of the survey. Half of the respondents said they hoped to keep customers coming to their Web sites by offering customized products that are only available online.

Half of the respondents also said that they use their Web sites as a laboratory. One function of the sites is to test the popularity of a product before they place it in their physical stores.

The issue of returns surfaced as another important means to keep customers. Twenty-nine of the survey&’s respondents reported that they offer their customers prepaid return shipping.

The study also found that online advertising and marketing for e-commerce was increasing. E-mail was the most widely used marketing program. Forty-four percent of respondents said they spread the word on their Web site through banner ads.&—Andrew Asch