Business Opportunities Weblog

July 31, 2008 by Rich Whittle | 1 Comment

The New York Times:

To go shopping these days, more Americans are trading in their car keys for a keyboard.

Online shopping is gaining at a time when simply filling up a gas tank to head to the mall can seem like a spending spree.

A number of retailers — including Gap, Victoria’s Secret and J. C. Penney — are experiencing double-digit sales growth at their shopping Web sites, creating a surprising bright spot during an otherwise gloomy time for sales in brick-and-mortar stores.

One popular strategy for getting shoppers’ attention is offering free shipping, in contrast to many other businesses, like airlines, that are adding surcharges and other fees to offset their higher costs.

“With gas being such an issue, we know that mall traffic is down more than off-mall traffic,” said Mike Boylson, chief marketing officer for J. C. Penney, which had an 8.7 percent increase in Internet sales in the first quarter of this year.

Retailers are walking a fine line in encouraging online sales. Of course, they are happy to attract more shoppers to their Web sites, but not at the expense of in-store sales — an important measure for investors.

Then again, the Web can drive in-store business, whether shoppers go into a store to return an online purchase or whether they buy an out-of-stock item through a computer at the store.

Online retail sales, often made all the more alluring by the lack of sales tax, have grown right from the start, but still represent a small percentage of total retail sales. And while e-commerce growth has slowed in the current economic downturn, analysts do not expect it to cease. In fact, online sales represent one of the only positives for many retailers.

Photo by J. Emilio Flores.

In Home, Internet, Shopping | 1 Comment