Online retailers look to Web for holiday magic

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Just as the first holiday decorations begin creeping into the malls, retailers are readying the Web for what they expect will be the biggest online Christmas.

Unlike previous years, when online selling was barely beyond the beta-testing stages, retailers in 1998 have their online sales ducks lined up with sites prepared for greater volumes of incoming traffic.

"I think it's going to be explosive," Lauren Freedman, president of the E-tailing Group, Chicago, says of the 1998 holiday e-commerce season. Sales "could even potentially triple" from last year's estimated $2.5 billion. She estimates sales could reach between $5 billion and $7 billion this year. She also sees Web sales for consumer electronics on the rise, including TVs, stereos, etc.

Several factors are leading to this bullish outlook. For one, e-shopping has moved firmly beyond technology products and even sales of books and music CDs. This year, online retailers are ready with more apparel and items for the home, both of interest to women who are responsible for an estimated 70% of retail sales.

ONLINE REGISTRIES

Some of the strongest-selling holiday items, such as fragrances and lingerie, also are positioned well on the Web this holiday season. Estee Lauder Cos.' Clinique, Origins and Bobbi Brown lines are slated to begin selling online this fall.

Retailers also are trying to meet users' wants and needs through online registries and gift wish lists. These services have spread beyond the popular bridal and baby gift registries to lists of CDs that ordinary teens are hoping for on their birthdays.

Other online offerings include e-mail reminders of significant dates for which gifts are required for family and friends and replenishment services for basic items such as socks and underwear.

MACY'S, NORDSTROM JOIN FRAY

At the same time, several factors have bolstered consumer confidence in Web shopping. More established brick-and-mortar retailers are now open for business on the Web.

Macy's is preparing its macys.com site with almost a quarter of a million items available at start-up this fall. Federated Department Stores officials hope the site will bring the store to millions of Americans currently not living in markets where Macy's is located. Similarly, Nordstrom, with its reputation for quality and generous return policies, will be available to every hamlet across America via its site.

Holiday-theme movies talk of the miracle of getting wanted toys under the tree on time. This year for the first time, parents will have the help of the Internet Santa. Toys "R" Us, for example, is set to go head-to-head with mass merchandisers such as Wal-Mart Stores as well as online retailers such as eToys.

Even strong non-traditional retailers, such as cable TV's QVC with an online unit, IQVC, are also beefing up their holiday efforts. IQVC's 1998 Holiday Gift Boutique will open Nov. 1, three weeks before the traditional post-Thanksgiving holiday selling season, offering products ranging from a Nicole Miller tote bag to a Makita cordless drill/driver set.

BARGAIN HUNTING ON THE WEB

For those interested in bargain hunting, new sites such as Bluefly.com are offering shoppers an experience similar to that of outlet malls and off-price stores. Bluefly.com offers men's, women's and children's name brand apparel at up to 75% off, as well as MyCatalog, a feature allowing shoppers to build a personal list of items.

AOL GUARANTEES PRODUCTS

Also making online shopping more comfortable is America Online, which has taken some of the uncertainty out of online buying with its product guarantees. "For the newbie shopper, it's a guaranteed situation," Ms. Freedman says.

One of the biggest successes of the AOL program, she says, was a recent effort by one specialty retailer to offer merchandise for one day only for 20% off. "It's hard to do that in a catalog environment," she notes.

TECHNOLOGY ENHANCES EXPERIENCE

Technological improvements also are boosting catalogers such as Lands' End, which has added personalization features to maintain customer records of everything from measurements to credit-card data. The information will be used to offer selections of merchandise which looks better on individual physiques, such as men's shirts sized for tall men.

"It's an easier path to get to what they're looking to select," said Willie Doyle, marketing and strategic development manager for the Internet at Lands' End. The company also has joined with Amazon.com and others in offering to pay the $50 credit card liability fee if a customer has a problem with using his or her card to make Net purchases.

Another element of the mix is the move by online retailers to look beyond efficient order-taking and to begin to advertise in traditional media, not just online. The Gap's core Gap stores in late summer 1998 began advertising on buses in several cities for its online stores. The whimsical campaign for its Gap online store is tagged "Always open" and uses plays on tech words, such as "bootism."

At the same time, The Gap integrated its efforts with on-shelf signs among its jeans to tell shoppers they could find their size online if it wasn't available at that particular outlet.

EMPLOYING OFFLINE ADS

Although modest, the effort was among the first from a major retailer to push its online store beyond a Web-site address in catalogs, print and other ads. Another low-key approach includes printing a Web address on shopping bags, which J. Crew does.

Some online shops beyond booksellers Amazon.com and barnesandnoble.com, such as CyberShop, meanwhile, are believed to be considering a move into traditional advertising. Etoys, which advertises on cable, plans to increase use of newspaper free-standing inserts.

Boosting the move to advertising in traditional media, Ms. Freedman says, has been a disappointment with portal deals, in which online retailers were given exclusive space, most often in the portals' various shopping channels. Retailers were usually required to pay several million dollars for this space over a period of several years. The more exclusive the deal, the more money required.

"People are not seeing their [return on investments]," Ms. Freedman says.

LEVERAGING THE WEB BETTER

Meanwhile, other retailers are trying to make the Web work better for customers of their retail stores. For example, every garment purchased at a Virgin Clothing store comes with its own Web site address embedded in the garments care label.

The site not only provides information about the product, but offers tips on new purchases from the current season that would complement and update the older product.

Copyright October 1998, Crain Communications Inc.

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