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Winning on the Web: Dramatic Change In How People Shop!

Consumers spent more money online for clothes than computers last year which was the first time that had ever happened. In fact, a report by the National Retail Federation's predicted that 10 percent of all clothing sales will occur online this year -- a dramatic change in how people shop.

What is the impact of this change on the housewares industry? Retailers are doing such a good job online that, in some cases, it's easier to find and buy apparel on the Web than it is in a store. That goes for cookware, electrics, cutlery and culinary tools also. Retailers often offer greater selections of these product categories on their Web sites than in their brick-and-mortar stores. And they've made increasingly sophisticated filtering tools available to consumers searching for certain types of specialty products. I've interviewed numerous cookware buyers who tell me that they've turned to the Web because it's easier and there is a wider selection. Online shopping lets them pinpoint exactly what they're looking for without roaming around an entire store. They like to browse through a variety of product categories, and they tell me they often end up making an impulse purchase online.

Not everyone is ready to purchase housewares they haven't seen and touched in person, and many consumers told me that they like to go to the store to see the displays and interact with people. They don't want the hassle of shipping back any products that they ordered online if they don't work for them. I believe that online shopping will become a larger overall component of the shopping experience but it won't replace in-store shopping -- a majority of people will still want to go to the stores. Despite its growth, online sales made up just 6 percent of retail sales last year. According to The 2006 State of Retailing Online, the ninth annual study conducted by Forrester Research of 174 retailers, 2006 online sales (including travel) were expected to rise 20 percent to $211.4 billion. Sales excluding travel will reach $138 billion.

What are retailers doing to increase online sales?As customers increasingly use the Internet to compare prices, find gift ideas and research products, retailers rely on their Web sites not only to sell merchandise, but also to increase sales at their stores. To create a true multi-channel environment, retailers are using a variety of different strategies.

More than two-thirds of retailers have consistent pricing across channels (79%), and almost half (46%) allow their customers to buy and redeem gift cards online and in stores. Additionally, a notable number of companies give customers the ability to accrue loyalty program points across channels (33%) and offer in-store product information online (26%). By encouraging different channels to work together instead of in isolation, everybody wins. In fact, retailers reported that 22 percent of offline sales are influenced by the Web. Web sites can also give retailers an opportunity to reach out to an entire new customer base, as more than one-third (38%) of online customers are new to a company's entire business.

What innovation is on the horizon?The 2006 State of Retailing Online concludes with an analysis of the future of online retail and says that retailers have spent much of the past year developing long-term forecasts, budgets, and personnel plans. These new initiatives are still in the planning stages and are expected to launch within the next two years.

Important Housewares Industry Statistics:* Cutlery - Half of all open-stock cutlery sold in the fourth quarter of 2006 was Santoku knives.* Dinnerware - The housewares dinnerware segment represented just over 80 percent of units sold in Q4 of 2006.* Cookware - Q4, 2006 cookware unit volume was 2,613,000 compared to dinnerware's 19,821.* Cooking Electrics - Q4, 2006 unit volume of 18,998,000.Market size and market potential are critical factors when designing your merchandising space allocation whether you go to market via an Internet store, a mail-order catalog, or a bricks-and-mortar retail store.

Marshall's "Hot Spots" Important Web -- Forrester Research is an independent technology and market research company that provides forward-thinking advice about technology's impact on business and consumers. With this resource, you can step back and plan strategies and prioritize technology investments for the -- is the association for retailers online. This resource can help you make smarter, more informed decisions in the evolving world of the Internet and multi-channel -- Check out the May 21, 2007, issue for the "Netroots Renewed" article about how alums from Howard Dean's Internet staff are helping 2008 candidates succeed where their previous boss failed. The strategies discussed in this article will inform you as to what's possible in the area of building a community on the Web.

Marshall Marcovitz is the founder and former CEO of the CHEF'S Catalog, a leading Internet shopping site. Currently, he is a lecturer, a university professor and a marketing consultant. He can be contacted at
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Author:Marcovitz, Marshall
Publication:Gourmet Retailer
Date:Aug 1, 2007
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