THE LAST WORD
From Retail to E-tail
By Erinn Morgan 

The past year has been rife with juicy stories about e-tailers� troubles. Layoffs, consolidations, and bankruptcies have all been part of the game. �Year 2000 was not so terrific for e-tailers,� says Stephanie Shern, vice chairman and partner at Ernst & Young. �And in 2001 we will see rapid consolidation in the industry, especially in pure-play e-tailers.� Given this situation, one would think that e-tail may be on the skids and that traditional �brick-and-mortar� stores have nothing to worry about. Think again. A recently released study from Ernst & Young shows quite the opposite. The results purport that consumers are very satisfied with their online shopping experience. They say they will continue to buy online in increasing numbers and spend more money in a broader range of categories. In fact, almost two-thirds of respondents purchased items online in the past 12 months. And compared with a year ago, the dollar amount people spent online either stayed the same or increased for 96 percent of them. The demographic of the online shopper is also beginning to look more like that of a �typical middle-class retail consumer.� One of the most interesting shifts is that women now make up 60 percent of all online shoppers in the United States compared to 50 percent one year ago. In the rest of the world, however, men still dominate the online shopping landscape. The experts believe the online shopper will only continue to spend more as Websites become easier to navigate, and product offerings become broader. The top product categories sold on the Net in the United States remain (in order) books, computers, and CDs. But apparel has made huge strides and now stands as the fourth-most-purchased category. This growth is attributed mainly to one thing that is making it easier for the consumer to trust the products they will receive without trying them on�brands. �What is working is brands, brands, brands,� said Mark Goldstein, president and CEO of Bluelight.com (the K-Mart Website) at a seminar held to release the survey results. �The consumer doesn�t need to touch, feel, or see it. They just understand it because of the brand.� The strongest effect of all the success for e-tailers will be seen at the store level in terms of traffic and sales. More than half of all shoppers say they visit the store less often because they shop online. Many agree that it is definitely a critical time for those retailers (including optical) with brick-and-mortar stores to invest in their business in order to compete against e-tailers. �Now is the time to make stores more compelling,� says David Bolotsy, CEO of UncommonGoods.com. �Add things that are a draw to the consumer, such as food and entertainment. For example, Barnes & Nobles does all types of community events that draw people into the stores.� Still, the future growth of e-tail seems assured. Nearly all U.S. shoppers (98 percent) who have already purchased items online plan to continue their online buying, and many plan to increase the dollars they are spending. By 2005, it is predicted that the online channel will represent 10 to 12 percent of sales in such categories as apparel, accessories, and toys. And in areas like books, music, videos, software, and electronics, it could represent as much as 20 to 25 percent of all sales. Bottom line: If you are not looking at the Internet as an additional retailing option for your brick-and-mortar store, it may be high time to do so. EB