If your retail business isn’t set up for ecommerce, you don’t necessarily have to put up a headstone but know this: ecommerce is a global economic force right now and for the foreseeable future. But as much as consumers seem to be flocking to the online marketplace, they still have a host of concerns that every web store needs to address if they want to take advantage of the online marketplace.
In fact, worldwide online sales should see a 246 percent increase, from $1.3 trillion in 2014 to $4.5 trillion in 2021, according to Statista, the international statistics portal.
“When retail sales have been flat, online continues to grow,” says Gartner’s Jennifer Polk, research director. “The majority of U.S. sales are in-store, true, but ecommerce makes up a bigger portion and it’s growing at a faster pace.”
Polk says that since that’s where growth is coming from and that’s where consumer behavior is going, more retailers are investing in their digital commerce experience.
"When retail sales have been flat, online continues to grow"
“More retailers with physical stores are investing in omnichannel , whether that’s where they’re putting items in their cart and completing the transaction, or simply doing research and planning,” Polk says. “We’re seeing more and more traditional retailers investing in techniques like buy or reserve online/pickup in store. Even if a customer is in-store, they’re offering the ability to place an order for something that’s out of stock or not the right color and having it shipped directly to the customer. Retailers are trying to break down and overcome any barriers that consumers have had.”
These different service aspects serve as a reminder that apparel shopping is no longer a single-point experience. Even though most consumers (72 percent) prefer to purchase their clothes in a physical store, the majority likes to research (61 percent) and browse (51 percent) for apparel online, according to the Cotton Incorporated Lifestyle MonitorTM Survey. Also, most shoppers still prefer the remainder of their clothes shopping journey, which involves pre-purchase questions (66 percent), purchasing (72 percent), post-purchase questions (55 percent) and re-purchasing the same item again (55 percent), occur in a physical store
Further, MonitorTM research shows consumers under the age of 35 lean significantly more toward going online for all phases of the clothing shopping journey than those ages 35-to-70. For example, when browsing for clothes, 62 percent of the younger set prefer to go online versus 43 percent of older shoppers. And when it comes to actual purchasing, 34 percent prefer online buying versus 23 percent among the older group.
Scott Pletcher, general manager of products and innovation for Applexus, a technology services company, says several factors are at play that are making online shopping and purchasing more common.
“First, websites have gotten much better in how they present products, and they’ve created better online content with more detailed descriptions,” Pletcher says. “More images and the ability to really zoom in and look at details helps. Second, generous return policies such as free return shipping or easy return in-store lowers the perceived risk factor for shoppers. Third, most major retailers have invested heavily in creating a consistent experience across channels, to include inventory availability, pricing and promotional arrangements. While some consumers still enjoy the ‘treasure hunt’ feel of in-store discoveries, for the most part the online offering mostly matches what’s available in-store.”
Fourth, he says, generational factors are at play, too.
“Those who have grown up as digital natives see online as just another perfectly viable channel, and in some cases the preferred channel, as they can shop and purchase without a salesperson breathing down their necks,” Pletcher says.
Research shows consumers who prefer to purchase clothes online do so because it is convenient (66 percent) and easier than shopping in-store (53 percent), followed by better selection (49 percent) and avoiding crowds (46 percent), according to MonitorTM data.
Online shopping also fits the schedule of today’s time-crunched consumer. MonitorTM research shows 44 percent of shoppers are more likely to browse for new apparel in the evening/after work. That’s followed by during the day/while at work (29 percent), later at night/late night/once the kids are in bed (18 percent) and during the early morning hours/before going to school or work (10 percent).
When it comes to where shoppers are browsing online, Amazon easily leads the pack. The top three sites for online perusing are Amazon (52 percent), Walmart (23 percent) and Kohl’s (19 percent), according to MonitorTM research. Those same sites also top the list of sites where shoppers actually prefer to make an online apparel purchase, again led widely by Amazon (47 percent), then Walmart (22 percent) and Kohl’s (17 percent).
Polk says Amazon is increasing its footprint in the apparel marketplace for multiple reasons.
“It’s continuing to grow as a search engine,” she says. “It’s the first place people go to search even, if not last place for them to shop. They go to read reviews and browse. And while some may go to other sites for inspiration, like Polyvore or a designer’s website, they’ll go to Amazon to get it cheaper and faster. They’ll use Prime to get it in two days instead of waiting two weeks.”
Nearly 3 in 4 consumers (71 percent) say they shop Amazon for apparel, either for browsing or purchasing, according to the MonitorTM data.
Amazon both sells its own private label brands, as well as clothes from major designers and manufacturers. The luxury sector has largely avoided the site, save for beauty and accessories.
Pletcher says apparel manufacturers have always had a love/hate relationship with Amazon.
“On one hand, you want to be on the largest marketplace in the world,” he says. “On the other hand, Amazon will squeeze you hard for margin and you are potentially cannibalizing your own retail store or online assets. There are other marketplaces like Walmart, eBay and Google. But let’s face it, Amazon is the king by a long run. It is possible for a smaller brand to thrive without Amazon, if you’re not a commodity brand. Lifestyle brands that can build a sense of family and pride through direct-to-market efforts stand a better chance, especially where there is high emotional content in the buying process.”
But for any retailer to really grow its online business, it’s imperative consumers feel secure. When shopping for clothes online, more than a third (38 percent) say they’re more concerned now (compared to the last few years) about the security of their credit cards, followed closely by concern about personal information privacy (36 percent), according to MonitorTM research.
“Identity thefts are only becoming more common and that’s in the back of the minds of everyone completing an online transaction,” Pletcher says. “Every organization needs a Chief Information Security Officer (CISO) defined. It doesn’t have to be a dedicated role, but it should be someone who carries responsibility for that part of the business, which is just a critical as the role of CFO or COO. There should be carefully pre-scripted threat response plans, regular internal and external audits, and employee training programs. It’s no longer enough to just use password screen savers. We have terrorist organizations and state-sponsored espionage programs to guard against.”
A reminder that with the potential great reward retailers can gain from ecommerce, they need to be mindful of so much more.