- The Washington Times - Monday, May 14, 2007

Computers appear to be losing their edge in the online sales arena.

Apparel for the first time surpassed computers — often considered a top seller online because technology begets technology — as the No. 2 selling item online last year, according to a report to be released today. Online travel sales remained No. 1.

“If you’re looking for a sign that online retail has arrived and gone mainstream, this is the sign you’d be looking for,” said Scott Silverman, executive director of Shop.org, the online component of the National Retail Federation. “With apparel now being the biggest online [outside of travel], online retail is now very much in line with offline retail.”

Overall, online sales jumped 25 percent again in 2006 — matching the 2004 and 2005 increase — to $219.9 billion, according to the study, conducted for Shop.org by Forrester Research Inc.

Online sales, which make up about 7 percent of total retail sales, are expected to increase 18 percent this year to $259.1 billion.

Shop.org and Forrester attributed the increase to retailers making their Web sites easier to navigate and the fact that about 50 percent of U.S. households now have high-speed Internet access.

Online shoppers used to be mostly male and mostly affluent. Now the male-female ratio is about 50-50, and online shoppers reflect broader income levels, said Sucharita Mulpuru, a Forrester Research analyst.

Apparel, accessories and footwear hit $18.3 billion in online sales last year, a 61 percent jump from 2005.

Retailers have made it easier to shop online, designing Web sites so shoppers can view multiple colors and styles at the same time, or immediately see if an item is in stock.

“Retailers are systematically addressing the different hurdles for customers to buy online,” he said.

Shoppers were quick to go online to buy items such as books or computer parts because they typically knew what they needed and didn’t need to browse. But they weren’t so trusting when it came to items such as shoes, purses or sweaters. They still wanted to see whether different colors would go together or to touch the fabric. And for the most part, shoppers didn’t want to risk the cost to ship an item back to the retailer if it didn’t live up to the online description.

Retailers have wised up to this, Ms. Mulpuru said.

“We’re seeing more of a focus on reducing that friction,” she said, pointing to Zappos.com, Gap Inc.’s Piperlime.com and EBag’s 6pm.com sites, which promise free shipping on returns.

Free shipping on returns eliminates the fear that a shopper would end up paying postage if an item didn’t fit. She attributed this change to apparel’s online-sales spike.

The online-apparel category is expected to reach $22.1 billion this year and make up about 10 percent of all apparel sales, according to the report.

Sales in nearly all other retail categories increased last year, except food and grocery sales, which fell 8 percent. The group attributed that fall to several grocers that diverted their focus away from their Web sites and back to the competitive brick-and-mortar shops.

Online travel sales, the No. 1 online category, rose 17 percent to $73.4 billion.

Computer hardware and software online sales rose 20 percent to $17.2 billion last year. But when combined with computer peripherals, the group rang in $18.7 billion.

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