E-Tail’s Comeback Kids

When Furniture.com folded one year ago, many saw the end of online retailing for furniture. And six months earlier, when Boo.com became the first truly high-profile example of the e-commerce shakeout, serious questions were raised about whether consumers would ever buy clothes online in significant numbers.

But time marches on — and both sectors are holding their own.

For example, online furniture sales more than doubled in September to more $61 million, according to Forrester Research (Nasdaq: FORR). Forrester analyst Carrie Johnson attributed the sharp increase to a shift in consumer focus to stay-at-home purchases in the wake of the September 11th terrorist attacks.

“Increased spending on home goods and entertainment suggests thatconsumers are turning their homes into havens of comfort,” Johnson told the E-Commerce Times.

Meanwhile, clothing sales are expected to help power a relatively strong e-commerce fourth quarter. According to Jupiter Media Metrix, 30 percent of online shoppers plan to buy clothing over the Web during the holiday season, making itthe second most popular category behind books-and-music purchases.

Not Pure Play’s Day

“What you’re seeing is that the success of e-commerce is different fromthe success of any given e-retailer, especially pure plays,” Gartner G2 research director David Schehr told the E-Commerce Times. “The presumption once was that you would find shoppers, attract them and sell to them all online. We know now that’s not the best model.”

In other words, said Schehr, just as consumers have become more savvyat using the Internet as a way to approach a spending decision, companies have grown by leaps and bounds when it comes to using the Internet as one of many channels used to close the sale.

“Boo blew up because they thought one-dimensionally,” Schehr said. “Enter old catalog companies like Lands’ End and even JC Penney and they pick up where Boo couldn’t go.”

Shopping Matters

Schehr believes that Boo also underestimated the value of the in-store shoppingexperience, something that no amount of bandwidth can replace.

The difference is also one of perception of the online buying experience, said Schehr. Early pure-play dot-coms like Boo and Furniture.com assumed that shoppers could be found, attracted and sold — and that all of that activity would take place online.

However, as those sites faded out of the picture, into the picture flooded retailers with a presence in other retail channels, not just the Internet.

“We’re starting to realize that for consumers, the road to a purchase is amulti-lane superhighway,” Schehr said. “They might change lanes a fewtimes, going to the Web for information first, going into the store to trysomething on and then going back to the Web or the catalog to buy.”

Complicating Factors

While furniture and clothes have both managed strong comebacks for online sellers from the days when their obituaries were being written, just how far they can go remains to be seen.

Furniture sales via the Web remain a particularly bold question mark, as the overall industry expects a slowdown in spending after several years of economy-fueled growth, and as nagging doubts about shipping and returns for couches and chairs go unanswered.

“There may still be some things that don’t sell on the Web,” said Schehr.

The analyst singled out high-end e-tailers like BlueNile.com.

“I think expecting people to buy a multi-carat diamond that they’ve never touched or seen in person is a bit of stretch,” Schehr said. “But who knows?”

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