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TMCNet: Luring online dollars [Ventura County Star, Calif.]

[November 08, 2009]

Luring online dollars [Ventura County Star, Calif.]

(Ventura County Star (CA) Via Acquire Media NewsEdge) Nov. 8--This holiday season, consumers plan to spend less -- so retailers are trying an array of tactics to get a larger share of their online dollars.

Online sales have become an important part of overall revenue for retail businesses, and the shopping season during the last two months of the year can make or break the bottom line.

To lure shoppers to their sites, companies are using the tried-and-true tactics of free shipping and online specials, but they also are testing the appeal of online layaway programs and gift guides. Some also are increasing their use of Facebook and Twitter. Target is even launching an iPhone application.

Online sales have grown in importance for retailers as the way people shop has changed, said Barbara Gross, former marketing professor at CSU Northridge.

"People have embraced it," she said. "A lot of people, especially around the holidays, have a pretty good idea what they want to buy for gifts ... it's easier to do online." Online they don't have to fight crowds and stand in line and can benefit from special deals, she said. Many retailers now send special offers directly to a shopper's e-mail address so all they have to do is click on the coupon and start shopping.

Retailers are afraid in the current economy that consumers won't shop and are trying to do things to make them comfortable with their purchases, she said. Something like free shipping removes a barrier to making a purchase, making it that much easier to commit.

"It's not realistic to think a family where one person has lost their job will buy no holiday gifts," she said, but noted they will probably trim back. "Retailers are fighting for that share of reduced consumer dollar." The National Retail Federation predicts a 1 percent decline in total sales to $437.6 billion in November and December.

Online sales, or "e-commerce," have been pretty dismal this year. In the second quarter, U.S. online retail spending totaled $30.2 billion, down 1 percent from a year ago, according to comScore. That's only the second quarter on record when e-commerce spending declined from the previous year.

Last year's results During the fourth quarter of 2008, online retail spending was 3 percent lower than the year before from Nov. 1 to Dec. 23, the last day to make a purchase to get delivery by Christmas Eve. The drop reflected five fewer shopping days between Thanksgiving and Christmas and the economic downturn.

Though sales were down, some retailers actually had more people visiting their Web sites last year in search of deals, comScore reported.

"Retailers know that times are tough, so they have created promotions and incentives to help Americans save money this holiday season," Scott Silverman, executive director of Shop.org, said in a statement.

Companies are using different approaches to try to stand out, he said.

Discounts and layaway Shop.org, a division of the National Retail Federation, runs the CyberMonday.com online shopping mall to highlight seasonal offers and sales from more than 500 retailers. Last year, the site had 2.4 million unique visitors and generated more than $5 million in sales on the Monday after Thanksgiving.

Specials include free shipping, "early shopper" and "first-time buyer" discounts.

Sears and Kmart are offering online customers the option of layaway for the first time this year in direct response to the recession and strong consumer interest in layaway plans.

Sears Holdings Corp., the publicly traded parent of Sears and Kmart, reports that Kmart had double-digit increases in layaway customers and sales in 2008.

Online-only features Online shoppers can layaway holiday items, calculate a payment schedule, make payments and view other contract details.

"We have an entire generation of customers that grew up shopping online," Mark Snyder, chief marketing officer for Kmart, said in a statement. "Launching online layaway engages these customers." At Target.com, "Deals of the Day" offer products at an average of 50 percent off regular prices -- in deals that are only available online for a single day and cannot be price-matched in the store, said Leah Guimond, a Target spokeswoman.

Target's iPhone app can be downloaded at Target.com and provides information on the retailer's Christmas promotions, seasonal alerts, interactive video and a gift finder.

She said the company also has features that make the shopping experience easier, including TargetList, a tool that lets users create and manage gift lists online and in stores.

To see more of the Ventura County Star, or to subscribe to the newspaper, go to http://www.venturacountystar.com.

Copyright (c) 2009, Ventura County Star, Calif.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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