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DJ U.S. Retailers Increase Their Focus on Online SalesOct 03, 2012 (Dow Jones Commodities News Select via Comtex) -- By Andria Cheng NEW YORK--The growing importance of online sales for U.S. retailers is leading major industry trade group National Retail Federation to publish its own online-holiday-sales forecast. "Online is important as a channel with exponential growth," said Vicki Cantrell, executive director at NRF's online arm Shop.org, in an interview. "It's seen double-digit [percentage] growth for years. It's a bright spot when retail struggles. It has to be looked at separately." Shop.org forecast online holiday sales to grow 12% to $92 billion to $96 billion. While still stronger than overall sales growth, that is down from a U.S. Department of Commerce estimate that last year's fourth-quarter online sales gained 15%. For the whole industry, NRF on Tuesday projected holiday sales will increase 4.1% to $586.1 billion, the smallest increase since 2009. The International Council of Shopping Centers forecast holiday comparable sales to rise 3%, also the smallest increase in three years, as consumers digest mixed economic news, fret about the U.S. presidential election and worry about the looming "fiscal cliff." Other forecasts also found that online sales were expected to continue to outpace the growth in in-store sales. Consulting firm Deloitte last week said it projected holiday sales from November through January to rise 3.5% to 4%. Non-store sales--with online representing three quarters of that total--were expected to surge 15% to 17%. Online sales are expected to increase to 10% to 12% of total industry sales this year, up from as low as 3% five years earlier, Ms. Cantrell said. "There's so much room to grow," she said. "As retailers perfect their multichannel offerings and delivery, it just continues to be a convenient and cost-efficient option for the consumers. That channel of shopping will continue to grow in the double digits [on a percentage basis]." However, as smartphones and other mobile devices lead shoppers to compare prices while in stores or browse online to do research before buying an item, it has become trickier to figure out which sales belong online and which are credited to stores. Home Depot Inc. (HD), for instance, credits e-commerce sales and profits to individual stores tied to shoppers' ZIP Codes, instead of counting them as separate, to give store employees' incentives to find products that may not be in stores. Retailers so far also have different reporting methods for their online units. Industry heavyweight Wal-Mart Stores Inc. (WMT), for instance, doesn't break out its online sales. Designer Ralph Lauren Corp. (RL), on the other hand, detailed its specific online-sales-growth rate. For this holiday season, mobile will be a key tenet of retailers' holiday marketing strategy as consumers increasingly use their smartphones to comparison shop. A Shop.org survey showed more than half of retailers are trying to make their websites easy to use on mobile devices. Mobile-influenced demand will represent 5.1%, or $36 billion in retail store sales this holiday season, as consumers use their mobile devices to do product research and price comparison, Deloitte projected. However, mobile and social media's direct sales impact on digital look to be small still, Citigroup said on Monday. "Retailers that welcome the smartphone shopper in their stores with mobile applications and WiFi access--rather than fear the showrooming effect--can be better positioned to accelerate their in-store sales this holiday season," said Alison Paul, who leads Deloitte's retail & distribution practice. "The mobile channel is a powerful customer-engagement tool, enabling retailers to capture a shopper's attention at the point-of-purchase, while gleaning valuable information about shopper behavior regardless of the shopper's location." Deloitte's research showed that shoppers armed with smartphones are 14% more likely to make a purchase in the store than those who don't use a smartphone as part of their in-store journey, she said. Brick-and-mortar retailers such as Macy's Inc. (M) also are trying different things to put their physical stores to their advantage. Macy's, for example, is expanding the number of stores that can have the capability to fulfill and ship online orders. Toys 'R' Us Inc., which created a hot-toy reservation feature for this holiday, requires that the reservation be made in person at stores. Free shipping is expected to remain as a big sales-driving tool. A Shop.org survey of retailers found that more than a third of them plan to increase their free-shipping offers this holiday season, compared with 57% of them who plan to keep them the same. Only about 6% of the retailers said they plan to decrease their free-shipping offers. Free shipping "almost becomes the norm," Ms. Cantrell said. Write to Andria Cheng at [email protected]. (END) Dow Jones Newswires 10-03-12 0749ET |