Shoppers Save Gas: Buying by the Click Instead of the Key

07/18/2008

The keyboard has become the car key of choice for many Americans when it comes to shopping. This means a trip to the mall means more than a splurge on a purchase, but a splurge on gas as well.

Some large retailers, e.g., Gap and J.C. Penney, are seeing double-digit sales growth on their websites. This is a welcome – and somewhat surprising -- source of revenue during a tough economy that many retailers are experiencing, especially brick-and-mortar stores.

Free shipping is one popular incentive many retailers are offering to encourage consumers to shop online. Many say that retailers are walking a tightrope by encouraging online shopping because it squirrels profits away from brick-and-mortar stores, which are important profit/loss indicators for investors.

On the flip side though, many experts argue that online traffic can drive offline sales. For example, if shoppers visit a physical location to make returns, retailers have a chance to sell to them.

Following is how some of the numbers shake out for different retailers.

Gap saw an 11 percent decrease in same-store sales in the first quarter. This was balanced by a 21 percent increase in online sales.

Victoria’s Secret experienced an online sales increase, primarily due to its catalog and Internet sales, which ticked up 11 percent in the first quarter of this year; same-store sales decreased by 8 percent.

Shoppers are flocking to sites that offer bargains. As an example, the number of Internet surfers to stop at what’s known as coupon sites jumped by 21 percent from June 2007 to June 2008, according to comScore, an Internet audience measurement company. The current uptick in online sales is a welcome bright spot for many retailers.

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