Online sales of jewelry and luxury goods are expected to see a 31 percent increase this year, according to the annual “State of Retailing Online 8.0” study by Shop.org, conducted by Forrester Research. The report predicts that in 2005, total U.S. online sales will reach $172 billion.

Led by cosmetics and fragrance sales, which are expected to grow 33 percent, women's buying habits are pushing the largest increases. Online sales of over-the-counter medications and personal care will rise 32 percent. Flowers, cards, and gifts are expected to rise 30 percent, the survey finds.

“Though initially adopted by men as a shopping tool, women are flocking to the Internet in droves to comparison shop, research, and buy,” said Scott Silverman, executive director of Shop.org, in a recent NRF release. “Online retailers who sell products that are purchased by women are in a favorable position this year, as we expect those categories to grow substantially.”

Multichannel retailers reported record gains last year, with online segments showing operating margins up 28 percent from 21 percent in 2003. Catalog-based retailers saw the strongest margins at 32 percent last year, a 4 percent year-over-year increase.

“With profitability behind them, retailers can now focus on innovation and growth through things like increased integration of their online and offline businesses and internationalization of their sites,” said Carrie Johnson, lead author of the report and principal analyst at Forrester Research, in NRF's release.

Increases appeared to be directly tied to search engine strategies, which emerged as the leading source for new online customers. In 2004, 87 percent of retailers surveyed used pay-for-performance search placement, doubling their spending over 2003.

Multichannel retailers reported that their Web sites drove 20 percent of in-store sales, indicating a direct benefit of multi-channel marketing and maintaining a high cross-marketing visibility between their Web sites and storefronts.

Last year, 92 percent of multi-channel retailers surveyed included URLs on in-store materials, up from just 77 percent in 2003. More than 80 percent promoted their stores on their Web sites, and 24 percent offered information on their sites about in-store availability of merchandise.


Source : nationaljeweler.com

www.nationaljeweler.com