Online Shopping More Than a Passing Craze, Retailers Say

Like it or not, the holiday season is practically synonymous with shopping. And in recent years, more and more of that shopping is being done from the comfort of home, or the office, thanks to the Internet.

Not surprisingly, the media has jumped all over the trend, scrutinizing its every facet −from consumer deals to economic implications− as well as newer online retail phenomena, like Cyber Monday and Free Shipping Day.

After talking with local business owners −two ecommerce veterans and a newcomer− it seems one thing is certain: the number of people who point, click, and buy will only continue to increase.

“We don’t see the Internet losing any ground, rather, gaining steadily in usage− to research, purchase directly, and purchase and pick up in store,” says Mark Ballard, co-founder/co-CEO of Sugardaddy’s Sumptuous Sweeties, a specialty brownie gifting company that has maintained an online store since 2005.

Niki Quinn, co-owner of Tigertree, a men’s and women’s clothing boutique, and Daniel Fox, president of Skreened, which manufactures one-off T-shirts and apparel, contend that the tailor-made retail experiences consumers have on the Internet will keep online buying levels up.

“My mom, who hates the computer, has started calling me to find certain items for her online,” Quinn says. “She used to have to drive all over and make lots of phone calls to find items that she wanted in her small town. Now, she knows she can just order what she’s looking for!”

Shopping online is one of the great efficiencies of our generation, Fox says.

“There’s no driving around, no pressure-y sales people, and the Internet is open at 3 a.m.,” he adds. “Plus, it lets us do awesome things, like customize your T-shirts, instead of just buying the same thing off the rack that everyone else has.”

Tigertree launched a website for online transactions in the summer, but “only got a decent amount of inventory up on it this fall,” Quinn says. Meanwhile, Skreened has sold its merchandise online for 4.5 years.

Holiday shopping gets a lot of press, but perhaps the hype is warranted. Both Sugardaddy’s and Skreened boast record sales during that time.

Sugardaddy's Co-Founders/Co-CEOs Mark Ballard and Tom Finney oversee online orders in their production kitchen.

“For us, online  sales double during the holidays,” Fox says. “There are a few smaller peaks and valleys that occur within the seasons, but our big time is between Thanksgiving and about a week before Christmas.”

Holiday is the most significant time of year for Sugardaddy’s, says Tom Finney, the company’s co-founder/co-CEO.

“In fact, we do 32 percent of our annual online sales in November and December,” he adds.

This year, Cyber Monday, the Monday following the Friday after Thanksgiving, or Black Friday, was the best selling day in Skreened’s history. That is until the day’s sales records were broken two weeks later…and broken again a day after that.

“So, yes, Cyber Monday was the big kick-off, but not the biggest day of the season,” Fox says.

Quinn expressed a similar sentiment, saying that Tigertree did not see an increase in online sales on Cyber Monday, but certainly noticed a “huge increase” in sales since that day.

While  customers can and do place pre-orders online at the Sugardaddy’s site, the company catches the first wave of holiday orders in October with its holiday pre-order program and incentives, Finney says.

“Cyber Monday is geared more toward purchases of hard goods and soft goods, and retailers offering significant early-purchase discounts,” he continues. “Consumers typically wait to buy baked goods/perishable goods later in the holiday season, just before the needed date.”

If marketing events, like Cyber Monday or Free Shipping Day, and the online discounts and promotions that accompany them don’t necessarily spur online shopping, what does? Local retailers’ answers varied.

Skreened President Daniel Fox, right, catches a bundle of online orders.

Finney says holidays, particularly those celebrated in December, Valentine’s Day, Mother’s Day and Father’s Day, as well as special occasions, like graduations and weddings, generate upticks in Sugardaddy’s online sales.

“We have increased traffic when we have been good promoters for ourselves,” Quinn says. “Having items featured in the paper or on blogs, personal things that Josh [Quinn] and I are doing that get media attention almost always come with a Tigertree link. Even small things, like being good about keeping up with our Facebook, Twitter and our blog, can help drive traffic.”

Fox argues that each industry has its own set of conditions that change and affect consumer behavior.

“Business owners religiously try to attribute causes to random increases in sales,” he adds. “This is especially true when you’re new or not capturing enough data. All you can do is track the patterns, try to make educated interpretations of the data, and use that information the next time the cycle comes around.”

And if such a cycle exists, it is bound to continue, as both Ballard and Fox predict a bright future for online retail based on existing and expected consumer behavior.

More and more people are adapting to, and using, the Internet every day, Ballard says, adding that 37.7 percent of consumers surveyed for the 2010 Experian Holiday Marketer report chose the world wide web as the media they can’t live without. Only 21.6 percent chose television.

“Most of us run in social circles where almost everyone we know is involved online, but there are huge segments of the population −rich, poor, and middle class− who have yet to really get comfortable with the proposition of shopping on the Internet,” Fox says. “There’s an inevitability that those populations will get more comfortable, which will increase sales in ecommerce channels.”

Additionally, a generation coming of age now never knew life without the Internet, he says, and as members of that generation grow into their careers and find themselves with more discretionary income, we will see the effect of that spending benefit online retailers as well.

According to the aforementioned Experian report, the use of mobile phones to make purchases is up 13 percent, making them the largest growing sales channel.

“In the end, we believe multichannel businesses will win with their ability to capture customer purchases when and where the consumer chooses− in store, online, and on their mobile phone,” Ballard says.

All photography by Adam Slane.