Apparel E-Commerce and the Collapse of Big Box Retail

Apparel-Ecommerce.jpgPeople are buying stuff more than ever. They’re just increasingly choosing to do so from home in their skivvies. This rise in e-commerce is absolutely killing certain sectors of the retail industry. Just take a look at Best Buy's ongoing slow-motion collapse.

According to Moneybox:

The bottom line is that while Best Buy is no doubt facing some firm-specific challenges, the big story is broad sectoral decline of this sort of retailing. Under different circumstances, Circuit City going bankrupt would have been good news for Best Buy, and Borders' liquidation would have been good news for Barnes & Noble. But when your competitors go bust because your entire industry segment is collapsing, you have a different kind of problem on your hands.

Now it’s important to note that apparel retailers will likely always be immune to this sort of collapse – for obvious reasons. Simply put, while there’s rarely a need need to try out, say, a CD or DVD from a big box electronic retailer like Best Buy or Circuit City before buying (thus making e-commerce more feasible), many apparel shoppers will still prefer to try on outfits before making a decision.

But still – as we mentioned a month ago – e-commerce is returning in a big way, and it’s becoming an increasingly large part of the apparel industry as well.

According to Internet Retailer:

Online sales in the United States of apparel and accessories will increase 19.7% in 2012, to $40.90 billion. The research firm projects a higher growth rate for apparel than for any of the other nine product categories it breaks out in its e-commerce forecast.

"Retailers continue to increase the scale of their e-commerce operations, particularly by investing in online sales platforms that display products and convert shoppers more effectively,” says Jeffrey Grau, eMarketer principal analyst. “Apparel sales have benefitted more than any other category. Apparel has become an online success due largely to easy and free returns, innovative visualization tools and the presence of customer reviews."

A robust e-commerce presence can open up a world of opportunity for companies, but it also places new demands on your company’s apparel distribution and supply chain logistics capabilities. Customers are becoming accustomed to an increased amount of choice, and they expect to be able to get their choices quickly. It’s also easier for them to price compare, which makes the savings that can be gleaned from ultra-efficient apparel supply chain management critical. And, of course, buying an outfit online (without trying it on first) boosts the rate of returns, adding yet another apparel logistics and supply chain management challenge.

Here at The Apparel Logistics Group, our third party logistics services can help your company slim down, gear up, and be ready to ride the leading edge of the e-commerce wave as it continues to develop.

Posted: 4/26/2012 10:20:22 AM by Global Administrator | with 0 comments

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