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Shoppers are choosing clicks over bricks
 
By Steve Jagler RSS Feed
Special to OnMilwaukee.com

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What is a blog?  For us it is a short blurb that we write when the mood strikes us.  It can be first person, funny or informative. In short, a blog is whatever we want it to be. Published Dec. 27, 2007 at 8:37 a.m.
Tags: ecommerce, shopping, target wal-mart, amazon.com

Why battle the traffic to go to a crowded mall or stand in line at a jam-packed department store, when I can just order the same merchandise online, have it delivered directly to my door and avoid paying the state sales tax?

Obviously, millions of Americans asked themselves that very question this Christmas season, and they decided to let their fingers do the clicking, rather than their feet do the bricking.

Amazon.com Inc. reported this week that it is having its best holiday season ever. The Seattle-based company said its busiest day was Dec. 10, when customers ordered more than 5.4 million items, which is 62.5 items per second.

Amazon's record sales came at the expense of traditional brick-and-mortar retailers, most of whom are having a very blue Christmas.

Target Corp. issued a warning this week that its sales might decline in December. The nation's No. 2 retailer said December sales at stores open at least one year were running well below its previous forecast and may actually decline from a year ago. As a consequence, Target's stock was trading this week at 28 percent below its 52-week high.

Although the nation's largest retailer, Wal-Mart Stores Inc., is holding up, most retail stocks are ending the year well below their 52-week highs. The stock for Menomonee Falls-based Kohl's Corp. traded this week around $44.97, near its 52-week low of $44.23 and well beneath its peak for the year at $79.55.

Target and Kohl's have plenty of company in the retail stock cellar. Consider the following stocks that are off their 52-week highs: Circuit City (down 78 percent); Office Depot (down 67 percent); Big Lots (down 54 percent); Dillard's (down 52 percent); J.C. Penny (down 50 percent); RadioShack (down 49 percent); Sears Holdings (down 48 percent); Family Dollar Stores (down 45 percent); Dollar Tree Stores (down 42 percent); Macy's (down 43 percent); Nordstrom (down 39 percent); Limited (down 39 percent); American Eagle Outfitters (down 39 percent); Lowe's (down 35 percent); Bed Bath & Beyond (down 33 percent); PetSmart (down 31 percent); Home Depot (down 27 percent); and Staples (down 16 percent).

The contrarian in me says the traditional retail stocks are basement bargains waiting to snatched up when the economy turns around as the housing market stabilizes and the credit crisis is resolved.

However, those are two gargantuan "ifs." And then there's the convenience/customer experience advantage that online retailers will still enjoy.

To survive, the traditional retailers are going to have to find ways to use their brick-and-mortar stores as showcases to drive their own direct online sales and vice versa.

By contrast, Amazon.com reported this week that it sold Nintendo Wii systems at approximately 17 units per second when they were in stock.

Amazon.com said it sold enough high-definition DVD players to cover seven football fields.

The top-selling Amazon items this year, by category, included:

Toys: Jakks EyeClops Bionic Eye, IlluStory Make Your Own Story Kit and Spinmaster Air Hogs Havoc Heli.

Video games and hardware: Nintendo Wii "Super Mario Galaxy" and "Call of Duty 4."

DVDs: "Harry Potter and the Order of the Phoenix," "Planet Earth: The Complete BBC Series" and "Pirates of the Caribbean: At World's End."

Books: "Eat, Pray, Love" by Elizabeth Gilbert, "The Dangerous Book for Boys" by Conn Iggulden and Hal Iggulden and "I Am America (And So Can You)" by Stephen Colbert.

Music: "Noel" by Josh Groban, "Raising Sand" by Robert Plant and Alison Krauss and "As I Am" by Alicia Keys.

Consumer electronics: The Garmin GPS, Canon PowerShot digital Elph cameras and Samsung LCD HDTVs.

Beauty: Burt's Bees Head to Toe Starter Kit, Imju Fiberwig mascara and Bare Escentuals Get Started Kit.

Computers: Apple MacBook, Nokia Internet Tablet PC and HP Pavilion Entertainment Notebook PC.

So, retailers find themselves asking the likes of this question: "How can we convince consumers to purchase their Burt's Bees Head to Toe Starter Kits through us, instead of Amazon?"

Jolly good luck to them.



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Steve Jagler is executive editor of Small Business Times.

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