In a bid to catch up to what’s quickly becoming the new norm, more big-name international retailers are jumping online, including Spanish retailer Zara and chic retailer H&M, spurred by less-than-savory sales at their brick-and-mortar stores.
The move not only aims to entice international customers and test out the stores’ brands internationally, it’s all about the bottom line. Buying online is estimated to grow to $145 billion in western Europe in the next three years, from $86 billion in 2009, according to Forrester Research, the National Retail Federation’s digital division. In the U.S. alone, online retail sales are estimated to total $173 billion in 2010.
Zara, owned by the Inditex Group, recently overtook Gap as the biggest clothing retailers in regards to sales. And it clearly sees Gap as trying to gain an edge. Last week Gap Inc. (NYSE: GPS) opened its first online store outside the United States for its main brand and offshoot Banana Republic– and the move couldn’t have come at a better time. Online sales have risen +15% in the most recent quarter, hitting $258 million. Last month, reported net sales were noted at $1.1 billion for August, flat compared with sales of $1.1 billion for the four-week period last year.
Gap will target Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Spain and Sweden in its next round of online store rollouts.
Zara, which is selling online in Britain, France, Germany, Italy, Portugal and Spain, is somewhat late in the game jumping to more international online sites. The store already has some 4.5 million fans on social networking site Facebook. Clearly, offering those consumers an online outlet has the potential to significantly boost sales numbers. It now plans to launch online sites for its other brands, including Massimo Dutti and Bershka, in the coming months. And it’s expanding to the United States, Japan and South Korea in 2011.
The Swedish-based clothing company H&M, with its principal markets being in Germany, the United Kingdom and Sweden, also announced that it will be aiming for international online stores by the end of this month.
Online store sales in August helped give retailers a huge boost. August’s largest gain for department store chains came from Nordstrom, which saw sales at stores open at least a year increase by +6.3% while its direct division, which includes online sales, had a +3.7% gain. Amazon.com (NASDAQ: AMZN) was up +9.1%
Because online sales save customers time and have zero overhead and big margins, expect more stores to open online stores internationally if the big chains see big gain. It’s something that is bound to excite consumers just as much as it does the stores themselves.
As of this writing, Burke Speaker did not own a position in any of the stocks named here.
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