Cyberspace - a shiny new store-front for apparel firms

BANGALORE (Reuters) - Fiona Jones used to be an avid shopper till she gave birth to twins.

"Now the queues seem endless, and I can never pay as much attention," the 29-year-old homemaker, who once thought nothing of crossing the Brooklyn Bridge to check out new apparel in stores, said.

With a recession in full swing, the Brooklyn-based mother of one-year-olds now weighs each trip across the river carefully. She makes up for the rest by shopping online -- it saves time and often money, and she can browse through the virtual racks at her own pace.

"It is a lot easier for me to compare discounts and even styles online -- it's just a click away. Now, with the babies and the recession to top it off, it is more important for me to make value purchases," Jones said.

Delivery available at your doorstep, big discounts, easy exchange schemes and online-exclusive clothes and accessory lines have added to make cyber shopping -- even online clothes shopping -- a viable option for many.

Apparel retailers across the board have seen an uptick in online traffic, even as footfall at stores declines.

Stacy Fuerte, for one, finds Target Corp's (TGT.N) website a great place for bargains.

"Their clearance section is always full of amazing deals, (and) they always offer free shipping in some way," the 21-year-old senior at San Diego University said.

And it isn't just younger shoppers who frequent cyber shops.

"Older people may be less inclined (to shop online), but it is actually a growing demographic... because once they take the plunge, increasingly they are willing to go forward," Andrew Lipsman, director of Industry Analysis at tracking firm comScore Inc (SCOR.O) told Reuters.

For merchants, lower fixed costs, improved management of inventory and better discount clearance opportunities contribute to making online retailing attractive.

With cost-cutting being the new mantra, it's "absolutely smart for retailers to focus on growing their online businesses," Wedbush Morgan Securities analyst Betty Chen said.

It is cost effective, can operate 24/7 and allows companies to offer expanded sizes and styles online without committing to as big an inventory as they would have to in stores, Chen added.

A CYBER SAFETY-NET

Sure enough, online sales have served to offset an otherwise dismal season for many retailers.

Urban Outfitters Inc (URBN.O) reported holiday same-store sales down 1 percent.

"But if it included e-commerce activity, same-store sales would have in fact increased 3 percent. Their Free People stores comped down 11 pct, but Free People including internet sales were actually up in the strong double digits," Sterne, Agee & Leach analyst Margaret Whitfield said.

At Gap Inc (GPS.N), online net sales have doubled over the past three years, spokesperson Kris Marubio said. While the company's total sales fell about 8 percent in the third quarter, online net sales rose 15 percent.

And while Bon-Ton Stores Inc (BONT.O) tripled their online offerings recently, New York & Co (NWY.N) -- which plans to close around 50 stores -- will relaunch its website in the first quarter as it sees the online channel as a "growth vehicle."

THE VIRTUAL INFLUENCE

In a reversal of roles, virtual shops are now influencing traditional shopping patterns.

Kasey Lobaugh, multichannel retail practice leader for Deloitte LLP, told Reuters that five years down the line, retail stores will have smaller footprint and the online channel will be a bigger part of total sales than today.

"Across categories and especially in apparel, the online channel is becoming increasingly influential on non-online sales," he said.

A first-time online buyer may only be comfortable buying a scarf off the website, but that may translate to a visit to the brick and mortar store to pick up a matching blouse, as well as good word of mouth for the online experience.

"Generally speaking, every dollar that retailers are selling online is influencing three additional dollars of store sales," Lobaugh said.

The focus is also on how to convert customers to become multi-channel users, he said, adding that an apparel retailer he declined to name had recently said that all of its new customer acquisitions had happened online.

"Retail is changing," Lobaugh said, and a lot of this change is based on how customers decide they want to interact with retail brands.

This means more people would want to do part of their transactions online and part in stores, he said, which means "that the two pieces have to work in concert like never before."

(Editing by Anthony Kurian)