E-Tailers Bank on Discounts to Drive Sales

NEW YORK — With online sales forecasts mixed this holiday season, e-tailers are taking an aggressive stance on promotions to attract price-conscious consumers.

“The online channel is resilient, but not immune to the economic downturn,” said Larry Joseloff, VP of content at Shop.org.

Already last week, online retailers large and small were advertising significant price cuts well before today’s Cyber Monday, the traditional start to the online shopping season.

Saks Fifth Avenue, Nordstrom and Neiman Marcus all had footwear prices reduced 40 to 50 percent on their Websites. Other department store chains were aggressive online as well, with Kohl’s offering as much as 50 percent off its footwear and Dillard’s marking down boots by 40 percent.

The trend is only expected to increase during the next few weeks. According to a holiday survey conducted for Shop.org this fall by Shopzilla, 84 percent of online retailers will have a special promotion for Cyber Monday, up from 72 percent last year. Nearly one-fourth of e-tailers plan to offer free shipping on all purchases.

Joseloff also expects online retailers to tweak their strategies as the season moves along.

“They will be able to alter promotions on the fly. You can decide at noon to do a promotion the next day,” said Joseloff.

Mimi Nuelle, director of apparel, shoes and accessories at Overstock.com, is doing just that. Nuelle said she is monitoring competing Websites each day to see how she can beat prices and set markdown goals.

“I sign up for all my competitors’ e-mail distribution lists just to stay on top of what other people are doing. Nordstrom is doing huge sales … same thing with Dillard’s,” Nuelle told Footwear News last week. “What I said to my team is 60 [percent off] is the new 40. Sixty percent off is now where you need to be to be competitive.”

Still, she predicted that certain footwear styles might be more markdown-resistant than ready-to-wear.

“Shoes [are] better off than apparel. The deals I’m seeing in apparel are extremely sharp,” said Nuelle. “I’ve seen a lot of resistance on retailers’ parts to reduce pricing on boots. And I have a hunch that’s because boot sales are fairly strong, despite the economy. They’re probably our best-performing category right now.”

But overall, the mood among footwear e-tailers is decidedly more cautious than in previous years, when double-digit increases were the norm.

“We don’t expect to have that same increase [this holiday season],” said Steve Hill, merchandising VP at Zappos.com, although he said the site still expects year-over-year increases for the fourth quarter.

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