Shops losing business to online juggernaut, study shows

Amazon.com boxes await delivery in a UPS truck Amazon.com boxes await delivery in a UPS truck in Palo Alto, Calif. Photo Credit: AP

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When 26-year-old Christian Levis is looking for a holiday gift for his girlfriend, his shopping trip typically means firing up a computer browser or smartphone and cruising to Amazon.com, eBay.com or Google Shopping.

"I do most of my shopping online," he said. "It's almost always cheaper somewhere online ... I always like to start with Amazon because they have the widest selections. I'll Google stuff or use the Google Shopping aggregator. I'll even go to eBay for things, depending on what it is."

Beyond price, the Eastchester resident is attracted to the free shipping offered by many online retailers.

"Once people start giving shipping away and it's cheaper, there's no reason (to shop in person at a store)," he said.

His one concession to shopping in a store: When he buys clothing that he wants to try on for fit and see in person.

The attitude of Levis -- actually, he favors Seven jeans -- is not unlike those of many U.S. shoppers. Online shopping is growing, statistics show, and that is forcing stores to become ever more creative.

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In the quarter that ended Sept. 30, for instance, online sales grew 15 percent while total retail spending inched ahead 3 percent, according to digital analytics company Comscore.com. During the six-week period that ended Nov. 17, the percentage of visitors who actually bought a product climbed 1.5 percent for online shoppers but fell 1 percent for browsers at stores, according to the NPD Group's Shopping Activity Weekly Holiday Trends report.

Perhaps more significant, consumers in the key 18-to-39 age range are twice as likely to shop online for holiday gifts as those 40 and older (40 percent to 20 percent), according to the Shoppers Trend Report issued by online coupon provider RetailMeNot.

In 2011, 226 million shoppers spent $52.4 billion during Black Friday weekend (Thanksgiving Day through Sunday), according to a National Retail Federation survey, and almost 38 percent of that spending was funneled online.

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Sandra Szpicek-Leylegian, the owner of The Things I Love, a gift and home decorating store in New City, understands the challenge. She is refurbishing the store's website but does nearly all her business in the physical world.

"I'm from the old school where I've got to see it, feel it," she said of the shopping experience.

How is she fending off online rivals?

Szpicek-Leylegian acknowledges that she is at war and she is looking for ways to generate more business.

One way, she said, is having unusual products that are not mass-produced.

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When someone is shopping online for electronics, he can easily look up a serial number, she said. "But you can't look up a serial number that's handmade."

For the holiday season, the retailer said she has created a "treasure trove," packing the store with stock from around the world worth almost $1 million, from jewelry to vases to baby gifts. The store also inspires loyalty by shipping domestically and internationally and offering free gift-wrapping. For shipments to other states, the store charges no tax. Then there is price. During Black Friday weekend, nearly everything is discounted by 20 percent.

On top of that, she has been urging customers to enroll their American Express cards online at Shop Small for a $25 statement credit for purchases of $25 or more at qualifying small businesses on Nov. 24.

Levis reckoned that shopkeepers have no chance against the online juggernaut.

"I almost feel sorry for anyone running a retail store," he said. "It's you against the rest of the (online) world."

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One analyst contends that online retailers began offering juicy discounts around the middle of November in the buildup to the biggest online shopping day, the Monday after Thanksgiving.

"Cyber Monday has begun, essentially," Thom Blischok, chief retail strategist for Booz & Co., said in a report. "No question about it."

But Szpicek-Leylegian refuses to back down.

"Brick and mortar is always going to struggle hard," she said. "But people who are in brick and mortar, if we were on a battlefield, these are the people I'd want to have my back."

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