Welcome to the future!

Implications: - Over 60% of search based purchases are transacted on line. This information (sponsored by Google). Other interesting findings conclude that 25% of directed search queries converted into an on line sale. This was a comprehensive study, sampling using over 550 million clicks, with 24 search engines in 11 specific product categories.

- The up side for apparel sales is huge. Over 80% of off line purchases involved some aspect of a product search. This reads counter intuitive but the bottom line is that a specific product search has a good on line conversion rate. But over all non specific product searches for informational purposes and price comparisons are used in 80% of off line purchases.

- With "Search Marketing" becoming a focus and spending being allocated accordingly the direct search to specific sites now represents over 35% of the on line marketing budgets for the internet channel of distribution. Sales will increase in double digits. This will be a crucial dynamic as more business is migrating to the internet from the catalog and bricks & mortar channels of distribution. In order to maintain market share retailers have to be on top of this trend and constantly improve their search drives and conversions both quantitatively and qualitatively. For the most part this is a channel migration, not an incremental growth.

Analysis:

- Companies that are ahead of the e-commerce channel curve understand that there is a lot of "shop & compare" prior to an on line purchase and converting this "latent" buyer is going to be an important component for success.

- The number at $32 billion is a very good estimate. The department of commerce stated the e - commerce sales for all of fiscal at 2005 at $86 billion and a projected $95 billion for all of FY '06. The number is projected to surge to $140 billion by FY '08. The Algebra works!

- The up side for apparel retailers is that the majority of on line sales still comes out of cosmetics, medications, flowers, jewelry and luxury goods. An apparel retailer who is getting it right (Victoria's Secret) will reap incremental growth while maintaining and growing their more traditional channels of distribution.

- According to a study conducted last May only 17 of the top 100 retail sites were apparel related for FY '05. Most apparel retailers are just beginning to understand the opportunity and eventual dominance of e-commerce. Experts in the field of content, site architecture & design, key word identification and Meta tabs are being hired by leaders in apparel e-commerce departments to stay ahead of the curve and gain market share.

- SERPs (search engine result pages) are the future NOW of e - commerce with SEO still being of major importance; needing refinements in order to get consumers to your landing pages. It is Key to note the efficiency of SERPS to all other internet marketing initiatives as the conversion rates are higher than banner ads, associated & relative marketing links, shopping search engines and other marketing strategies.

- To make it a little more confusing the best strategy is to mix all the search modes to all the different dynamics as a pure play marketing plan, rather it be a sponsored link or an organic link is not as successful as a combination of all types of searches that lead a consumer to your landing page. The consumer feels manipulated if the only way they see your site is through a paid link.

- To sum up the question at hand, $32 billion seems like a very good estimate for holiday 2006 and regardless of the macro economic conditions this should prove to be the safest channel of distribution.