Best Websites For Retail Store Chains: Where Will Consumers Spend Their Money This Holiday Shopping Season? Assessment From Industry Expert Predicts Success Rates

• On 11:19 am EDT, Monday October 19, 2009

67 WALL STREET, New York - October 19, 2009 - The Wall Street Transcript has just published its Online And Direct To Consumer Retailing Report offering a timely review of the sector to serious investors and industry executives. This 38 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Online Retailer Profit Margins Vs. Bricks-And-Mortar Retailers - Uptick In Internet Commerce - Secular Shift In Market Share To Internet Retailers - Post-Crunch Consumer Confidence - Growing Market Share For Online Travel Agents - Possible Consolidation Of HSN, Inc. - Amazon As The "Wal-Mart Of The Internet" - Online Marketing Vs. In-Store Marketing - Maximized Markdowns - Online Traffic Conversion Rates - Social Networking To Drive Brand Awareness - Online Sales Holiday Outlook - E-Commerce As A Path To International Expansion

Companies include: Abercrombie &Fitch (ANF); Amazon (AMZN); Ann Taylor (ANN); Apple (AAPL); Ask.com (IACI); Bebe (BEBE); Best Buy (BBY); Bidz.com BIDZ); Dell (DELL); Dick's Sporting Goods (DKS); Expedia (EXPE); GSI Commerce (GSIC); GameStop (GME); Gap (GPS); General Motors (GM); Google (GOOG); HSN (HSNI): Hot Topic (HOTT); Interactive Corp. (IAC); Liberty Media Interactive (LINTA); LivePerson (LPSN); MercadoLibre (MELI); Move Inc. (MOVE); Orbitz (OWW); Pacific Sunwear (PSUN); Quiksilver (ZQK); Ralph Lauren (RL); ShopNBC/ValueVision (VVTV); South Korea's Gmarket (EBGMy); Sport Supply Group (RBI); Staples (SPLS); Starbucks (SBUX); Target (TGT); Timberland (TBL); Urban Outfitters (URBN); VeriSign (VRSN); Wal-Mart (WMT); WebMD (WBMD); eBay (EBAY); hhgregg (HGG); priceline.com (PCLN).

In the following brief excerpt from just one of the 9 in depth interviews in the 38 page report, an online retailing expert discusses the outlook for the sector and for investors.

Brian Sozzi is a New York-based Analyst for Wall Street Strategies, Inc. He covers the apparel/hardline goods sectors of the retail industry. Mr. Sozzi is a frequent contributor to Fox Business Network, Forbes, Bloomberg, The Wall Street Journal and other media outlets.

TWST: What is the ideal mix of online vs. in-store sales for a traditional retailer like Urban Outfitters (URBN) or Target (TGT)?

Mr. Sozzi: A good example would be Abercrombie & Fitch (ANF). Abercrombie last year generated 10.0% of their annual sales from their online business and that were pretty much on the high side within the specialty apparel sector. That's because Abercrombie operates five brands under their portfolio and each brand has its own distinguishable Web site. So for more traditional specialty apparel companies, you're looking at 4% to 6% of annual sales devoted to online, and you should continue to see that increase over the next two to three years, maybe closer to an Abercrombie, for example, as companies offer more unique merchandise online, and the economy recovers.

TWST: To what extent can these companies compete with an exclusively online retailer like Amazon (AMZN)? What advantages do they have compared to an Amazon?

Mr. Sozzi: The advantages are pretty clear, and I think they're starting to creep increasingly into the picture. For example, Amazon offers free shipping, and that's great ease of use. And the other element is increased trust in the product. The customer has to trust the product to actually buy it off Amazon, be it a piece of clothing or a Kindle. Amazon has made great inroads into customer review scores, which has improved confidence in getting the right product in addition to them having a great return policy. So as that trust starts to build up, you're seeing more consumers go online. Even outside Amazon and just getting back to specialty apparel, many of these companies are taking money that was once being devoted to new store build-outs, and they're reinvesting in the Web site. A good example would be Ann Taylor (ANN), which did what I'd like to call bringing the items closer to the computer screen. If you go to their Web site, the focus is indeed on the quality of the merchandise rather than price, which has a positive margin implication.

TWST: What makes a good e-commerce site for specialty apparel retailers?

Mr. Sozzi: The components are, one, I believe adding new shipping destinations is critical, especially overseas. Urban Outfitters, for example, last year shipped to 41 countries. Now they have boosted that upwards of 60. So they're getting the Urban Outfitters name out there prior to building the infrastructure to support new-store growth. Number two would be store-to-door, where a customer is able to actually go online and, if they like the product, they're able to check if a local store has that item in stock. Then you have unique online offerings - that's an increasingly big trend that I'm starting to see pop up. Many of these companies offer online exclusives, such as a certain cut of denim or a top in different sizes. Companies are using their Web sites as a great tool to convert traffic, maximize markdowns and try to ascertain what their consumer base is gravitating towards, which in turn is allowing them to tailor their marketing campaigns. Whereas one year you may be seeing Gap (GPS) on TV just promoting denim, now they have a better insight into what their consumer wants outside of denim. What are they buying in addition to denim, what type of shoes, what type of necklaces, what are they doing to round out the purchase? Ultimately, this maximizes their marketing ROI.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 38 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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