As web-savvy online shoppers come to expect Web sites to have features like close-up product pictures and easy returns, retailers are having to work harder to improve their sites as the once skyrocketing growth of the E-commerce industry slows this year.

Accordng to a survey conducted by Forrester Research Inc. for Shop.org, the National Retail Federation’s digital division, retailers are also spending more of their marketing budgets on ways to get online shoppers into stores and getting in-store shoppers to log on. This includes improving their catalogs, the survey found, since about two-thirds of retailers measure the success of a catalog by how it increases web sales.

“Today’s online shopper is extremely web-savvy and expects more than ever, forcing retailers to raise the stakes,” said Scott Silverman, executive director of Shop.org. “Companies are investing in new features that will keep customers coming back, and homepages everywhere are getting a major facelift.” 

About 88 percent of retailers surveyed said they planned to focus on improving the content of their product detail pages, with 80 percent adding alternative images, 72 percent incorporating lifestyle photography and 63 percent integrating customer ratings and reviews, in the next 12 months. 

They are also making their Web sites more sophisticated, adding drop-down menus and roll-over lists and sections detailing “top sellers” and “what’s new.”

The survey of 150 retailers is the second part of an annual study by the trade group on retailing online. The first part, released in June, said that online retail sales for 2007, excluding travel, are expected to reach $174.5 billion, up 19 percent from $146.5 billion in 2006, which was up 29 percent from 2005. 
 

Calling all fashion houses, designers, sytlists, fashion-savvy musicians and the cool kids who love them — MySpace has something for you!

The social networking site launched on Tuesday the official version of its Fashion Community, where users can get beauty tips and fashion ideas, watch streaming video of fashion shows and photo shoots, and hunt for design inspiration.

“Fashion is such a huge part of our users’ lives. This gives them a way to connect with other users and express themselves,” said Todd  Dufour, director of strategic marketing for MySpace, in an interview.

Dufour said the site will also include exclusive explanations of different celebrities’ styles and editorials about the style of certain stand-out users, but will also encourage users to post their own content.

“MySpace Fashion is all about amateur and professional work,” Dufour said. “We want users to feel empowered that if they’re standing outside the tents at Bryant Park and they were to upload a video of, say, Issac Mizrahi walking in, and if it’s a good video and they get their point across, we want to feature it.”

MySpace – which has 115 million unique visitors a month — may become the largest interactive site for fashionistas, but it is certainly not alone. There is ”Iqons“and “WhoWhatWearDaily,” which is partnering up with MySpace for this fashion adventure.

In the year since the site launched the test version of the MySpace Fashion Community it has lured some 53,000 “friends.” It hopes to make many more with its official launch, in celebration of New York’s Fashion Week, which begins next week.

After a week of guessing, Ann Taylor Stores finally came clean on Friday about the target of its new, and as yet unnamed,  chain — baby boomers.

(There’s a few of their kind in the picture to the right, in a movie that ruined all sorts of good songs for generations.)

AnnTaylor, which reported better-than-expected earnings on Friday, said last week it hired Mark Mendelson to run the chain, but declined to say what the chain would be. The New York Times reported that it was boomers — people born in the U.S. in the relative quiet following World War II and before the Civil Rights movement — but the company refused to confirm it until Friday that it was moving into territory where other rivals have already tried and failed.

“The new concept is targeted at a significantly underserved segment of the apparel market, one that we call the modern boomer,” said Chief Executive Kay Krill on a conference call.

Analysts have said it is a smart niche to pursue, since baby boomers are underserved and tend to have more disposable income. On the other hand, they are less moved by peer pressure, and have had decades to amass shopping savvy and a closet full of basics.

Gap, for example, began closing its Forth & Towne stores less than 2 years after launching the chain.

“While there are a number of companies that currently play in the broader boomer market, we believe that this particular segment has been the most significantly underserved and a huge opportunity for us,” Krill said.

Analysts seem to agree.

 ”Currently, it appears a number of companies are trying to attract this customer, but it is with mixed success,” notes Jennifer Black of Jennifer Black & Assoc. ”We believe there is opportunity for the agile, quick-to-respond, and highly creative company to consistently provide product to this market.  Our sense is that the ‘modern boomer’ is eclectic and very lifestyle driven.”

Roxanne Meyer, an analyst with CIBC World Markets, said a week ago that she imagined Ann Taylor would develop clothes for mature consumers that were more fashionable than those offered by other retailers in that space, namely Chico’s FAS Inc. and Coldwater Creek Inc. 

Ralph Lauren, you’ve done it again!

According to trade paper Women’s Wear Daily, the chairman and chief executive of Polo Ralph Lauren Corp. was the highest-paid executive of an American apparel vendor last year – for the third year in a row — with a pay package worth $25.9 million.

While Lauren was the highest-paid vendor, he would only rank fourth among the top-paid executives of U.S. retailers, who together earned $198.7 million last year — more than double the $88.8 million earned by the top 10 vendors.

The retailer list was led by Target Corp. Chief Executive Robert Ulrich, who earned $36.4 million; followed by Wal-Mart Stores Inc. CEO H. Lee Scott Jr. ($29.7 million) and Abercrombie & Fitch Co. CEO Michael Jeffries ($26.2 million). 

WWD said the list clearly mirrored the states of the two sides of the industry, where retailers are growing, many vendors, such as Liz Claiborne Inc. and Jones Apparel Group Inc., are struggling with retail consolidation and growing competition from private label brands.

Polo Chief Operating Officer Roger Farah was the No. 2 vendor, the paper said, with a base salary of $900,000 plus stock and option awards worth more than $8.5 million, for a total package worth $12.5 million.

Liz Claiborne’s former CEO, Paul Charron, ranked third, with a total package worth $9.8 million, followed by Cherokee Inc. CEO Robert Margolis, who earned $8.8 million and Phillips-Van Heusen Corp. CEO Emanuel Chirico at No. 5, with a package worth $6.7 million.

Lauren, who runs one of the few apparel vendors which is not struggling, is the only one who would have placed among the top retailers.

Women generally buy clothing with an eye on style, but one place where function matters as much as fashion is on the golf course, according to a new study by research firm NPD Group.

The Port Washington, NY-based research firm said on Wednesday that men and women pointed to comfort as the primary quality they looked for in golf clothing and footwear, weighing significantly more on their purchase decisions than price or style.

“I think one of the biggest opportunities in the golf apparel market exists in women’s,” said NPD analyst Marshal Cohen, noting that 72 percent of women buy nonsports apparel to play sports, and that in golf, the number is even higher. “That means female consumers are buying a good deal of sportswear and activewear rather than golf-specific clothing. That is where I see opportunity.”

According to the NPD survey, 18 percent of U.S. men and 3 percent of U.S. women have played golf in the past year.

Internet sites that specialize in golf clothing for women include Lady Golf, The Ladies Pro Shop and Golf Sophisticate.

Kate Spade plans to stay on indefinitely at the company that bears her name in a “co-creative director” role, according to William McComb, chief executive of Liz Claiborne Inc., which acquired the handbag maker in December.

Spade and her husband Andy, who had joined the company in 1996 as president and creative director, have extended their contract indefinitely, and are working closely with McComb to find a senior management team for the brand, including a new chief executive.

McComb gave the news at an analyst meeting in New York on Wednesday where he announced that Liz was exploring options for 16 of its apparel brands and increasing investment on four star brands, namely Kate Spade, Mexx, Lucky Brand Jeans and Juicy Couture.

“Together we expect to make an announcement on (a senior management team) … within a couple weeks,” McComb said.

“Kate and Andy have ideas about what they would like to do next. They are entrepreneurs. They love the zero-to-sixty,” McComb said. “But it’s still a business that bears the name of Kate Spade and they would like affiliation in some fashion.”

McComb said they were planning to name the new management team and then define the specifics of the Spades’ new role.

Liz Claiborne is expecting the Kate Spade brand, which currently has annual sales of about $90 million, to reach about $250 million to $350 million  by 2010. Jill Granoff, who heads the “direct brands” division, said the company is targeting 120 stores by 2010, up from about 40 now.

By comparison, larger rival Coach Inc. has over 300 stores, Granoff said.

That might be what Limited Brands Inc. Chief Executive Leslie Wexner had in mind when he mentioned Victoria’s Secret ringtones as a possible marketing move.

In an internal letter that Wexner, who founded The Limited in 1963, sent employees last week, he outlined plans for a “more vibrant, more inspired” business once the company sells its underperforming apparel brands, The Limited and Express. The company intends to focus on the more profitable and less seasonal businesses of Victoria’s Secret and Bath & Body Works.

“Our brands will come to life in new ways,” Wexner said. “Maybe Victoria’s Secret ringtones for your mobile phone … emails from (Victoria’s Secret and Bath & Body Works) that know what you’ll like and want based on what you’ve bought.”

Advertisers of many stripes currently send emails touting products they think customers would like based on prior purchases. But marketing for mobile phones is less ubiquitous, though Coca-Cola Co. recently revealed a new mobile phone marketing plan for Sprite.

Wexner also talked about new channels of distribution, developing adjacent product categories, international growth and opportunities for licensing.

Click here to see the full text of Wexner’s letter.

Coach Inc. on Tuesday reported better-than-expected second-quarter profit, as more people visited Coach stores and more of those visitors snapped up the retailer’s full-priced handbags.

In a telephone interview, Coach Chief Executive Lew Frankfort discusses what happened during the quarter and holiday season, as well as his views on the American consumer. Below is an edited transcript of the interview: 
 
Reuters: Quarterly sales and earnings exceeded your, and Wall Street’s, expectations. How would you describe the quarter and what stood out? 
     
Frankfort: What particularly stands out is the 21-percent same-store-sales growth we achieved in our full-price retail stores. When we break that apart and analyze where that growth came from, we’re particularly pleased because it came from a substantial increase in traffic, conversion and a more modest increase in average ticket. So, (it was) the combination of more people visiting us, buying more frequently, and at a modestly higher ticket.

A second standout was the surge in new customers. When we analyzed where they are coming from what we find is that one-third are coming from other brands that are accessible luxury. A second third are trading up from the more moderate segment, with the remaining third trading down.   
    
Reuters: In the press release you said you are recognizing a larger market opportunity in terms of addressable market size and market share. Can you elaborate? 
   
Frankfort: When we look at new consumers coming into the franchise, one-third of them are trading up from the more moderate segment where historically they have bought bags at lower (price) levels than Coach. When we include this segment, it brings the total addressable market to north of $7 billion. Coach has only about 20 percent of that market. Previously, we had defined our market more narrowly, to only include those consumers who spent historically at our level. That market was about $5 billion to $5.5 billion, so (including the moderate segment) increased the addressable market by 25 to 30 percent … and decreased our market share from 26 percent to under 20 percent. 
    
Reuters: As you expand your range of offerings to include higher-end and more value-priced items, how do you prevent the dilution of your brand’s cachet?
    
Frankfort: We have always targeted the top 20 percent of U.S. households and we attract an additional 20 percent below the top 20 percent. One of the reasons we introduced Legacy and some of the other higher-end products was so we could do a more effective job in marketing to the top tier of our customers who already shop Coach. Many consumers who are in the top 1 percent to 3 percent in income (already) buy Coach. But they might, for example, buy a Coach accessory, which they might put in their European luxury handbag. These consumers are already customers of Coach and they demonstrated their interest in Coach being a larger share of their accessory wardrobe. 
    
The second thing I might mention is that in America we live in a very egalitarian society where consumers are accustomed to shopping high and low. Consumers are looking for innovation and relevance and perceived value. Americans are not snobbish. We have not felt any snobbery whatsoever from any segment of our target consumer base. Americans don’t have the inherent bias toward luxury that so many people in other cultures have. 
 
Reuters: How did this past holiday season compare to your expectations? 
 
Frankfort: We went into holiday bullish because we had a very strong fall season. What we find is that the best predictor of future behavior is our most recent experience, and we had a very strong fall season with rising traffic and increasing conversion. It bode very well for the holiday season. We built our inventories higher than we otherwise would have, anticipating that the momentum we had experienced in the fall season would continue through holiday, which it has done.
 
Reuters: What is your outlook for consumer confidence and spending, both with respect to Coach and the economy in general? 
    
Frankfort: At the middle and higher ends, consumers continue to be confident. We believe that spending will be strong. However, consumers are increasingly discerning and judicious. They will pick their shops. They’re looking for products and services that are relevant to their lifestyles.

Increasing sales, differentiating product assortments, retaining customers and cutting costs are the top priorities for retail executives in 2007, according to the Retail Horizons study, which was developed by the NRF Foundation and Wells Fargo Retail Finance and discussed at the National Retail Federation’s annual conference in New York.

Growth — About 59 percent of merchandising executives said driving same-store sales increases was a key focus, while 68 percent said increasing market share was a key initiative. Nearly three-quarters of online executives said increasing online sales was a top focus.

Differentiation — Differentiation of product offerings is the second most important strategy and challenge for 2007, according to the survey, which found that 18 percent of merchandising executives said they will focus on implementing an assortment-planning process this year.

A growing number of merchandisers said they will develop micro-merchandising strategies, while supply-chain and merchandising executives projected an increased focus on global sourcing compared to last year, the study found.

Customer service/retention — Customer retention or reactivation will continue to be the first priority for 59 percent of customer relationship management executives in 2007, up from 50 percent last year.

About 82 percent of store and field operations executives will change sales associate procedures based on customer satisfaction surveys, the study found, noting that employee training is the No. 2 priority for store and field operations executives.

Cost containment/reduction — Labor scheduling is the third most important priority for store and field operations executives for 2007. About 46 percent of human resources executives chose employee retention as the most important initiative of the year.

Distribution network optimization, warehouse management systems and vendor management are projected to be the top 3 strategic initiatives for supply chain executives.