An Internet First: Apparel Outsells Computer Hardware/Software Online

For the first time, apparel and footwear outsold computer hardware and software online in 2006, according to a report expected to be released today by Shop.org.

While travel is by far the No. 1 category in online sales, 2006 was the first year that a category other than computer software and hardware was No. 2, according to Shop.org’s 10th annual State of Retailing Online report.

Apparel is expected to hold the No. 2 slot in 2007, as well, the trade group reported.

Online sales of clothing accessories and footwear were $18.3 billion in 2006, and will be $22.1 billion in 2007, according to the report, which was conducted by Forrester Research on behalf of Shop.org.

Computer hardware and software sales online in 2006 were $17.2 billion in 2006 and will be $20.1 billion in 2007, according to the report.

Liberal returns policies, new stores, better online shopping experiences and increasing consumer comfort with online shopping all contributed to apparel’s rise, according to Shop.org’s executive director Scott Silverman.

“If you were looking for a sign that online retail has arrived and gone mainstream, this is the sign,” he said.

Meanwhile, online travel retained its title as king of the medium with $73.4 billion in sales in 2006, according to the study. Shop.org predicts online travel sales will hit $84.6 billion in 2007.

Business-to-consumer sales overall in 2006 were 25% higher than 2005, growing from $176.4 billion to $219.9 billion, according to Shop.org. The group predicts online sales in 2007 will rise by another 18% to $259.1 billion.

Online sales including travel were 8.2% of the total retail market in 2006 and will hit 9.4% in 2007, according to Shop.org.

Online sales excluding travel accounted for 6% of the total retail market in 2006 and will account for 7% in 2007, according to the report.