Online clothes shopping: Europe outpacing U.S

BANGALORE, INDIA: When Melanie Holtkotter, 29, wants to freshen up her wardrobe, she does so from the comfort of her home in Lippstadt, Germany rather than shopping at downtown stores -- a signal of tougher competition ahead for U.S. fashion retailers already established online.

"It's simple to browse and compare items or even different brands," said Holtkotter, a former insurance staffer. "I can take time making choices, the goods will be delivered to my house and I can still return them."

Online shopping is in, and when two of the leading fast-fashion brands launched websites late last year, European fashion retail hit its stride -- and raised the bar for U.S. peers such as Abercrombie & Fitch Co and Victoria's Secret parent Limited Brands Inc.

Spain's Inditex, which overtook U.S.-based Gap Inc as the world's biggest clothing retailer by sales last year, launched online shopping for its flagship Zara brand in September. Sweden's Hennes & Mauritz also went online.

Online spending in Europe is expected to grow 18 percent to more than 200 billion euros ($271.8 billion) this year, well ahead of the near-11 percent growth, to $192 billion, predicted for the United States, according to Kelkoo, a website that compares online prices.

The 27-nation European Union has a population of just over 500 million, against a U.S. population of close to 320 million.

"2011 will see online sales achieving a significant share of retail trade in most European countries, with 7 cents in every euro being spent online on average," Kelkoo CEO Richard Stables said in a release last month.

And that could be bad news for some U.S. retailers.

U.S. specialty chains catering to 15-to-35-year-olds will be most affected, said Marshal Cohen, chief analyst at NPD Group.

"You have to understand that the pie isn't getting bigger and bigger. The more slices you put into the pie, the more the competition," he said.

Abercrombie & Fitch and Victoria's Secret, both of which have a strong cachet overseas, will be among those to feel the competitive threat, especially if new entrants price more competently and deliver faster.

Natalia Grabov, an analyst at London-based retail research firm Verdict, reckons companies looking beyond bricks-and-mortar stores can expand their customer base quickly and effectively.

"This is a cost effective way to explore the market and understand demand before promoting heavily," she said.

And the wider variety offered by online shopping is a winner for 27-year-old Eva Maria Darre from Copenhagen.

"The thing I like about it is that I get a chance to buy clothes by brands not sold in my city," the social counselor and fashion blogger told Reuters, adding she was attracted by popular brands and exclusive web-only deals.