US retailers battle to gain edge over online merchants

US retailers are shoring up their e-commerce operations, playing catch-up as budget-conscious shoppers defect to such online merchants as Amazon.com. Walgreen Co and Toys ‘R' Us Inc are among the chains rushing to open distribution centres, revamp websites and integrate their stores more seamlessly into their online operations. Amazon, meanwhile, plans to open 15 distribution centres this year. "Many brick-and-mortar retailers have had their ‘a-ha' moment as Amazon continues to grow and the internet is getting more viable," said Mick Mountz, chief executive officer of Kiva Systems, which has seen orders surge this year for the warehouse robots it sells to retailers. Last month Toys ‘R' Us opened a warehouse near Reno, Nevada, equipped with the Roomba-like critters, which shorten order turn-around time.Some chains were caught off-guard by surging online orders in the 2010 holiday shopping season, said Mountz, who says one customer lost "millions of dollars" of web orders it couldn't fulfil because of inadequate online infrastructure. Now stores are making up for lost time as they prepare for this year's holiday shopathon. Last holiday season, online sales reached a record $32.6 billion (Dh119.7 billion), up 12 per cent over the previous year, said market researcher ComScore, which is based in Reston, Virgina. Many analysts expect web purchases to be stronger this year. "Given the current economic climate, free shipping and the ability to research product reviews before making a purchase make online shopping very compelling," said Betty Chen, an analyst at San Francisco-based Wedbush Securities. Confidence among consumers, whose spending makes up 70 per cent of the US economy, fell to the lowest level since May 1980 in August, according to a survey from Thomson Reuters/University of Michigan. Confidence fell to 54.9, the weakest since March 2009. In the United States, the unemployment rate has held above 9 per cent for four straight months.The US jobless rate was 9.1 per cent in July, the Bureau of Labour Statistics said early this month. From / Gulf News