"Looking at photos is not the same as looking at the real thing;"
You'd say the same thing about jewelry (BlueNile.com: 58M quarterly revenue) and shoes (Zappos.com: bought by Amazon for ~$1B).
(note: I edited this to say "jewelry" instead of "diamonds")- I agree loose diamonds are a commodity. An wedding ring you're going to wear the rest of your life is something I'd imagine people would want to see/wear before buying)
I don't think you'd say the same thing about diamonds: you pick the shape, size, clarity and colour. What else is there? If I were in the market for diamonds or diamond jewelry I see no problem with buying it online.
Shoes are a closer analogy. I would be very interested in seeing an answer to this question to those who buy/bought from Zappos:
When you buy shoes from Zappos, are you buying a style or shoe that you've previously tried on or bought?
Also, I think women's shoes are a different market to men's shoes. Women I think almost take it for granted that shoes, particularly dress/fashionable shoes, will be uncomfortable.
Again I take a utilitarian view to shoes. I have a hard time finding a pair that fits nicely. I'll buy lightweight runners/sneakers/joggers (depending on your lexicon) and then wear them virtually every day until they fall apart and I buy a new pair.
I buy shoes and clothing from Zappos all the time, because of their very lenient return policies. If I'm not sure what size or style to get, I'll just buy a few different combinations, try them on in the privacy of my apartment, and then return the ones that I don't like or that don't fit. It's a great system, and Zappos seems to even encourage this behavior.
In particular, it cannot be overstated how important a good return policy is. It's also bizarre how many companies get it wrong.
Example: I bought some stuff from Bed, Bath and Beyond a month or two ago. I realized I'd gotten the wrong thing. By this time I'd misplaced the receipt. I was expecting a hassle when I went back to the store. I walk up to the service counter and ask what the return policy is. The women behind the counter says they have a no hassle return policy.
She said she could give me store credit no problem or, if I preferred, she could look up the receipt on the system with my credit card. If she could find it, she'd give me a refund instead. She did in fact find it. I didn't have to produce any annoying pieces of paper nor justify why I was returning the item.
After that incident I went and spent another $150 in comfort knowing that if what I bought didn't work out I could return it.
So my advice for anyone dealing with physical goods: make it as easy as possible to return goods and customers will spend more. Make them love your store/website/whatever.
What if you could order the shoes and then return them no hassle if you didn't like them? That's what Zappos has done and it's lowered the barrier to buying something like shoes online.
Online clothing stores need an innovation like this.
Here in the UK, ASOS (http://asos.com) have an amazing returns policy.
My girlfriend (and me to a certain extent) generally returns around 50% of her ASOS purchases after trying them on at home. You can return them in the same bag, have them picked up or drop them to any Collect Plus (http://www.collectplus.co.uk) location.
Gap here in the UK lets you put your online order back in the bag, and stick it in the post with a checkbox question of why you're returning it. If all online clothes shopping worked like this I'd switch.
I buy shoes from zappos. And yes, I only buy brands that I know are going to fit me well. Initially, I bought my first pair of sneakers because there was 1 year money back guarantee with total reimbursement (including delivery from and to zappos).
The delivery is fast. The prices are ok. So far I have never returned my shoes. They all fit perfectly and customer service is great!
Part of the reason BlueNile (and JamesAllen.com) are successful is that they can offer diamonds at much lower prices than any retail store due to the way the market is structured [1]. They buy directly from diamond sightholders, so they have larger inventory and lower overhead. Diamonds may be a commodity, but these retailers have a systematic advantage within that market. Typical retail stores charge a 100% markup over the wholesale cost; BlueNile's is about 18%.
Diamonds have a standard set of metrics which are verified for certification. They are essentially a commodity. I wonder what BlueNile's revenue for loose diamonds is vs. revenue for bands.
Shoes are slightly different than clothes. While fits do vary slightly, it's not even remotely close to the variations in clothing. Online shoe shopping also produces better results than clothing. Things like feel aren't are varied either and the details are not nearly as important. I wouldn't buy expensive shoes online, but for most types of shoes, I much prefer online vs. b&m. Partially because of variety and partly because of my size (13 US).
Contrast this to my online clothes shopping habits, where probably at least 50% of my purchases are returned.
Based just on my experience I would say Zappos does have the same problem, but I guess the margins are high enough to overcome it. I frequently buy shoes from Zappos and end up buying either a bunch of different shoes and returning most of them, or buying two or three sizes in one shoe and returning the ones that don't fit. So I think the OP comments were spot on. Just because something is a significant problem, doesn't mean it's something that can't be overcome.
You'd say the same thing about jewelry (BlueNile.com: 58M quarterly revenue) and shoes (Zappos.com: bought by Amazon for ~$1B).
(note: I edited this to say "jewelry" instead of "diamonds")- I agree loose diamonds are a commodity. An wedding ring you're going to wear the rest of your life is something I'd imagine people would want to see/wear before buying)
I don't think that's the barrier for clothes.