E-Commerce Getting A Bit More Respect

The Moody's Investor Service has upgraded how important a retailer's E-Commerce activity is when assessing that retailer's overall economic health.

Although this isn't a radical change for the financial firm—and the thought that E-Commerce is important is hardly surprising—it's one of several recent moves suggesting that the young teen-age Web is starting to be taken a wee bit more seriously.

"As online sales become a larger percentage of total sales for individual issuers, and as online spending gains a bigger share of overall retail spending, a retailer's Internet strategy is becoming a more important factor in Moody's credit analysis," the financial firm said this week. "A strong online presence is considered a ratings positive more frequently than in the past, because it represents such an important channel of distribution and can mitigate declining comparable-store sales trends."

It wasn't clear how Moody's would define an online sale. Will it limit it to a product purchased directly on the Web site? What if the product is purchased online and picked-up in-store? What if the Web site is responsible for sending tons of customers to the physical stores? Would the retailer then get points for intelligently using online to boost revenue?

What about mobile? Would that be considered online revenue? What if the mobile phone is just being used as a browser to buy from a regular Web site? A mobile-enhanced Web site? A pure-mobile Web site?

But Moody's isn't the only hint. La-Z-Boy, the furniture manufacturer and retailer, announced Monday (June 16) that it was finally launching its first E-Commerce site. (As Aaron Sorkin once wrote, let's not complain they're coming late to the party and just be happy they showed up at all.)

Recent earnings details—revealed in SEC filings reviewed by Internet Retailer—showed that Web revenue is soaring at Kohl's and Foot Locker. The interesting part is that both retailers were seeing either anemic growth (1.4 percent for Kohl's) or a small loss (0.53 percent for Foot Locker) in their overall revenue, while their online sales soared, with Kohl's reporting a boost of 29.5 percent and Foot Locker a 7.1 percent hike.

Yes, the actual dollars in revenue were much lower online for both chains, but the direction of the numbers is getting some serious attention. Hey, Web kid! Sit up straight. People are starting to notice you.