Online Retail to Account for 10% of US Retail in Five Years
According to a new report from Forrester Research, Inc., "US eCommerce Overview: 2003 To 2008," while offline retail sales continue to struggle, online retail will grow at a steady 19 percent year-over-year growth rate, from $95.7 billion in 2003 to $229.9 billion in 2008. Most significant, online retail sales will account for 10 percent of total US retail sales by 2008.
Forrester's finds that a growing online consumer base, increases in new product categories, and efforts by online retailers to optimize online shopping experiences will spark significant growth over the next five years. The report predicts that nearly 5 million new US households will shop online in each of the next five years, totaling 63 million US online shopping households in 2008.
Additionally, consumers will tap into product categories that historically have seen insignificant online growth. For the next five years, food and beverage, sporting goods, and home goods will grow the fastest, outpacing more traditional online categories like books and travel. Forrester projects the most dramatic growth in the food and beverage category, with sales increasing from $3.7 billion to $17.4 billion over the next five years. Sporting goods, which have found a niche in the used goods market, are predicted to grow from $1.7 billion to $6 billion, with nearly a third of sales coming from used products. Conversely, books, which generated 14% of US eCommerce sales in 2000, will fall to 3% of total sales over the next five years.
"Although we've seen eCommerce growth begin to slow over the past several years, online retail continues to grow and mature," said Carrie Johnson, senior analyst at Forrester. "We are seeing considerable growth with products that have taken longer to gain traction with consumers. Today, online shoppers are doing more than buying books and securing travel plans."
As online consumers' shopping preferences are evolving, online retailers are investing more heavily in site design and usability testing in an effort to create optimal shopping experiences for their customers. Today, 84% of the top 92 eCommerce sites offer zoom options for viewing products online, and retailers offer Spanish-language sites to better serve their Hispanic shoppers. As a result of site improvements, online conversion rates have increased.
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