• Media Life, Wednesday, January 31, 2007 10:45 AM

Does the Internet spell doom to today's brick-and-mortar shops? No, says new research from JupiterResearch. Ecommerce will probably hit a wall in the not-too-distant future, eventually leveling out at between 10% to 15% of total retail sales, according to the report by Patti Freeman Evans, Jupiter's senior retail analyst.

However, despite the sales slowdown, online advertising will continue to grow as a huge influencer of offline sales. The Jupiter study predicts that by 2010, nearly half of all U.S. sales will have been influenced by and/or purchased through the Internet. "Even though sales online may plateau at 10%-15%, the influence is so much greater than that," says Freeman Evans, who called the sector "a very fertile pool for advertisers."

Online sales will continue to grow in the near-term. The study, which looks ahead five years, predicts that online sales will grow 16% this year, eventually declining to 9% and 8% by 2010 and 2011, respectively. The plateau effect won't likely take shape for another 10 years. The online marketplace is maturing sooner than expected, as the number of new online buyers reached the saturation point in key demographics, including affluent Web users.

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