Commentary

Just An Online Minute... Online Sales Spike

  • by May 25, 2006
Online sales are expected to increase 20 percent this year to $211 billion, led by pet supplies and cosmetics, of all things, according to a report by Forrester Research and Shop.org's annual State of Retailing Online study.

The report finds that online shopping has more than doubled in the last three years through 2006, driven by consistent pricing on retailers' Web sites and brick-and-mortar outlets, and the use of gift cards and loyalty programs. Excluding travel, 2006 sales are expected to increase 22 percent. to $138 billion.

Computer hardware and software, cars, and apparel, accessories, and footwear are projected to be the biggest non-travel categories driving the increase, with anticipated sales of $16.8 billion, $15.9 billion and $13.8 billion, respectively. Even so, sales of pet supplies, cosmetics and fragrances will grow faster than other categories at rates of over 30 percent, according to the report. While shopping online for pet supplies is increasingly common, growth in the cosmetics segment is more surprising, since consumers typically like to try products out at department store counters or at the local Sephora.

The study also found that gift cards offered by nearly half of all online retailers, and loyalty programs offered by one-third, helped boost sales. So go forth and purchase gift cards in time for Father's Day!

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