• by Jack Loechner , Staff Writer @mp_research, June 15, 2006

Online Sales to Surpass $200 Billion This Year, According to Shop.org/Forrester Study (-Retailers Integrate Websites, Stores to Maximize Sales-

According to The 2006 State of Retailing Online from Shop.org, conducted by Forrester Research, online sales will top $200 billion this year, after reaching $100-billion only three years ago. 2006 online sales (including travel) are expected to rise 20 percent to $211.4 billion. Sales excluding travel will reach $138 billion.

The largest non-travel categories this year will include

• Computer hardware and software ($16.8 billion)
• Autos and auto parts ($15.9 billion)
• Apparel, accessories, and footwear ($13.8 billion)

Pet supplies and cosmetics and fragrances are expected to experience growth rates over 30 percent, more than any other categories.

According to the report, online sales last year rose 25 percent to $176.4 billion. Excluding travel, online retail sales rose 28 percent to $113.6 billion, representing 4.7 percent of total retail sales in 2005.

Multichannel strategies by retailers to sell merchandise and also to increase store sales include:

• 79% of retailers have consistent pricing across channels
• 46% allow their customers to buy and redeem gift cards online and in stores
• 33% give customers the ability to accrue loyalty program points across channels
• 26% offer in-store product information online

Retailers reported that 22 percent of offline sales are influenced by the Web, and 38% of online customers are new to a company's entire business.

Scott Silverman, Executive Director of Shop.org, said "... encouraging different channels to work together, instead of in isolation, ...is paying off for companies in the form of higher sales."

Companies continue to increase the security of their websites and are beginning to offer a variety of payment methods to online shoppers. According to the report:

63% percent of retailers surveyed require card verification value (CVV) codes at checkout. For payment:

• 25% percent of retailers accept private-label cards
• 12% percent offer third-party email payment options
• 9% accept eChecks
• 7% offer third-party credit accounts

Innovation on the Horizon(The 2006 State of Retailing Online concludes with an analysis of the future of online retail and says that retailers have spent much of the past year developing long-term forecasts, budgets, and personnel plans. These new initiatives are still in the planning stages and are expected to launch within the next two years.

Carrie Johnson, lead author of the report and Research Director, Vice President at Forrester Research, concludes "Retailers spent the first decade of eCommerce scrambling to react to and learn about the Internet. Companies are now able to take a step back and are planning strategies and prioritizing technology investment for the long term. As a result of these efforts, the next five to ten years of online retail will be even more competitive and more innovative than in the past."

For more about this report, please visit here.