• by Jack Loechner , Staff Writer @mp_research, February 4, 2008

A recent report from Forrester Research, summarized by Internet Retailer, shows that  Online retail sales in 2007 reached $175 billion, a 21% increase over $144.6 billion in 2006, the first significant drop in growth after years of around 25% growth.

The firm forecasts:

• $204 billion in online retail sales in 2008, 17% growth over the previous year
• $235.4 billion in 2009, 15% growth
• $267.8 billion in 2010, 14% growth
• $301 billion in 2011, 12% growth
• $334.7 billion in 2012, 11% growth

Sucharita Mulpuru, principal analyst at Forrester Research, notes "... declining year-over-year growth... for online commerce may represent a maturation of the e-commerce industry... the industry will add approximately $30 billion in additional revenue every year for the next five years... "

The report cites three major hurdles e-retailers face as the growth rate of online sales decreases:

• Most consumers still prefer stores
• The web channel is becoming increasingly seasonal
• Online shoppers tend not to browse

Internet Retailer, in quoting the report, includes these comparisons of consumer experience that influences selection of purchase location:

• "The in-store experience... is immediate, tangible and social... by shopping in stores, consumers can touch and feel items, avoid issues surrounding returns, and avert pesky shipping costs..."
• "While catalogs can often serve to drive customers to new products or stores, the 'spear-fishing' mentality of most online shoppers means there is less opportunity for retailers to effectively drive higher average order values or units per transactions."

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