More Growth for Online Retail

Posted by Mark Brousseau

Despite entering a more mature phase in its evolution, online retail in both the United States and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc.

U.S. online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014, Forrester predicts. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting €114 billion by 2014.

"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru. "To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."

Despite consumers' increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester's data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.

The Forrester online retail forecasts for the US and the EU include business-to-consumer sales excluding auto, travel, and prescription drugs. The European Union forecast encompasses 17 Western European nations.

Highlights of the study include:

... In the United States, Web shopping will account for 8 percent of total retail sales by 2014.

...Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.

... By 2014, 53 percent of total retail sales in the United States will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.

What do you think?

What's Hot in e-Commerce

By Mark Brousseau

Will mobile commerce take over in 2009? Will consumers continue to browse online and shop offline … or will it be the other way around? What new uses for social networking sites will retailers find in the New Year? Guidance offers its thoughts on the hottest new trends for online retail and technology.

... Mobile will NOT be the killer app for eCommerce -- at least not as a shopping channel in and of itself. But it will become hugely useful as a companion to both online and offline shopping.

... Commerce will become even more collaborative. Social commerce enables interaction among shoppers in a variety of forms, while collaborative commerce takes it to the next level by enabling “the group” to purchase together, or have a say in product development.

... Corporations will “become” social. Larger companies will bring social networking in-house.

What do you think? Post your comment below.