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eCommerce retail sales expected to exceed $200 billion

May 25, 2006

According to a recent report conducted by Forrester Research, in 2003 eCommerce sales reached the $100 billion treshold. Now, according to the 9th annual "State of Retailing Online" survey done by Shop.org, eCommerce sales (including travel) will be up 20 percent this year, reaching $211 billion. Online sales excluding travel will reach $138 billion.

Forrester says that eCommerce sales rose 25 percent last year to $176 billion. And, again excluding travel, Internet retail sales rose 28 percent to $113 billion, representing 4.7 percent of total retail sales a year ago.

After the travel industry, the largest categories in 2006 will be computer hardware and software, autos and auto parts, apparel, accessories and footwear.

In 2006 the pet supplies, cosmetics and fragrances categories are expected to experience growth rates over 30 percent, more than any other categories.

Increasingly, retailing is becoming a multi-channel activity. With customers jumping online to compare prices, find gifts and research high-ticket items, retailers are using websites not only to sell online, but to increase sales offline.

The report found that over two-thirds of retailers have consistent pricing across channels and nearly half let customers buy and redeem gift cards online or in stores.

"Retailers have been focusing on integrating their websites and stores to better serve their customers, which is paying off for companies in the form of higher sales," said Scott Silverman of Shop.org. "By encouraging different channels to work together, instead of in isolation, everybody wins."

In fact, retailers reported that 22% of offline sales are influenced by Internet visits. The report also found that that websites enable retailers to reach entirely new customers. More than one-third (38%) of online customers were new customers.

To put the Shop.org numbers in context, the Department of Commerce (DoC) just released its estimate of US retail e-commerce sales for the first quarter of 2006. Adjusted for seasonal variations and holiday and trading-day differences, but not for price changes, it was approximately $25 billion.

That means the first quarter 2006 increased 25.4% over the first quarter of 2005. Unlike the Shop.org estimate, however, the DoC figures do not include travel and several other categories of sales.

Source: eMarketer



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