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Online retail sales touch $175 bn in US: Forrester Research
 
Indiantelevision.com Team

(5 February 2008 4:25 pm)

 

MUMBAI: Online retail sales in the US for 2007 have reached $175 billion, a 21 per cent increase over $144.6 billion in 2006, says a report from Forrester Research Inc.

However, this is the first significant drop in growth after years of around 25 per cent growth. In addition, according to Forrester Research projections, it will be far from the last.

 

The firm's forecasts for online retail sales are:

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

Though the year-over-year growth percentage for online commerce represents decline and a maturation of the e-commerce industry, it is important to note that the industry will add approximately $30 billion in additional revenue every year for the next five years.

 

Forrester Research principal analyst and lead author of the report US E-commerce Forecast: 2008 to 2012, Sucharita Mulpuru says, "This is a sizable amount, the growth rate remains significant. E-commerce continues its double-digit year-over-year growth rate in part because sales are shifting away from stores and in part because online shoppers are less sensitive to adverse economic conditions than the average US consumer."

The report also 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, and online shoppers tend not to browse.

The in-store experience is better for most customers because by shopping in stores, consumers can touch and feel items, avoid issues surrounding returns, and avert pesky shipping costs, the report says.

Moreover, while web stores offer a wide variety of products, online shoppers generally are not browsers, the report adds. While catalogues can often serve to drive customers to new products or stores, the spearfishing mentality of most online shoppers means there is less opportunity for retailers to effectively drive higher average order values or units per transactions.

"To continue to grow their sales as the overall growth rate of online sales decreases, e-retailers must devise new strategies," added Mulpuru.

 
 
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