Live from Boston: Internet Sales Booming: DMA Study
Internet-generated sales are expected to hit $24.2 billion this year, almost double last year’s $13.8 billion. Online catalog sales are expected to reach $110.6 billion in 2000, compared to $96.8 billion last year, according to a study released yesterday by the Direct Marketing Association at The DMA net.marketing Conference and Exhibition in Boston.
The study also found that sales from print catalogs are increasing at almost twice the rate of retail sales. Print catalog sales grew 11.5% annually from 1995 to 2000, while annual retail sales grew 6.7%. Consumer catalog sales this year are predicted to be $67.7 billion and will rise to$94 billion in 2005.
Business catalog sales are expected to reach $42.9 billion in 2000 and by 2005 will jump to $61.4 billion. The total annual compound growth rate for print catalogs over the next five years is expected to be 7%, slowing from 11.5% between 1995 to 2000.
The Internet is the fastest growing medium, generating 168.8% annual sales growth from 1995 to 2000. Interactive sales this year are expected to generate at total $24.2 billion, $8.6 billion in consumer sales and $15.6 billion in business sales. By 2005, consumers will spend $50.9 billion compared to $85.5 billion for business. The rate of growth slows dramatically for interactive sales from 168.8% over the last five years, to 41.3% from 2000 to 2005.
The study also found that retail sales growth, when compared to total U.S. sales, will grow at a slower pace over the next five years, 4.4% vs. 5.4% respectively. From 1995 to 2000, retail sales growth outpaced U.S. sales at a greater rate, 6.7% vs. 5.9% respectively.
H. Robert Wientzen, CEO of the DMA, told a crowd at the opening session yesterday that as of a few days ago, there were 28 million domains registered worldwide, 18 million of them dot-coms. He compared that to the 50 sites in January 1993.
He said the upcoming holiday season will be a record breaker, approaching $12 billion in online spending in the U.S. “This would be a healthy increase from $7 billion last year, $3 billion two years ago and $1 billion in 1997,” he said.
Business-to-business sales are even more impressive, he added, this year totaling as much as $1 trillion. That number is projected to rise to more than $6 trillion in five years. “That would mean 42% of total B-to-B market would be driven by the Web,” he said.
In addition, the study found that, worldwide online consumer spending is expected to approach $20 billion, and 85% increase over the last quarter of 1999, he said.
Wientzen also touched on issues of privacy, data security and remote sales tax. He reminded the group that the “DMA is attacking this complex issue on all fronts,” and that DMA members should signal their commitment to the safe and respectful use of marketing information by employing the DMA member logo.
The DMA plans to begin reporting catalog and Internet sales figures and projections on a quarterly, rather than annual basis.
