Plenty of Upside to Maturing Online Retail Market: Forrester
Non-travel online retail sales in the U.S. reached $175 billion in 2007, according to a new study from Forrester Research. While the growth rate is not as significant as in years past — reflecting a maturing channel — non-travel online sales should hit $335 billion by 2012.
Not all of this growth is benign. “The reality is that there is a channel shift happening, and consumers are in fact spending dollars online that had previously been spent in stores,” wrote Forrester analyst Sucharita Mulpuru.
The study also noted that online retail weathers economic downturns better than traditional brick-and-mortar stores, partly because online shoppers tend to be more affluent.
All this said, retail stores continue to be the most-preferred channel, with 74% of consumers indicating traditional stores are their favorite medium. Only 22% said online channels were their top choice. But online retailers were picked as the number-two choice by 52% of those surveyed.
Why the pushback? Nearly half of all consumers said they wanted the intended product immediately, while another 39% wanted to see the item before purchasing it. Just over one-quarter didn’t want to pay shipping costs, while 19% found the best price for the item offline. Twelve percent said they thought returns would be easier, if needed, if they bought the item through a store.
At $22.7 billion, apparel accessories and footwear represented the largest product category among online purchases, followed by computer hardware, software and peripherals ($20.7 billion); automobiles and auto parts ($16.8 billion); consumer electronics ($13.5 billion); and home furnishings ($12.3 billion).
