Online retail sales will grow by 10% a year for the next five years, and the web will influence 53% of U.S. retail sales by 2014, research and consulting firm Forrester Research Inc. predicts in a report released today.
Forrester forecasts U.S. retail sales will increase 11% in 2010 to $172.9 billion from $155.2 billion in 2009 and account for 7% of this year’s retail purchases, excluding autos, travel and prescription drugs. Forrester estimates U.S. e-retail sales also increased 11% last year, but only accounted for 6% of total retail sales. The increase this year is based on the web continuing to take market share from retail stores; the Forrester report cites a National Retail Federation projection of total retail sales growing only 2.5% in 2010, well below the 11% growth Forrester predicts for online sales.
By 2014, e-retail sales will total $249 billion, Forrester predicts in the study entitled U.S. Online Retail Forecast, 2009 to 2014, by analysts Sucharita Mulpuru and Peter Hult. The report also predicts sales influenced by the web that year will reach $1.409 trillion, and that the direct web sales and those influenced by the Internet will account for 53% of retail sales in 2014. The web accounted for or influenced 42% of retail sales in 2009, Forrester estimates.
Over the five-year period, Forrester predicts a 9% compound annual growth rate for sales influenced by the web. The report says 70% of U.S. online consumers already have researched products online and then bought them offline. However, retailers could do a better job of satisfying cross-channel shoppers, as only 61% of those who first researched online and then bought in stores say they were satisfied with the experience, versus 82% whose shopping trip began and ended in a store, the report says.
The report also notes that 154 million U.S. consumers made online purchases in 2009, representing 67% of those who use the Internet and a 4% increase from the prior year.
The report also breaks out predictions for three key retail categories: consumer electronics; apparel, accessories and footwear and computer hardware, software and peripherals:
- Consumer electronics: The ability to compare product features, search for low prices and read reviews makes the web a good fit for consumer electronics. Online sales in this category grew 17% last year to $13.6 billion, but still represented only 14% of total purchases of consumer electronics, suggesting room for growth.
- Apparel, accessories and footwear: Online sales grew 17% to $27 billion in 2009 and Forrester predicts double-digit growth for the next few years as web retailers adopt visual tools that mimic the tactile offline shopping experience.
- Computer hardware, software and peripherals: Online sales in this category grew 7% in 2009 to $27 billion. Given that the web already accounts for more than 50% of these products and that 90 million U.S. households owned PCs by the end of 2008, Forrester predicts single-digit increases for web sales in this category through the forecast period.
Here are Forrester’s projections for online retail sales (excluding autos, travel and prescription drugs) from 2010-2014 in billions, with the predicted percentage of total retail sales for each year and the percentage of total retail sales that will take place online or be influenced by the web:
- 2010: 172.9, 7%, 46%
- 2011: 191.7, 7%, 48%
- 2012: 210.0, 7%, 50%
- 2013: 229.8, 8%, 51%
- 2014: 248.7, 8%, 53%