Online Shopping to Grow � Are You Ready?

E-commerce sales will grow from $81 billion in 2005 to a whopping $144 million by 2010. However, to get your piece of pie you'll need to appeal a more mature, Web-savvy and influential shopper.

The good news for e-commerce businesses is that online retail sales are expected to grow from $81 billion in 2005 to $144 billion in 2010, according to a study released this week by JupiterResearch.

There's really no bad news, but the challenge for online merchants comes from the fact that after this year, the bulk of that growth will come from existing buyers rather new shoppers. And that means your customers are becoming more mature and more demanding when it comes to what they expect from online storefronts.

“The fact that the Internet will influence nearly half of total retail sales in 2010 is a staggering statistic.”

— David Schatsky
JupiterResearch

"Retailers can expect to be dealing with an increasingly experienced population of online shoppers," said JupiterResearch Analyst, Patti Freeman Evans. "The online retail environment is maturing, and online buyers have become more savvy about finding free shipping and deeper discounts," said Freeman Evans, author of "U.S. Online Retail Forecast, 2005 to 2010."

By 2010, 71 percent of online users will use the Internet to shop compared to 65 percent in 2005. However, the research states that online retailers will find it difficult to find new non-buyers to convert. Online retailers will rely more heavily on existing online shoppers to spend more than they have in previous years. That, of course, suggests that e-commerce operations with inefficient order processing and customer satisfaction could be in for some tough times.

Online and Offline World Collide
As online shopping matures, success can't be measured simply by numbers generated through your shopping cart. The report also predicts that the Internet will influence nearly half of all retail sales in 2010 (compared to just 27 percent in 2005). This projection, according to JupiterResearch, combines total sales transacted online with those carried out offline but encouraged by online research.

Over the next five years, offline sales will grow at a faster rate than online sales. Driving this growth are the 85 percent of online shoppers who said they used the Internet to research their offline purchases in 2005. The message to retailers with both a physical store and an e-commerce operation is clear: Seize the opportunity and integrate your offerings now.

"The fact that the Internet will influence nearly half of total retail sales in 2010 is a staggering statistic for a shopping channel that will have been around for little more than 15 years by 2010," said David Schatsky, senior vice president of research at JupiterResearch. "This presents an enormous opportunity for retailers that embrace a well-integrated, multi-channel operational strategy," he said.

JupiterResearch and this Web site are both owned by Juptermedia.

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