Online Sales to Comprise 9% of All Retail by 2016

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New York—With Cyber Mondays hitting all time sales records over the last two years, it should come as no surprise that online sales are expected to continue to grab a larger portion of the retail pie.

In a report released Monday by Forrester Research, U.S. consumers spent more than $200 billion in 2011 making purchases online. That’s expected to increase to $327 billion by 2016. According to Sucharita Mulpuru, analyst at Forrester, online sales will make up almost 9% of all sales by 2016, up from about 7% of all sales today.

Mulpuru says that e-commerce growth is being driven by several factors: “consumers’ greater comfort level with purchasing various categories online, broader web shopping capabilities with mobile and tablet (iPad) devices, innovative new shopping models that divert spend away from physical stores (such as flash sales, subscription models), online loyalty programs, and aggressive promotional offers from web retailers.”

53% of U.S. Population Bought Online in 2011

Moreover, consumers are so comfortable shopping online that more shop at least every day. Last year, 167 million consumers — some 53% of the U.S. population — purchased something online. That number is expected to grow to 192 million, or 56% of the population, by 2016. Mulpuru also projects that consumers’ average yearly online spending will increase from $1,207 per person in 2011 to $1,738 per person by 2016.

Shoppers are expanding what categories they shop online as well. In 2001, Forrester reported that only three of 30 retail categories were able to attribute more than 20% of sales to online channels. That number grew to eight categories by 2011 and is expected to increase to 14 by 2016.

The belief that they can find a better deal online is also driving consumers to e-commerce sites, Forrester reports. “Online shoppers believe that promotions available online are even better than what they could find elsewhere.”

F-Commerce? Not So Much…

But Mulpuru is more skeptical about F-commerce’s future. F-commerce, or using Facebook and other social media outlets, to make online sales. Since Facebook is the most visited website in the world, some analysts speculated that making the jump into online sales could be a boom, potentially even bigger than Amazon and PayPal.

Nonetheless, over the past year, Gap Inc., JCPenney and Nordstrom have all opened and closed storefronts on Facebook.

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop,” Mulpuru said. “But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

In other news in the report, Forrester projected that online sales in Europe are expected to amount to 171 billion euros (about $230 billion) in Europe by 2016 up from 96.7 billion euros (about $130 billion) in 2011.


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