Just three years after topping the $100 billion mark, online shopping will increase 20 percent in 2006 to $211.4 billion, according to an annual study.
The "2006 State of Retailing Online" study, conducted by the research firm Forrester Research with the online-retail association Shop.org, said that online sales account for nearly 7 percent of the total retail market. It also found that such sales rose 25 percent to $176.4 billion in 2005.
The largest sales category is online travel, which is expected to grow about 17 percent in 2006 to $73.4 billion, Forrester said. Excluding travel, 2006 sales will reach $138 billion. The largest non-travel category is expected to be computer hardware and software, which is predicted to rise nearly 17 percent to $16.8 billion. The apparel, accessories and footwear segment is expected to be $13.8 billion.
The study noted that as customers increasingly use the Internet to compare prices, find gift ideas and research products, retailers rely on their websites not only to sell merchandise but also to increase sales at their stores. To create a true multichannel environment, retailers are employing a variety of different strategies, it added. More than two-thirds of retailers have consistent pricing across channels (79 percent) and almost half (46 percent) allow their customers to buy and redeem gift cards online and in stores. Additionally, a number of companies give customers the ability to accrue loyalty program points across channels (33 percent) and offer in-store product information online (26 percent).
Retailers recognize the importance that the online channel plays in overall sales, reporting that 22 percent of offline sales are influenced by the Web, Forrester said. Websites can also give retailers an opportunity to reach out to an entire new customer base, as more than one-third (38 percent) of online customers are new to a company’s entire business.
The study included survey results from 174 online retailers.