Online retailers post gains - East Valley Tribune: Business

Online retailers post gains

Print
Font Size:
Default font size
Larger font size

Posted: Friday, May 16, 2003 10:18 am | Updated: 1:45 pm, Thu Oct 6, 2011.

While most U.S. retailers’ sales sagged in 2002, online sales soared.

U. S. shoppers spent $76 billion online in 2002, 48 percent more than a year earlier, according to the annual "State of Retailing Online" study released Thursday by Shop.org and Forrester Research.

Shop.org is the online division of the National Retail Federation, an industry trade organization. Forrester Research is a consulting firm specializing in the impact of technology on U.S. businesses.

The study predicts that online retailing will grow 26 percent this year, pulling in $96 billion in revenue.

Online sales still make up less than 4 percent of the $2 trillion in total U.S. retail sales for 2002, said Carrie Johnson, Forrester Research senior analyst. But she said the Internet will continue to gobble up a bigger and bigger share of the shopping pot.

"To grow to $76 billion in just seven years is phenomenal," Johnson said. "Within five years it will be 8 percent to 9 percent."

The growth is lopsided, with some categories speeding down the cybershopping highway, said Ray Greenly, vice president of research at Shop.org.

Last year, 32 percent of the computer hardware and software sold in the country was sold online, he said. And 17 percent of the event tickets were bought on the Internet.

The study identified seven product categories that are expected to grow by doubledigits next year: Health and beauty products; clothing; flowers, cards and gifts; sporting goods; jewelry and luxury goods; consumer electronics; and computer hardware and software.

Much of the new growth is sparked by the changing demographics of online shoppers, Greenly said.

Initially, affluent men were the biggest online purchasers, he said, because they were the biggest computer users. But now more women are getting connected and the pool of online shoppers is "becoming more typical of the mass market," Greenly said.

That has led to a surge in sales for categories such as clothing and beauty products.

More and more so-called "brick-and-mortar" retailers are beefing up their online sites and allowing products bought online to be returned to mall stores, and that has helped spark the explosion of online sales in categories such as clothing, Johnson said.

And it has inspired more confidence among the average shopper about buying on the Internet.

Retailers who are in the malls and on the Web reported in the study that 46 percent of their online customers also shop in their stores. And 17 percent of the regular store shoppers also purchase products online. The online-offline retailers also said online browsing influenced 15 percent of their instore sales.

Online retailing also is getting more profitable.

S even in 10 retailers reported their online business was profitable in 2002, up from 56 percent who said that a year earlier.

"In a time when the retail industry has been extremely challenged, it is encouraging to see the online channel continue to grow, and even better, start to make money," said Kate Delhagen, Forrester’s Consumer Markets research director. "Last year was about breaking even, 2003 is about generating profits."

  • Discuss

Attorney General Forum - Question 1

Attorney General candidates Republican Mark Brnovich and Democrat Felecia Rotellini debate at ...

'EV Women in Business'

A PDF of the Tribune special section, featuring a mix of sponsored content from our loyal advertisers and newsroom coverage of the East Valley business community.

Your Az Jobs