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Figures released by the <a href="http://www.census.gov/mrts/www/ecomm.html">US Census Bureau</a> in February put US online retail sales (excluding travel) at just under $110bn in 2006, or 2.8% of total retail sales. These numbers seem to be generally well accepted by market commentators, with any controversy reserved for those who are prepared to predict the future. A report recently published by <a href="http://www.jupiterresearch.com/bin/item.pl/home">JupiterResearch</a> suggests that US online retail sales will continue growing fairly modestly (up by 17% this year) before they plateau at 10-15% of total retail sales. This is at the low end of predictions in the US and is in line with the less bullish in our market (who shall remain nameless). At the higher end of predictions, <a href="http://www.leadpile.com/">Leadpile.com</a> has suggested that online retail sales will account for 25-30% of all US retail sales by 2012. This seems like a bit of a tall order as, to hit the $1tn (yes, that’s trillion) number, online sales would need to grow at around 45% per year for the next 6 years, when annual growth has been circa 25% since 2003. Although these numbers vary wildly, they are at least consistent in their direction. Online retail sales in the US are still expected to multiply several times before this channel matures and, in this context, guessing whether this will be by a factor of 3 or 10 is just that - a guess. For me, the most interesting aspect of the debate in the US at the moment is around the concept of “online-influenced” sales. These are sales that are transacted online, plus sales that are transacted offline that have been “encouraged” by online research. To be clear, this isn’t the same as the purchase of goods by people who have conducted online research before buying offline (thought to be about 85% of consumers in the US), but refers to sales that have come about as a direct consequence of online research – typically as a result of channel integration. This is very hard to measure of course but, according to JupiterResearch, 27% of all US retail sales were “online-influenced” in 2005 and they project that this will grow to 40% of all sales by 2011. That’s severaltrillion dollars. According to Jupiter, the message to retailers with both a physical store and an e-commerce operation is clear: “Seize the opportunity and integrate your offerings now”. I think this provides us with an insight into where we are heading in the UK, where the focus is still largely on retailers who haven’t yet created an effective e-commerce business - channel integration will soon become a big priority here too. But I've been wrong before… Steve Borges is the founder of <a href="http://www.biglight.net"> Biglight </a> , a specialist e-commerce consulting business.

<FormattedContent xmlns="http://www.e-consultancy.com/schema/formattedContent/"> <Paragraph>Figures released by the <Link URL="http://www.census.gov/mrts/www/ecomm.html" Window="New">US Census Bureau</Link> in February put US online retail sales (excluding travel) at just under $110bn in 2006, or 2.8% of total retail sales. These numbers seem to be generally well accepted by market commentators, with any controversy reserved for those who are prepared to predict the future.</Paragraph> <Paragraph>A report recently published by <Link URL="http://www.jupiterresearch.com/bin/item.pl/home" Window="New">JupiterResearch</Link> suggests that US online retail sales will continue growing fairly modestly (up by 17% this year) before they plateau at 10-15% of total retail sales. This is at the low end of predictions in the US and is in line with the less bullish in our market (who shall remain nameless).</Paragraph> <Paragraph>At the higher end of predictions, <Link URL="http://www.leadpile.com/" Window="New">Leadpile.com</Link> has suggested that online retail sales will account for 25-30% of all US retail sales by 2012. This seems like a bit of a tall order as, to hit the $1tn (yes, that’s trillion) number, online sales would need to grow at around 45% per year for the next 6 years, when annual growth has been circa 25% since 2003.</Paragraph> <Paragraph>Although these numbers vary wildly, they are at least consistent in their direction. Online retail sales in the US are still expected to multiply several times before this channel matures and, in this context, guessing whether this will be by a factor of 3 or 10 is just that - a guess.</Paragraph> <Paragraph>For me, the most interesting aspect of the debate in the US at the moment is around the concept of <Quote>“online-influenced”</Quote> sales. These are sales that are transacted online, plus sales that are transacted offline that have been “encouraged” by online research.</Paragraph> <Paragraph>To be clear, this isn’t the same as the purchase of goods by people who have conducted online research before buying offline (thought to be about 85% of consumers in the US), but refers to sales that have come about as a direct consequence of online research – typically as a result of channel integration.</Paragraph> <Paragraph>This is very hard to measure of course but, according to JupiterResearch, 27% of all US retail sales were “online-influenced” in 2005 and they project that this will grow to 40% of all sales by 2011. That’s <Emphasis>several</Emphasis><Emphasis>trillion dollars</Emphasis>.</Paragraph> <Paragraph>According to Jupiter, the message to retailers with both a physical store and an e-commerce operation is clear: <Quote>“Seize the opportunity and integrate your offerings now”. </Quote></Paragraph> <Paragraph>I think this provides us with an insight into where we are heading in the UK, where the focus is still largely on retailers who haven’t yet created an effective e-commerce business - channel integration will soon become a big priority here too. </Paragraph> <Paragraph>But I've been wrong before…</Paragraph> <Paragraph> <Quote> <Emphasis>Steve Borges is the founder of </Emphasis> </Quote> <Link URL="http://www.biglight.net" Window="New"> <Quote> <Emphasis>Biglight</Emphasis> </Quote> </Link> <Quote> <Emphasis>, a specialist e-commerce consulting business. </Emphasis> </Quote> </Paragraph> </FormattedContent>

2007-03-15T19:41:00+00:00

econsultancy_xml

In <a href="/blog/901-retail-week-review-targets-miss-the-multi-channel-point">last week's post</a>, I misquoted Terry Duddy when he predicted (and this is the corrected version) that online retail sales wouldn't be much more than 10-15% of total UK retail sales by 2015 – my apologies Terry. With my fingers somewhat burnt, I thought I’d play it safe this week and take a quick look at what’s being said in the US about online sales, now and in the future, to see if this helps inform the debate in the UK.

<FormattedContent xmlns="http://www.e-consultancy.com/schema/formattedContent/"> <Paragraph> <Emphasis>In <Link URL="/blog/901-retail-week-review-targets-miss-the-multi-channel-point" Window="New">last week's post</Link>, I misquoted Terry Duddy when he predicted (and this is the corrected version) that online retail sales wouldn't be much more than 10-15% of total UK retail sales by 2015 – my apologies Terry.</Emphasis> </Paragraph> <Paragraph>With my fingers somewhat burnt, I thought I’d play it safe this week and take a quick look at what’s being said in the US about online sales, now and in the future, to see if this helps inform the debate in the UK.</Paragraph> </FormattedContent>

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2007-03-16T11:43:00+00:00

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2009-04-28T22:44:54+01:00

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