Online sales to rise 20 percent in 2006
Online sales are expected to rise 20 percent this year to $211
billion, with pet supplies and cosmetics experiencing leading growth,
according to a report to be published on Tuesday.
Internet has more than doubled in the three years through 2006 as
more retailers offer consistent prices on their Web sites and in their
brick-and-mortar outlets, and use gift cards and loyalty programs to
increase sales, according to Forrester Research and Shop.org's annual
State of Retailing Online study.
Excluding travel, 2006 sales are expected to increase 22 percent to $138 billion.
"Online is a key growth driver for retail overall," said Shop.org
Executive Director Scott Silverman. "It's going to be a bellwether for
Computer hardware and software, cars, and apparel, accessories and
footwear are expected to be the largest non-travel categories driving
the increase, with anticipated sales of $16.8 billion, $15.9 billion
and $13.8 billion, respectively.
But sales of pet supplies, cosmetics and fragrances will increase
faster than other categories at growth rates of over 30 percent, the
Last year, online sales rose 25 percent to $176.4 billion, with 28
percent growth in online purchases excluding travel. Total Internet
sales in 2004 and 2003 reached $141.4 billion and $114.1 billion,
respectively, Silverman said.
"I think we're still looking for the next several years (for) growth
over 20 percent per year," he said, adding that growth closer to 30
percent was probably not sustainable.
The National Retail Federation has estimated that retail industry
sales, which exclude automobiles, gas stations and restaurants, will
increase 4.7 percent in 2006.
Gift cards offered by nearly half of all online retailers and
loyalty programs offered by a third have helped increase sales, the
study found. Additionally, greater integration between retailers'
traditional stores and their Web sites have alleviated pricing
confusion and increased loyalty, Silverman said.