US. Online sales in the US will top US$200 billion this year, up +20% from 2005 – nearly double what online sales were just three years ago, according to a new study by US body National Retail Federation.
Online sales are projected to be US$211.4 billion in 2006 compared to US$176.4 billion in 2005, according to the National Retail Foundation’s online division, Shop.org.
“This is the real growth engine for the retail industry overall,” said Scott Silverman, Executive Director of Shop.org. Retail sales are growing +3% a year, versus double-digit growth online.
But the rate of growth is slowing, according to the latest data published in USA Today. Sales jumped +51% in 2003 from 2002, +24% in 2004 and +25% in 2005.
Travel is by far the largest type of product bought online, making up nearly one-third of all online purchases, according to the Shop.org survey of 174 online retailers. Online travel sales hit US$62.8 billion in 2005 and are projected to rise an additional +17% in 2006.
“Consumer comfort and familiarity with the Internet has been a hurdle to growth in the past,” Silverman was quoted as saying. “But people are used to the Internet now, for e-mail and doing research. If you aren’t in that game (as a retailer), you’re at a huge disadvantage.”
Retailers are trying to capitalise on growing comfort with shopping online by closely integrating their stores with telephone, catalogue and online ordering.
More retailers are giving in-store and telephone salespeople access to the Web for information, prices and ordering. They also are doing more cross-promotions, such as getting a coupon online to use in a store.
“You want that seamless shopping experience, between the Web, catalogue operations and stores,” Silverman said.
Many retailers have in-store kiosks that let customers order online if they don’t find the right product in the store.
JC Penney will finish rolling out access to its website (www.jcp.com) at all of its 35,000 check-out registers in August. The site lets salespeople offer customers sizes or colours of products not in the store.
In-store Web access also lets customers get help with issues such as how to measure a window correctly or how to buy the correct-size bra, says Richard Last, Vice-President of Merchandising for jcp.com.
“We can offer a lot of complementary products that are not available in the store,” Last said. “We have a strong line of infant and toddler clothes in the stores, but online we can supplement that with infant furniture – everything for the baby’s room.”
The website is the fastest-growing business for the retailer. JC Penney’s online sales rose +17% in April, on top of a +45% upswing in 2005.
Last expects retailers in the “soft goods” business, such as department and clothing stores, to continue to improve Web use.