E-Commerce Growth to Outpace Total Retail Spending

New York, NY, April 25–E-commerce revenues jumped more than 25% last year, and annual gains look to continue to run in the healthy double-digit range through 2008, according to eMarketer estimates.

Long gone are the days when Web sites crashed and online retailers burned through investors’ money. Today, Internet retailers offer a stable shopping environment, and many of them are enjoying a healthy profit margin. At the same time, Internet users are becoming more sophisticated in utilizing multiple shopping channels to research and buy products.

eMarketer’s new report, E-Commerce in the US: Retail Trends, released today, estimates that US consumers will spend $84.5 billion online this year for retail goods and services, and that number will grow to $139 billion by 2008. This expected growth in US e-commerce will significantly outpace total retail spending over the next four years.

“Online shoppers are certainly responding to more sophisticated sites, and better-targeted marketing efforts,” said eMarketer Senior Analyst Jeffrey Grau, who authored the report. “We’re finding satisfied shoppers, profitable online retailers and increased revenues. The future of US e-commerce looks promising.”

Excluding travel, computers are still the biggest category for online purchasers, but a host of ‘non-tech’ products are growing rapidly as well, including apparel and home products. The report also includes findings from a recent study that show in 2003, 79% of all online retailers were profitable, up from 70% in 2002. Catalogers had the most profitable Web sites, with 28% operating margins, a 22% increase over 2002. Web-based retailers enjoyed profit margins of 15% in 2003, compared to 16% losses in 2002.

Key topics covered in E-Commerce in the US: Retail Trends include:
· What are the growth prospects for retail e-commerce?
· What are the biggest and fastest-growing online product categories?
· How do shoppers use search engines to conduct research and how can online marketers capitalize on this behavior?
· How are online retailers driving consumers to their Web sites? And how effective are they at converting visitors into buyers?