E-commerce Predicted to Grow by Double-Digits through 2015
Online retail in the U.S. is expected to continue on a double-digit growth trajectory over the next five years, according to a new forecast from Forrester Research. The independent research firm predicts that U.S. e-commerce spending will reach $278.9 billion by 2015.
Forrester’s forecast is based on a 10% compound annual growth rate through 2015, as well as the continuation of several key trends, including the ubiquity of consumer Web usage; their increased familiarity with — and preference for — online shopping; and ever-better e-commerce user experiences.
Forrester also credits new online shopping models — and “flash sales” and “daily deal” services in particular — with continuing to generate excitement among shoppers.
In 2010, U.S. online retail sales grew 12.6% to $176.2 billion, per the company. “This was unusual because Web sales growth had been consistently declining over the years,” according to Sucharita Mulpuru, principal analyst at Forrester and lead author of the report, “U.S. Online Retail Forecast, 2010 To 2015.”
“The reason for the reversal of the trend was that the growth rates in 2008 and 2009 were deflated by the recession that hit the retail sector particularly hard,” Mulpuru added. “2010 was simply a normalization of the trend as consumer behavior returns to normal.”
ADDITIONAL FACTORS DRIVING E-COMMERCE
While there are fewer new shoppers online every year, online shopping “holdouts” are increasingly giving in, and giving over credit-card information. Per the study, these are younger “millennials,” older “seniors,” or less technology-savvy shoppers compared to more “tenured” online shoppers.
In 2010, 5.5 million customers shopped for the first time, on average driving approximately 30% of the overall growth in 2010 e-commerce sales, Forrester estimates.
Also, while new shoppers are one component of the overall growth in Web shopping, a bigger component of e-commerce growth is the increased “wallet share” among existing Web shoppers.
In particular, they are increasing their spend in “traditional” online categories such as books and media products, while increasingly exploring high-touch, high-consideration goods, like furniture and home appliances. As a result, in 2010, 70% of the overall growth in e-commerce sales came from existing shoppers simply buying more online.[Source: “U.S. Online Retail Forecast, 2010 To 2015.” Forrester Research. 28 Feb. 2011. Web. 2 Mar. 2011.]