Internet Poised to Make Strong Gains in 2010

While the recession took a toll on shopping centers and strip malls across the country, the economic downturn has left the Internet poised to enter 2010 as a larger force in retail.  Bargain seekers are turning to the Internet in droves to compare prices, hunt for bargains, download coupons and seek advice from fellow shoppers. Retailers are taking notice and are beginning to divert capital away from storefronts and to Web sites, investing in the technology to make online shopping easier, faster and cheaper. 

There was a time when big brick-​and-​mortar retailers looked at their online divisions as less important, figuring stores should receive most of the company's resources and attention because they generate the bulk of the sales.  However, traditional chain stores are starting to realize that the benefit of an online store reaches far beyond the dollars generated by selling merchandise.  Web sites are a treasure trove of information about shopping behaviors and purchasing preferences. Retailers can track what each customer buys and use that information to target discounts and suggest products, said Lauren Freedman, president of E‑tailing Group Inc. in Chicago.

"There's no question the Internet has gone from being a curious sidebar to a main event," said Mark Cohen, marketing professor at Columbia Business School in New York and former chairman and CEO of Sears Canada Inc. "Customers are becoming completely comfortable with doing business on the Net. … This year is going to be a very good year for online shopping, tempered only be the negative effect of the economy."

Some analysts believe that Internet sales reached a turning point over the holidays; online sales rebounded to post a 5% gain from Nov. 1 through Christmas Eve, ComScore said. The strong finish bodes well for 2010, as online sales are expected to return to "reasonably healthy growth rates" this year.  Online data firm Forrester Research said the Web influenced $937 billion in U.S. store sales in 2009, a figure projected to reach $1.3 trillion by 2013, or about one-​third of total retail sales.  And according to Credit Suisse Securities LLC, e‑commerce sales will rise nearly 10% in 2010 to $144 billion after ending 2009 with an estimated 1.1% gain, the worst year on record.

"Internet poised to become bigger force in retail," Jones, Sandra.  The Chicago Tribune, January 6, 2010.