Online Retail Sales Predicted to Hit $370B by 2017
Online retail in the U.S. continues to grow at a rapid rate, outpacing sales growth at traditional stores and stealing market share from them. New research from Forrester Research predicts that online retail in 2013 will reach $262 billion — a rise of 13% over 2012’s $231 billion in online sales and representing 8% of the total retail pie.
U.S. online retail sales will reach $370 billion by 2017, up from $231 billion in 2013 — a 10% compound annual growth rate (CAGR) over the next five years, according to Forrester’s latest U.S. online retail sales forecasts. This growth will continue as consumers become more comfortable with purchasing online.
In the U.S., factors such as significant investment in multichannel capabilities (e.g., endless-aisle capabilities, in-store pickup) by large retailers and the rapid adoption of smartphones and tablets are key drivers of the continued growth in the online retail sector. Additionally, notes Analyst Sucharita Mulpuru in a blog post, a very positive byproduct of this rapid growth is the total number of employment opportunities that the web retailing sector has created since its inception. Forrester and Shop.org estimate that more than 400,000 individuals are employed by eCommerce companies in the U.S. and that figure will reach 500,000+ by 2017.
Little of ecommerce’s growth can be attributed to new shoppers, as only 4 million people are expected to shop online for the first time in 2013, says Forrester. Rather, growth is coming from existing online shoppers who are spending more time and money — and in a wider variety of categories — online. Typically, early shoppers begin with “low-consideration” goods like MP3s and movies, moving up the ladder to “high-touch, high-consideration” items like furniture and appliances over time.[Source: “U.S. Online Retail Sales to Reach $370 Billion by 2017.” Forrester Research. 13 Mar. 2013. Web. 15 Mar. 2013.]