US ecommerce sales to surge

01 March 2011

NEW YORK: Online retail sales will continue to rise in the US and Europe over the period to 2015, driven by new technology and evolving consumer habits.

Research firm Forrester has published a study estimating that American revenues should climb by 10% annually in the next five years.

The organisation reported this channel expanded by 12.6% in 2010, reaching $176bn (€127bn; £109bn) in all.

Such an improvement built on the 11% acceleration recorded in 2009, as ecommerce maintained a healthy performance in spite of the adverse financial climate.

Looking ahead, Forrester argued the internet would yield sales of $279bn by 2015, boosted, in the first instance, by a greater uptake of various digital activities among shoppers.

Elsewhere, the enhanced role of smartphones and tablets, alongside the heightened status of innovative platforms like Groupon, is set to exert a similarly positive influence.

Overall, Forrester projected the web's share of revenues should increase from 8% in 2010 to 11% by the mid-point of the decade.

Sucharita Mulpuru, a principal analyst at the company, suggested the "cannibalisation" of sales from bricks and mortar outlets may pose a major obstacle.

"Companies need to think about the permanent implications of smaller margins on stores in the longer-term future and how their multichannel initiatives can help to offset this trend," Mulpuru said.

Separately, Forrester released analysis covering the online retail category in 17 European Union member states, and forecast returns would enjoy a double-digit lift in each of the coming five years.

By 2015, totals could hit €134bn across these countries, measured against €81bn in 2010.

In Western Europe, the sector logged an 18% uptick in 2010, and is expected to witness a 13% leap during 2011, after which time growth slows as "the market matures and buyer penetration begins to level off."

By 2015, an anticipated 68% of adult European netizens will have bought something via the internet, peaking at 80% in northern Europe, but falling below 50% in southern Europe.

At present, around 70% of the connected population from the Netherlands, Sweden and the UK have acquired goods and services in such a way, declining to 34% for Italy and Spain.

More specifically, Forrester predicted the web might capture 10% of UK transactions by 2012, making it among the most advanced nations on this metric.

"The online retail market in both the US and Western Europe remains strong, despite the challenging economy," said Patti Freeman Evans, Forrester's research director.

"In Europe, very strong growth in 2010 was fuelled by new online buyers and higher spend per capita on the demand side, as well as the launch of transactional websites by established offline players."

Data sourced from Forrester/Wall Street Journal; additional content by Warc staff