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Amazon drives online retail growth

News, 04 May 2016
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NEW YORK: Amazon alone accounted for over half of all online retail growth in the US last year, according to a new study from Forrester Research.

The market research company estimated that the online retail giant took $23bn more in e-commerce sales in 2015 than in 2014 and said this amounted to 60% of growth in the sector.

While most significant retailers have embraced a shift to omnichannel, online sales still only account for 8% of total retail sales, although a greater proportion is 'web-impacted'.

'You better be able to do it either way,' advised Nick Egelanian, president of retail development consultants SiteWorks International.

'If you have brick and mortar, you have to be able fulfil by mail,' he told Retail Dive. 'You have to be able to do it all the ways in which a customer wants."

That necessity has imposed additional burdens on retailers, Forrester noted. "In particular, customers expect packages to arrive faster, so any economies of scale that may have come from volume discounts from carriers quickly vanish when retailers must pay to expedite orders."

And it suggested that merchandising will play an increasingly important role in the future, especially now that Amazon has moved into private-label clothing brands.

''The future death knell for a retailer will be dependence on broadly available mass-market commodities as firms like Amazon and other pure plays win all price wars,' said report author Sucharita Mulpuru.

Another finding was that the mobile shopping experience remains frustrating for many, with 78% of people surveyed complaining of the hindrances of small screens and slow loading times. Consequently, most prefer to use this channel for search rather than purchase.

For the future Forrester forecast total online retail sales in the US would pass $500bn by 2020, up from $373bn this year.

Data sourced from Retail Dive; additional content by Warc staff

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