Unless you've been living under a rock for the past few years, you know that US eCommerce sales are growing fast. You might also know that eCommerce has become the largest "storefront" for many retailers. But there are undoubtedly things about eCommerce that you might not know, so in honor of all the kids going back to school, I thought I'd whip up a little true-or-false quiz about US eCommerce.

1. Web commerce will celebrate its 10th Christmas holiday in 2004. True! While consumers could buy online via CompuServe or Prodigy many years earlier, the first Web transactions happened on sites like 1-800-FLOWERS.COM, eBay, and Amazon.com in 1995, making holiday 2004 the 10th holiday season for some Web sellers. Congratulations to those eCommerce survivors and good luck for continued sales success!

2. US eCommerce sales will break the $300-billion mark by 2010. True! Our updated forecast shows that US online sales will grow from $144 billion this year to more than $316 billion in 2010, reflecting a 14% compound annual growth rate -- and an eye-popping 12% of all US retail sales. The three largest categories in 2010 will be travel ($119 billion), home products ($43 billion), and apparel ($28 billion).

3. More than one-fourth of all consumer electronics will be sold online by 2010. False! (Had to make sure you were paying attention.) Our projections show that 22% of consumer electronics will be sold via the Web in 2010 -- representing more than $16 billion of plasma TVs, iPods, TiVos, camera phones, and who knows what other gadgets that will be invented in the next few years.

4. Web sales will eclipse catalog sales by 2006. True and false. The answer depends on who we ask and measure, but it is true to say that 2005 and 2006 will be the cutover years for many catalogers with Web sites -- when Web sales exceed catalog sales. (Note: Recent Direct Marketing Association data shows that consumer catalog sales of general merchandise will be $86.7 billion in 2004 and $108 billion in 2008 -- suggesting that the industrywide crossover will occur between 2006 and 2007). This is not to say that catalogs are going the way of the dodo bird, but it does mean that catalog-centric retailers like NormThompson, L.L.Bean, The Sharper Image, and Williams-Sonoma are all currently examining the role in 2010 of catalogs and call centers in their business.

5. If your company does not have a person in charge of multichannel strategy and projects, you're going to be left in the dust in 2010. True. This is our opinion, but many leading retailers have elevated executives from the online organization to broader roles with titles like VP Multichannel Programs, VP Multichannel Marketing, and GMM Multichannel Merchandising. If you want more of our opinions on the organizational issues associated with a fast-growing eCommerce and multichannel retail business, drop me a line -- we'd be happy to benchmark your organization and offer our suggestion for your 2010 plans.

Hopefully you passed my little test -- now get back to tweaking your Web sites for the holiday madness!



Kate Delhagen
Vice President, Retail Research

P.S. We're currently auditing the multichannel shopping experiences delivered by more than 20 leading retailers. Watch for our results to be unveiled at our Consumer Forum!

Research Referenced In This Issue Apple Enters The European Music Market (34723) Asian Market Dynamics Define SCM Needs (35018) Benchmark 2004 Data Overview (34278)    How AD:TECH Panelists Boosted Conversion Rates (34989) IAC Travel Scales The Great Wall With Its Purchase Of Chinese Travel Site eLong.net (35087) PayPal Dominates The UK's New Payments Market (35077) Q2 2004 Online Sales: Seasonality Tempers Sales (35078) Selecting A B2C Site Analytics Product (34735) Supply Chain Upgrades Can Boost M&S (35008) Ten Retail Technology Predictions For 2004 (33709) The Best Email Marketing Service Providers (34437) US eCommerce Overview: 2004 To 2010 (34576) Who Cares About Catalogs? (16012) Why Marketing Should Own The Contact Center (34134)

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