We've just updated our annual five-year US eCommerce forecast. Here's a quick overview:

1) In 2003, US eCommerce will reach nearly $96 billion -- about the size of The Home Depot and J. C. Penney combined. By 2008, US eCommerce will reach nearly $230 billion -- about the size of Wal-Mart today. If you thought Wal-Mart grew quickly, it took the Bentonville gang 40 years to break $230 billion; US eCommerce will break that barrier within a baker's dozen years from the year Amazon.com logged its first 100-order day, 1995. With growth that fast, who can deny the notion of Internet time anymore?

2) More than 10% of all US retail sales will happen online by 2008. (Even Jeff Bezos agrees!) In four categories -- computer hardware and software, tickets, books, and travel -- online sales already account for more than 10% of all sales; and toys, video games, and consumer electronics are close behind. Even apparel -- which many thought would not sell online -- is growing quickly and will see at least 4% of all sales online before year-end. By 2008, 11 categories will see 10% or more of total sales from the Web.

3) Amazon.com and eBay continue to innovate. You'd think breaking even (Amazon) or making lots of money (eBay) might result in complacency. Not quite. Amazon will be introducing several new categories this fall -- copying its apparel tab model and capitalizing on some up-and-coming categories. Carrie Johnson is feverishly working on a report about Amazon's future -- look for it in late August. eBay just announced a stock split -- how 1999. More importantly, eBay continues to thrive with a burgeoning mix of new and used items, an intense focus on international expansion, and an eye for enabling technologies like PayPal, making it the most profitable eCommerce company to date.

4) Multichannel retailers like Circuit City, The Sharper Image, and REI that have taken the Web seriously and integrated it into their core retail operations continue to see above average growth rates online. We always said that as the Web went mainstream, existing retail brands that are able to create great online shopping experiences will capture their share -- or more -- of online sales. To learn how your company can do the same, read Selling To Mainstream Consumers, The Minority Report: Selling To Ethnic Groups, and Multichannel Best Practices: Sears And REI. And join us in NYC on September 21-23 as we grill, er, host, leading retail and consumer marketing executives.

Hope to see you there!



Kate Delhagen
Consumer Markets Research Director

P.S. In case you're wondering what the largest single online category is -- it's travel! US consumers will spend more than $27 billion online this year on airline tickets, hotel rooms, rental cars, and packages -- though many of those dollars are deal-driven sales. To learn more, read Henry Harteveldt's recent travel research Brands Don't Matter To Web's Mercenary Travelers.

Research Referenced In This Issue If you printed this email, get links to the research featured in this week's issue by going to www.forrester.com/go and entering the five-digit number of the report you'd like to read. Brands Don't Matter To Web's Mercenary Travelers (16915) Comparing Amazon.com And eBay Shoppers (15866) Consumer Technology Optimism Follows The Market (17224) Getting Inside The Heads Of Retail CIOs (16766) Lowe's Beats The Home Depot At Experience (17187) Multichannel Best Practices: Sears And REI (15485) Online Credit Card Security Confidence Erodes (17220) Q2 2003 Online Sales: Same (Old) Growth Story (17238) RIP: The Online Consumer, 1998 To 2003 (17225) Selling To Mainstream Consumers (15483) Shoppers Rank Wal-Mart, Target, And Kmart (17213) Store-Specific Pricing Lifts Retail Profitability (16876) The Digital Divide Still Haunts The US (17219) The Increasing Significance Of Price Over Brand (17197) The Minority Report: Selling To Ethnic Groups (16721)    The Truth About Europe's Online Growth (17087) US eCommerce Overview: 2003 To 2008 (16875) Winning In A Wal-Mart World (15484)

EMAIL: Email this issue to a colleague.

PRINT: View a printer-friendly version of this issue.

VIEW ARCHIVE: View past issues of First Look.

TECHNICAL SUPPORT: Call the Client Resource Center
1 866/FORRESTER (1 866/367-7378) or +1 617/613-5730

UNSUBSCRIBE: We hope you like First Look. But if you want to unsubscribe, please go to our email subscriptions page.