Forrester has just released its US Online Retail Forecast, 2009 To 2014 and Western European Online Retail Forecast, 2009 To 2014. Both reports reveal that online sales in both the US and Western Europe will remain robust: US online retail sales are projected to rise from $155 billion in 2009 to $249 billion in 2014 – that’s a 10% compound annual growth rate (CAGR); and online retail sales in Western Europe will rise from €68 billion in 2009 to €114 billion in 2014 – or a 11% CAGR.
In the US, three product categories will continue to dominate online retail: apparel, footwear, and accessories; consumer electronics; and computer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US today.
In Western Europe, books, event tickets and clothing will top the categories purchased online.
In Northern European countries, markets where online retail sales are more mature, growth will be slower relative to Mediterranean countries. The UK will remain the largest market, worth an estimated €40 billion – or a 35% share of the total Western European market.
So, what makes online retail so strong?
- Convenience, selection, value and price drive online shopping behavior.
- Enhanced technologies, like innovative and rich content improve customer experience.
- Improvements in the supply-side increase customer satisfaction and drive growth: Some sophisticated retailers have implemented tactics to increase customer engagement and to develop better cross-channel executions, leaner inventories, and social shopping tools.
Multichannel is crucial for future retail growth
If retailers want to thrive, they will have to take and win the multichannel challenge. Over the next five years, much of the overall retail sector’s growth in both markets are indeed planned to come from the Internet. eBusiness professionals must make the most of this growth by facilitating a multichannel strategy that addresses consumers’ expectations, focusing on their need to move between offline and online channels and their increasing mobile and social behaviors.