Forrester Research Projects US Online Retail Sales to Top $300 Billion by 2010

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 23, 2004--US online retail sales will more than double over the next six years, reaching $316 billion by 2010. According to a new report from Forrester Research, Inc. (Nasdaq: FORR), the growing population of online shopping households, combined with effective multichannel integration and site improvements from retailers, will drive eCommerce growth to account for 12 percent of total retail sales in 2010, up from nearly 7 percent in 2004.

"Significant behavioral changes by consumers and retailers will fuel online retail growth over the next six years," says Forrester Research Senior Analyst, Carrie Johnson. "While consumers continue to become more comfortable buying a variety of items online, retailers will apply what they have learned in the early days of online retailing to implement site enhancements that provide a greater return on investment and a better experience for customers."

“Significant behavioral changes by consumers and retailers will fuel online retail growth over the next six years”

US Ecommerce 2004 To 2010

-- Most online retail categories will grow between 10 percent and 20 percent compound annual growth rate (CAGR) over the next six years.

-- Categories including tools and hardware and garden supplies will experience above-average growth, as consumers become increasingly comfortable buying products that historically have seen slow growth online. Flowers will also experience an above-average spike as consumers continue to shift spending away from telephone orders.

-- As more retailers increase and improve their multichannel efforts, like in-store pickup, categories like home decor will see an increase in sales.

-- Although the number of new households that begin shopping online will slow significantly between 2004 and 2007, momentum will build again between 2007 and 2009 when half of US households will have broadband at home.

-- As the growth of online shoppers slows over the next two to three years, retailers will invest in one-to-one marketing efforts to help find new customers. By targeting blogs, chatrooms, and message boards, retailers will run appropriate ads while consumers are discussing a specific product, or content related to that product.

About Forrester Research

Forrester is an independent technology research company that provides pragmatic and forward-thinking advice about technology's impact on business. Business, marketing, and IT professionals worldwide collaborate with Forrester to align their technology investments with their business goals. Forrester offers products and services in four major areas: Research, Data, Consulting, and Community. Established in 1983, Forrester is headquartered in Cambridge, Mass. For additional information, visit www.forrester.com.

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