Online Retail Market in the US to Grow at a CAGR of 16% Through 2021: Technavio

Technavio has published a new report on the online retail market in the US from 2017-2021. (Graphic: Business Wire)

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LONDON--()--Technavio market research analysts forecast the online retail market in the US to grow at a CAGR of close to 16% during the forecast period, according to their latest report.

The market study covers the present scenario and growth prospects of the online retail market in the US market for 2017-2021. The report also lists PCs, smartphones, and tablets as the three major segments based on devices, of which PCs accounted for more than 42% of the market share in 2016.

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Technavio analysts highlight the following three market drivers that are contributing to the growth of the online retail market in the US:

  • Growing seasonal and holiday sales
  • Increase in time poverty and easy payment options
  • Free shipment of product delivery and hassle-free return policies

Growing seasonal and holiday sales

Online sales during festive seasons and holidays have increased in recent years and are contributing to the growth of the market. Online holiday retail sales in the US crossed USD 95 billion in 2016, an increase of over 12% compared to 2015. Offers such as free shipping and steep discounts have motivated the US consumers to make purchases online. Holiday sales through online retail during November and December amounted to over USD 55 billion in 2016.

Thanksgiving, Black Friday, and Cyber Monday are the days that see high amount of online shopping. Apparel, footwear and accessories, consumer electronics, computer hardware, and toys are the largest gaining product categories during the holiday season.

Increase in time poverty and easy payment options

The availability of easy and secure online payment options, facilities to track shipments, 24/7 customer support, and low costs have led to higher demand for online shopping. Customers can now choose from a variety of payment methods including credit cards, cash-on-delivery (COD), Internet banking, demand drafts, and cash-on-order. One of the popular methods of payment in the US is COD. Many US consumers are wary of sharing their debit or credit card details online, particularly with small and less well-known merchants. Consumers also rely on payment service providers such as PayPal, which allow them to pay without revealing card numbers.

“In addition, the US consumers are experiencing an increase in time poverty. Due to busy lifestyles, they find little time to fulfill their shopping needs and rely on online retailing to save time. Most of these consumers also spend a significant amount of time at work and at home with access to Internet-enabled devices,” says Poonam Saini, a lead analyst at Technavio for retail goods and services research.

Free shipment of product delivery and hassle-free return policies

Free shipping has become the standard for many online retailers in the US. These retailers are also offering hassle-free return policies to attract customers. Approximately 90% of online retailers in the US offer free shipping and in-store pickup. Retailers like JCPenney, Target, and Toys 'R' Us offer free shipping on all orders during holiday seasons. On similar lines, Walmart reduced its minimum purchase requirement for free shipping from USD 50 to USD 35, making 99% of the items sold by Walmart's online store eligible for free shipping.

“Convenient returns and exchange policies rank high in terms of importance to customers, as about 67% of consumers look at return policies before making a purchase,” says Poonam.

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About Technavio

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

If you are interested in more information, please contact our media team at media@technavio.com.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com

Release Summary

Technavio market research analysts forecast the online retail market in the US to grow at a CAGR of close to 16% during the forecast period, according to their latest report.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com