$72 billion in online purchases forecast
By Greg Wiles
Bloomberg News Service
WASHINGTON — Online purchases will grab a larger portion of U.S. retail sales this year as they rise to $72.1 billion, according to a study of Internet retailing.
Internet buyers will account for almost one-quarter of all computer and software retail sales this year, while a little more than one out of every eight books sold will be purchased on the Web, said a study for Shop.org, an industry group.
Retailers Amazon.com Inc. and GSI Commerce Inc. along with travel seller Expedia Inc. are among the Internet companies projecting higher revenue this year. Internet sales are projected to rise 41 percent over last year's $51.3 billion and account for 3.2 percent of total retail sales of $2.25 trillion as more women join men to shop online, the report said.
"This is no longer a male-dominated, gadget-oriented medium," said Elaine Rubin, Shop.org's chairwoman. In years past, most sales came from men buying computers, while now men and women are using the Web to buy items ranging from airline tickets to consumer electronics.
The Internet will account for more than 5 percent of toy, travel, music and video, event ticket, book and computer purchases this year, the study said.
Internet sales accounted for 2.4 percent of total retail sales of $2.16 trillion last year, Shop.org said.
The Internet is influencing consumers' purchases at traditional stores and catalogs, said Peter Stanger, a vice president for the Boston Consulting Group, which prepared the study with data from Forrester Research Inc. He said shoppers increasingly are using the Web, catalogs and stores to research and make purchases.
"Going forward the boundaries will blur between what is transacted on line and what is transacted in stores," he said. Many retailers have noticed customers coming into shops with information from Web sites, and some shoppers are placing orders on line of items seen in catalogs, Stanger said.
Consumers may also be phoning catalog call centers to order items they've seen on the Internet, he said.
The report also found that online retailers' marketing costs are falling as they fine-tune ways to attract new customers and keep existing ones by providing better customer service and easier-to-use Web sites. Marketing costs per order fell to $12 last year from $20 in 2000 while the cost of acquiring a new customer declined to $14 from $29, the report said.
Travel will remain the largest sales category this year, with purchases forecast to increase to $20 billion from $14.1 billion last year. Computer hardware and software sales will rise to $7.9 billion from $5.9 billion, the report said.
The study was produced from a survey of more than 100 retailers.
