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Forrester Forecast: Double-Digit Growth For Online Retail In The US And Western Europe

Cambridge, Mass., March 8, 2010 . . . Despite entering a more mature phase in its evolution, online retail in both the US and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc. (Nasdaq: FORR). US online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting €114 billion by 2014. The top-line forecasts are available to Forrester RoleView™ clients; subscribers to Forrester’s ForecastView receive more-detailed forecast data.

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“Much of the overall retail sector’s growth in both the US and the EU over the next five years will come from the Internet,” said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru . “To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers’ increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser.”

Despite consumers’ increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester’s data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.

The Forrester online retail forecasts for the US and the EU include business-to-consumer sales excluding auto, travel, and prescription drugs. The European Union forecast encompasses 17 Western European nations and includes a country-by-country breakdown of online retail across the seven largest markets: France, Germany, Italy, the Netherlands, Spain, Sweden, and the UK. Highlights include:

US Online Retail Forecast, 2009-2014

• In the US, Web shopping will account for 8 percent of total retail sales by 2014.
• Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.
• By 2014, 53 percent of total retail sales in the US will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.

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