Not even a poor economy can pull shoppers away from the tempting glow of the computer screen and clicking through all 14 available colors of those bed sheets or shoes.
Retail sales overall are expected to rise a modest 3.5 percent this year, but online sales — the fastest-growing channel of the industry — are expected to rise 17 percent.
Online sales are expected to reach $204 billion this year, according to a study set to be released today by the National Retail Federation (NRF), a Washington trade group, and Forrester Research Inc., a Cambridge, Mass., market research company.
Sales of clothes, computers and cars are expected to drive online retail growth.
But shoppers shouldn’t expect the bargains they once found on the Internet. Only one-third of online retailers plan to offer free shipping deals — a favorite among online shoppers — and one-quarter say they plan to issue discount coupons , according to the report. That’s a significant decline from the 85 percent and 82 percent of retailers, respectively, that previously used such promotions to draw shoppers.
Online sales are expected to account for 7 percent of the total retail industry this year. Two types of shoppers are responsible for much of the industry’s growth: those looking for bargains and those looking for convenience, said Sucharita Mulpuru, a senior analyst at Forrester Research and lead author of the report. Bargain shoppers use the Web to research the lowest prices, while convenience shoppers are usually affluent and use the Web to browse.
While online retailers are expected to weather an economic slowdown better than others, they are not immune from a downturn. The 17 percent growth forecast this year would represent the smallest year-over-year percentage increase in online sales.
Online retail sales in the United States rose 22 percent to $175 billion last year.
In comparison, total retail sales are expected to rise 3.5 percent this year to $2.5 trillion, according to the report. A 3.5 percent increase would make 2008 the weakest year for retail sales since 2002.
“The fact that online sales will increase substantially this year demonstrates the resilience of the channel and is a testament to the value and convenience most customers find when shopping online,” said Scott Silverman, executive director of Shop.org, the digital retail division of the NRF.
But many of the online purchases are expected to be transactions that would have otherwise been spent in brick-and-mortar stores, as one channel cannibalizes another, according to the report.
As the number of new Internet surfers levels out, online retailers are looking at ways to retain existing customers as well as acquire new ones.
Online retailers also say they are looking to add social networking programs to find new customers. Blogs and message boards are expected to be popular as well because they are relatively cheap to set up and operate.
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