Tuesday, January 20, 2004

Online retail sales — spurred by new shoppers and more spending — will grow to $65 billion this year and will continue to increase to $117 billion by 2008, according to a new forecast by Jupiter Research.

This year, 111 million consumers will make online purchases — a 14 percent increase from last year. By 2008, there will be 151 million U.S. online shoppers, predicted Jupiter, an online research firm.

Buyers will spend 8 percent more this year — or $585 — online, Jupiter says. By 2008, buyers will spend $780 online.

Online retail accounts for a small portion of overall retail sales. This year, it will make up about 3 percent and will grow to 5 percent of overall sales by 2008, Jupiter predicts.

Jupiter’s online retail sales report does not include auto, travel and prescription drug sales.

Home improvement, housewares and small appliances will see the biggest growth. This year, the category will rake in about $5 billion — a 56 percent increase from last year. It will see $14.7 billion in online sales in 2008.

Retail analyst Patti Freeman Evans said the growth in online spending on home improvements and appliances is being driven by a proliferation of home decorating television shows and improvements in the Web sites of big industry players like Home Depot and Lowe’s.

Lowe’s offers in-store pick-up for its online consumers, she said.

About 40 percent of Sears Roebuck & Co.’s online orders are picked up in the stores, Ms. Evans said. In addition, 20 percent of those people picking up merchandise will purchase more items when they get there, she noted.

Online research should continue to play a role in offline purchases.

This year, 18 percent of all purchases made in traditional brick-and-mortar stores started with online research, said Jupiter. That will grow to 30 percent by 2008.

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