U.S. Online Shoppers Projected to Spend $370 Billion by 2017
It’s no surprise that e-commerce is becoming increasingly popular, but the results from a study by Forrester may surprise you with just how quickly it’s growing. Traditional retailers have started to take notice of the e-commerce trend, upping the ante by investing more money into their online retail divisions. Online sales have reached an all-time high and are expected to grow even more over the next five years. Here are the statistics and projections from that study.
Online Sales Will Make Up 10 Percent of All Sales by 2017
The growth of online retail sales is soaring past traditional retail store sales in both the United States and Europe. It is estimated that, in 2013, U.S. online retail sales will reach $262 billion; that’s a 13 percent increase from last year, making up 8 percent of all retail sales. These sales are expected to have a compound annual growth of 9 percent from 2012-2017, reaching $370 billion by 2017, in part due to traditional stores investing more in their e-commerce businesses. By 2017, e-commerce will make up 10 percent of all retail sales. The increase in using cell phones and tablets for shopping, and increased customer comfort with buying online, are expected to contribute as well.
Mobile Devices Allow Consumers to Spend More Time Online
Mobile devices are one source of the growth in online retail because they allow people to spend more time online. More time spent online means more buying opportunities, and thus, more sales for online retailers. Buyers use their mobile devices both to learn about products and to find the best prices for them. Traffic from tablet devices spikes during evening hours after consumers are home from work enjoying their leisure time. Online sales themselves have traditionally experienced spikes in the evening, too, rather than during business hours.
Traditional Retailers Becoming Savvy to Internet Shoppers
As traditional retail stores have been investing more in their online businesses, e-commerce has grown. Hybrid offerings like online purchases with in-store pickup have contributed to this trend. Nordstrom reported mobile devices accounted for 20 percent of their e-commerce sales for February 2013, up from a mere 4 percent just two years ago. The retail giant is expected to invest nearly $1 billion in its e-commerce division over the next five years. By the same token, Macy’s online sales grew by 41 percent during 2012. The retailer smartly used its brick-and-mortar stores to help fulfill online orders during the holiday season, thanks to a highly integrated inventory system. Macy’s hopes to eventually increase that to 650 integrated stores.
Loyalty Programs and Increased Comfort Drive Sales
The survey by Forrester says that the growth in e-commerce is not from new people shopping online, but rather from existing online shoppers spending more time and money in web stores. In 2012, 167 million people in the U.S. purchased something online. That number is expected to grow to 192 million by 2016. The monetary growth is partly driven by loyalty programs like Amazon Prime and ShopRunner, which offer services like free two-day shipping and other perks to their members. Another driving element is that customers are getting more comfortable making big purchases online, like furniture, appliances, and higher-end electronics.
E-commerce Boosts Job Market
Forrester’s research has found that the boom in e-commerce has been boosting the job market in the United States. They estimate that there are currently 400,000 people employed in e-commerce jobs in the U.S. This number is expected to reach more than 500,000 by 2017. More people employed, in turn, means more income that can be spent on online retail goods.
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