Good News For Internet Sales
 

September 20: Online Shopping Continues to Grow as Consumers Turn to Internet

Despite a softening U.S. economy, the number of online users and buyers continues to grow, according to a new report from eMarketer, a market research firm in New York.

The report, which aggregates and analyzes data from more than 100 research organizations, includes estimates for U.S. business-to-consumer e-commerce revenues in 2001. eMarketer says that such revenues, which totaled $38.3 billion last year, will quadruple to $156 billion by 2005.

The report also says the online buying population continues to grow, reaching 79.3 million this year. A growing number of consumers are opting to buy from trusted names from the offline world. Traditional merchants such as L.L. Bean, Wal-Mart and Kmart have expanded their online operations, often at the expense of pure dot-coms.

"It's clear that the Internet has been accepted and is evolving as a key distribution channel-not a separate business entity-for traditional merchants," said Geoff Ramsey, CEO and co-founder of eMarketer. "E-commerce has become a strategic imperative for all retail merchants since consumers like to shop seamlessly across channels, including the Internet. Moreover, the lines are rapidly blurring between traditional business operations and the internet pure-plays, to the benefit of the companies with the strongest brand names, largest customer bases and strongest financial positions."

While the top 10 traditional retailers move forward, pure-plays such as Amazon.com, seeking to survive, are venturing into traditional merchant waters, striking distribution deals with physical outlets, such as Circuit City, Toys 'R Us and Target.

Key findings from the survey say:

The number of U.S. Internet users (116.5 million in 2000) will increase to 184.1 million by 2005.
Americans buying online will more than double, from 64.1 million in 2000 to 130 million by 2005.
Giga Information Group's data indicate that click-and-mortar companies will dominate Internet sales in 2001, as they did in 2000.
Alexa Research reports that 33 sites in the top 50 have multi-channel operations, while only 17 are pure dot-coms.
eMarketer places the online customer conversion ratio at 2.9% for 2000, an improvement from 1.9% of 1999. For 2001, the ratio will jump to 3.5% as e-tailers attract and win new customers with more targeted, customized marketing campaigns.
By year-end 2001, 37% of all teens (14 to 17) online will have purchased something on the web, up from 30% in 2000.
Visa International places online credit-card fraud rates between 25 cents and 28 cents per every $100 charged, significantly higher than the 7 cents for all transactions.
Consumers are "overwhelmingly" fearful about the theft of credit-card data online, according to Jupiter Media Metrix, New York. Nearly 81% of US consumers are afraid that their card number will be intercepted online.

Source: Red Herring