Online sales to top $100 billion by year end, says analyst group

Sure you’ve had your marketing budgets slashed and your staffing resources cut. But according to a recent survey focusing on online sales, you’re about to reap serious benefits from going to the ‘Net.

Forrester Research and Shop.org found in their study “State of Retailing Online 6.0,” that online sales have grown 48% from 2002 to $76 billion. And with a mark of optimism, they state that number will near $100 billion by the close of 2003.

Having lost 6% last year on their Internet efforts, the study of 130 retailers showed they were at break-even in 2002 and should soon show profitability. This despite the fact that the retailers were forced to cut their marketing budgets and to focus on customer generation methods that would give them more bang for their buck. The report shows that retailers were able to slice their per-transaction marketing costs almost in half.

This number reflects the changes in the whole industry as marketers aren’t getting gouged for attracting eyeballs like they were a few years ago. Instead, they are putting on their thinking caps and using more targeted methods like search engine matches to gain new customers and greater visibility.

Interestingly, the report notes that 63% of respondents upgraded their inventory management systems, which in turn helps them get a better handle on their order taking and fulfilment process. The report also shows an increase in the cooperation between in-store and online experiences, allowing for in-store returns and inventory checks.

Retailers are showing that this cooperation is paying off. They’re seeing a significant portion of their online customers – 46% – purchasing offline, as well. And 17% of the offline customers purchase online. 

The overall numbers show the success of their integration efforts: In 2003, online sales are expected to account for 4.5% of all retail sales. That’s a jump from 3.6% in 2003.

Are you finding this matches with what you’re experiencing in your neck of the e-commerce woods? Let me know at sgittlen@nww.com