By 2008, The Percentage of Broadband Users Will Increase to 83% of Total US Internet Users

Research & Markets: While both the number of new Internet users in the US and the number of online buyers are only growing at single-digit rates, e-marketer estimate that online sales in 2005 increased a hefty 25%. Baby boomers and digitally literate young adults, coupled with the spread of broadband access, are changing the way people shop online--and how Web merchants market to them.

The continued spread of broadband Internet access is another factor driving the growth of online shopping in the US. Nearly 43% of the online merchants who responded to a survey by Internet Retailer in June 2005 cited the spread of broadband Internet access as the key driver of online shopping growth. The improvement in Web retailing solutions was ranked as the second most important driving force in online shopping, at 31%.

According to estimates, 2004 was the year when broadband overtook dial-up as the predominant connection speed for US Internet users. In 2005, 60% of Internet users went online via a high-speed connection. By 2008, the percentage of broadband users will increase to 83% of total US Internet users.

Broadband penetration is a widely recognized enabler of a range of Internet activity. In October 2005, the Pew Internet & American Life Project examined the digital divide between broadband and narrowband users across a variety of Internet activities. The biggest difference in uptake between both populations was for transactional activities such as online banking (a 24-point differential), online buying (a 22-point differential) and online auctions (a 20-point differential).

Delving deeper into the broadband effect on retail e-commerce, Nielsen//NetRatings found that broadband consumers are likely to spend more dollars online, convert from shoppers to buyers at a higher rate, visit retail Web sites with greater frequency and spend more time online. Retail E-Commerce: Future Trends to their offering.

Publ 20040124