ONLINE RETAIL SPENDING WILL REACH $144 BILLION IN 2010,

JupiterResearch: US. Forecasts that online retail spending will increase from $81 billion in 2005 to $95 billion in

2006, and will grow to $144 billion in 2010. The key driver of online sales growth beyond 2006 will shift from obtaining new buyers to increasing the spending of existing buyers. J

By

2010, 71% of online users will use the Internet to shop compared to 65% in 2005, however, online retailers will find it difficult to find new non-buyers to convert. Online retailers will rely heavily on existing online shoppers to spend more than compared with previous years.

Retailers can expect to be dealing with an increasingly experienced population of online shoppers.The online retail environment is maturing, and online buyers have become more savvy about finding free shipping and deeper discounts.

The Internet will influence nearly half of total retail sales in

2010, compared to just 27% in 2005. This projection combines total sales transacted online with those carried out off line but encouraged by online research. These offline sales will grow at a faster rate than online sales over the next five years, indicating both the need and opportunity for multichannel retailers to integrate their offerings. Driving this growth are the 85% of online shoppers who said they used the Internet to research their offline purchases in 2005.

The fact that the Internet will influence nearly half of total retail sales in

2010 is staggering statistic for a shopping channel that will have been around for little more than 15 years by 2010,. This presents an enormous opportunity for retailers that embrace a well-integrated multichannel operational strategy.

U.S. Online Retail Forecast, 2005 to

2010 Publ 20060206