E-tailing Is Accelerating

Online retail sales will double in the next five years according to a new report by Forrester Research. The full story is here on CNET. There have been a number of recent reports and articles that have highlighted the tremendous growth of e-business in the B2B sector, but this study focuses specifically on the online retail sector.

The annual average growth rate for online retail sales is expected to be 14 percent per year with total online sales reaching nearly $330 billion by 2010. Some sectors will see even faster growth including: health and beauty products, small appliances and travel.

According to the story, many companies are reengineering their Web sites to not only drive more online sales, but also to drive better in-store traffic and create a well-thought-out total brand experience...whether that experience is virtual or real.

In another recent report, it appears that advertisers are fueling the success of their online and offline sales with large increases in online ad spending. According to the new eMarketer report, online advertising will reach 12.9 billion in 2005. The report projects online advertising to reach $22.3 billion by 2009. The report titled, “Ad Spending Trends: The Internet and Other Media,” highlights how the Internet has become a vital daily resource for consumers and businesspeople alike. Because of this fact, marketers in many categories are turning increasingly to contextual and behavioral marketing via the Web to reach customers and affect their buying decisions. The ultimate goal is to engage the customer in all stages of the buying process. In addition, the feedback data provided with this type of marketing allows for a 360 degree perspective of who buys and why?

The report also states, “Much of the increase is coming at the expense of other, traditional media channels.”

The report also suggests that the challenge for the online marketing sector will be to use the tools of the Internet more creatively to develop compelling online interactions. Thanks to the rapid assimilation of broadband and the development of rich media alternatives for the Web, this challenge should become easier to meet.