US Retail is now going e-Tail in a big way, displacing Technology and Telecom this year as the
biggest spender on e-marketing and advertising.
And why not? Forrester Research is predicting online retail sales to reach some $280 billion (a nice round figure) by 2015. That's some $125 billion more than the $176.2 billion posted in 2010, or a projected 60 per cent increase over five years.
Overall retail sales took a nose dive in 2008, bottoming in the 1st quarter of 2010. Then, the industry clawed back to a point earlier this year where sales volume could be pegged at 3 per cent above pre-recession figures.
But somewhere along the way, everyone who bravely took that beating turned around and saw that online retail was growing at double-digit pace despite the economic crisis, more likely, because of it.
Even if the volume of retail e-commerce remains a fraction 4 percent in 2009of US retail sales, industry studies are showing that a fair amount of consumer decision-making has shifted to the Internet.
Forrester said a third of users will do more research online this year to get the best prices, adding that half of all retail sales will be influenced by the Internet in this manner by 2014.
But more Britons, three in five, were found to have researched products online within the last three months. (European Commission, May 2010)
In tough times, there is much window shopping and bargain-hunting. And you just can't not be there, especially if you're a small retailer, when they're searching. According to the US Small Business Administration, small businesses accounted for 52.6 per cent of retail sales in 2003.
This has started a bandwagon drive to go online, as much a new frontier for traditional retailers as the West possibly was to 19th century Americans in search of land to farm and, later, for gold.
Meanwhile, CRR places online retail sales at £44 billion in the UK last year. IMRG CapGemini are expecting this to double in 10 years.
For small retailers and startups, its a chance to compete with the agility and speed afforded by the Internet for market share. In an industry this size, a tiny fraction won fair and square would be more than sufficient.
