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US online retail sales top $100B in 2003

US online retail sales top $100B in 2003

US online retail sales increased a strong 51 per cent in 2003, as vendors on average improved their bottom line, according to a survey conducted by Forrester Research on behalf of Shop.org, the Internet sales division of the National Retail Federation.

It was also the first year in which US online retail sales exceeded $US100 billion, reaching $US114 billion. That represents 5.4 per cent of all retail sales.

There was solid growth across all retail categories, particularly travel, home and office and computer hardware and software, according to the survey, whose results were released this week.

Meanwhile, online retailers collectively raised operating margins to 21 per cent in 2003, up from break-even in 2002, an impressive increase executive director of Shop.org, Scott Silverman, said.

By online retailer, the survey referred to vendors that only sold via the Web and to the online units of vendors that also sold offline, he said. On top of this, 79 per cent of all online retailers were profitable in 2003, up from 70 per cent in 2002.

"The revenue growth was strong in 2003 and the profitability is coming along nicely," Silverman said.

Helped by strong sales in areas such as health and beauty, apparel and flowers and cards and gifts, US online retail sales were expected to grow 27 per cent this year to $144billion, or 6.6 per cent of total retail sales.

These figures, however, don't reflect the impact of the online channel on overall retail sales.

Survey respondents said they believed that 24 per cent of offline sales in 2003 were influenced by the Web, up from 15 per cent in 2002. As such, retailers continue integrating their online and offline channels by, for example, letting buyers return products bought online at a physical store and promoting their offline stores at their Web site and vice-versa.

Forrester surveyed 150 retailers, including those that sell only from Web sites, and those that sell from Web sites and from offline channels, such as stores and catalogues.


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