E-Commerce Sales in '06 to Jump 20 Percent to $211.4B: Shop.org Study

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Online retail sales this year are projected to grow 20 percent to $211.4 billion when including travel, according to a new study from Forrester Research for Shop.org.

The numbers, published in Shop.org's 2006 State of Retailing Online report, are projected at $138 billion if travel is excluded. The same growth drivers figure this year as in years past.

"I think one of the key factors is the new categories or the more categories that people are shopping," said Scott Silverman, executive director of Shop.org, Washington, DC.

"For 2006, the two fastest growing categories are pet supplies and cosmetics and fragrances," he said. "These aren't the biggest categories, but they're the fastest growing. It illustrates the fact that customers are increasingly comfortable of buying in new categories and especially those you don't normally associate with online retail."

Computer hardware and software, at $16.8 billion, is the largest non-travel category projected this year. Autos and auto parts is next, with $15.9 billion. Apparel and accessories follows with $13.8 billion.

Pet supplies and cosmetics and fragrances are expected to post growth rates of more than 30 percent this year -- more than any other category measured by Forrester.

The study of 174 retailers -- not all of them members of Shop.org or its National Retail Federation parent -- found that retailers increasingly are investing in multichannel integration. However, customer security is a major concern for those surveyed.

That said, e-commerce is set to get more recognition as a major revenue source within multichannel retailers.

"I think on a higher level there's a greater realization of online sales' impact on total retail," Mr. Silverman said. "With over $200 billion in sales, it's a big part of retail. And it continues to grow fast. We're looking at over 20 percent growth in 2006 versus low single digit growth in overall retail."

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