Forrester: E-Commerce Reaching Mainstream

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NEW YORK -- New data gathered by Forrester Research reveal that the Web is becoming more mainstream, multichannel and mature for e-commerce transactions.

The Cambridge, MA, market researcher said 65 percent of online households have researched purchases via the Internet to buy offline, and 51 percent have bought online.

"Stability in sales and profitability means that retailers are now talking about growth," Forrester principal analyst Carrie Johnson told a packed room of attendees at the National Retail Federation's 94th Annual Convention & Expo here yesterday.

Buoyed by e-commerce's growing adoption, retailers are responding with multichannel marketing and integration involving tactics, systems, processes and people.

"We're out of the block-and-tackling mode and heading into differentiation and innovation," Johnson said.

Such progress is possible after online retailers moved from a minus 6 percent average operating margin in 2001 to zero in 2002 and 21 percent in 2003, Johnson said. She cited data from Forrester's joint report with NRF's online division, The State of Retailing Online 7.0.

Johnson said e-commerce has gone far beyond the toddler stage, with expectations for a 16 percent compounded annual growth rate for this year.

Forrester calculates e-commerce transactions in 2004, 2005, 2006, 2007, 2008, 2009 and 2010 to reach $145 billion, $168 billion, $198 billion, $228 billion, $258 billion, $288 billion and $316 billion, respectively. The estimates include travel, typically the biggest e-commerce sales driver. By 2010, e-commerce will have a 14 percent compounded annual growth rate over six years.

Forrester's e-commerce numbers are impressive, even without factoring in the travel category. Those estimates for 2004 to 2010 are $92 billion, $105 billion, $124 billion, $143 billion, $162 billion, $180 billion and $197 billion, respectively.

Excluding travel, e-commerce is expected to grow 14 percent in 2005 from last year.

E-commerce adoption is the key to such growth. An estimated 37 million households shop online, according to Forrester data. The median age for shoppers has dropped a year to 43 in 2004 versus 2003. Women overtook men in the online shopping population last year.

Forrester found the household income of those who shopped online last year also fell. More married or partnered consumers bought online. Thirty-nine percent of those who shopped online in 2004 did so via broadband connections versus 22 percent in 2003.

Also, 42 percent of those who shopped online last year had a college degree versus 50 percent in 2003.

"We're breaking into the masses of shoppers instead of just the elite," Johnson said.

For Chart:

Snapshot of Online Shopping

2004, 2003

Age, 43 44

Male, 49 % 50 %

Household income, $65,215 $65,823

Married/Partnered, 67 % 61 %

College degree, 42 % 50 %

Broadband, 39 % 22 %

Online tenure (years), 5.69 4.23

Source: Forrester Research

Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting


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