For companies that survive the dot-com shakeout, business-to-consumer Internet sales will grow dramatically over the next few years, according to a report released yesterday.
Internet sales are expected to grow from $25 billion in 1999 to $152 billion in 2002 and reach $233 billion by 2004, according to Internet research firm Giga Information Group, Cambridge, MA.
Still, online sales will be only a fraction of the overall retail picture, accounting for only 3 percent of total consumer spending by 2004, according to Giga.
Most companies operating online today won't see the windfall. The report said most dot-coms will suffer cash problems over the next few years and then fold. But those that do survive will capture $39 billion in revenues in 2002 and $49 billion in 2004, as they cement themselves into the online retail market, Giga said.
“Business-to-consumer Internet sales are still showing robust growth, but with a likely flattening of the growth curve in 2002,” said Andrew Bartels, author of the report.
The report also predicts multichannel retailers — those who sell online, in stores and through catalogs — stand the greatest chance for success.
“Consumer use of the Internet for product research will grow, but the majority of sales will still close in stores where consumers can touch products and take them home immediately,” Bartels said. “This pattern plays to the advantage of click-and-mortar companies that can operate in real-world, telephone and Internet sales channels.”
