Jupiter Research Reports US Online Retail will Reach $65 Billion in 2004

Jupiter Research has announced it forecasts that U.S. online retail sales will reach $65 billion in 2004, and will continue to grow by a compound annual growth rate of 17% through 2008 to top $117 billion.  Though still a relatively small component of overall U.S. retail sales, 5% by 2008, the influence of online retail goes far beyond the confines of the Web.  Consumers continue to research purchases online before buying in store.  In fact, Jupiter Research’s forecast projects that by 2008, nearly 30% of offline retail purchases will be influenced by research performed online.

These findings were released in Jupiter Research’s new report “Market Forecast: U.S. Retail 2004-2008”.  The online retail growth is fueled by two main factors: new online buyers and increased average spending per buyer.  As Internet usage matures and the online population reaches saturation, the growth in new consumers choosing to buy online will gradually slow and reach a penetration of 67% of all online users by 2008.  However, through 2008, average spending per buyer growth shows steady increases and will be close to $780 per buyer by 2008.  “Consumers will continue to embrace the convenience of shopping online over the next five years,” noted Jupiter Research Analyst Patti Freeman Evans.


Not all retail categories will grow at the same rate.  Jupiter Research’s forecast groups retail categories in three growth modes: Plateau, Steep and Steady.  Categories in the Plateau group will experience compound annual growth rates of below 10% and include early success areas like PC’s, books and software.  Areas of steep growth (above 30% CAGR) are found primarily in the home and personal care categories like home improvement, grocery and over the counter drugs.  The remaining categories comprise half of total online retail sales and include heavy volume players such as apparel and consumer electronics.