Online retailers poised for further growth

The e-commerce market can expect double-digit gains over the new few years, both in the U.S. and Western Europe, according to reports from Forrester Research.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
3 min read

The online retail trade in both the U.S. and Western Europe is in store for double-digit growth over the next five years, according to Forrester Research.

The U.S. online retail business is likely to grow 10 percent a year compounded annually, reaching $249 billion by 2014, according to the report "US Online Retail Forecast, 2009 To 2014," released Monday. Online firms in Western Europe, meanwhile, are eyeing an 11 percent annual gain over the next five years, hitting 114 billion euros ($155.7 billion) by 2014, according to a second Forrester report out Monday, "Western European Online Retail Forecast, 2009 To 2014."


Last year, as consumers continued to weather a recessionary economy, 154 million people in the U.S. bought items online, about 67 percent of the total number of online users and a 4 percent rise from 2008. Those numbers helped the online retail trade grow 11 percent over the prior year, ringing up $155.2 billion in sales, according to Forrester. A brisk holiday shopping season helped buoy the numbers for the overall year, according to a number of market watchers.

In the U.S., the hottest online retail categories have been and will continue to be clothing (apparel, footwear, and accessories); consumer electronics; and computers (hardware, software, and peripherals). Those three markets already capture around 40 percent of all online retail sales across the country.


Online sales of apparel, footwear, and accessories hit $27 billion alone last year, a 17 percent jump over 2008. Since younger and more tech-savvy buyers are the ones most likely to buy clothes online, Forrester expects this market to outpace that of overall online retail sales over the next few years.

In 2009, consumer electronics also saw growth of 17 percent over the preceding year. This category is particularly suited for online sales since consumers can easily compare products, look for low prices, and read reviews on the Web.

Last year's online sales of computer hardware, software, and peripherals weren't as strong, advancing only 7 percent over 2008 to reach $27 billion, notes Forrester. Since more than 90 million U.S. homes already own a PC, this market will continue to depend heavily on new technologies and devices like Netbooks.

In Western Europe, clothing is also one of the top online trades, but books and event tickets are popular sellers as well. Online growth in the more mature Northern European region will probably lag gains in the Mediterranean countries, says Forrester. But the U.K. will likely remain the largest market, where online sales make up 35 percent of the total Western European segment, currently worth around 40 billion euros ($54.6 billion).

Online shopping in Europe has progressed over the past few years, moving from early adopters to more mainstream users. More than half of online buyers across Europe say they find products on the Web that they can't find elsewhere, according to Forrester.


Consumers have flocked to online stores for a variety of reasons, notes Forrester. Convenience, selection, value, and price are all key drivers. But buyers appreciate the richer and more innovative shopping experiences offered by more Web sites. Retailers have also attracted more customers and boosted sales by maintaining leaner inventories and providing social shopping tools.