U.S. Online Retail Set For Double-Digit Growth

Online retail in both the U.S. and Western Europe is set for a strong period of double-digit growth over the next five years, according to new forecasts by Forrester Research.

U.S. online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting 114 billion by 2014.

"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru.

"To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."

Despite consumers' increasing use of the Internet to research products before purchasing, most retailers fall short on offering a consistent cross-channel experience. According to Forrester's data, while 82 percent of U.S. online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.

Highlights from the report include:

*In the US, Web shopping will account for 8 percent of total retail sales by 2014.

*Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.

*By 2014, 53 percent of total retail sales in the US will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.



 

 

24% Of Households Have a TV Connected To The Internet

Nearly a quarter (24%) of all U.S. households have a television connected to the Internet, according to a new report from the Leichtman Research Group (LRG).

The report found consumers connect to the Internet via variety of devices including a video game console, a Blu-Ray player, or a compatible TV.  While Internet connectivity has become a common built-in feature in many devices, consumers are just beginning to use this feature to watch video from the Internet.

Overall, just 1 percent of adults watch video from the Internet via one of these devices daily, and 5 percent weekly. Usage leans heavily towards young men, with 16 percent of men ages 18-34 watching video from the Internet via one of these connected devices weekly, compared to 3 percent weekly use among all others.

"Despite speculation that consumers are 'cutting the cord' to cable, satellite or Telco video services and choosing to watch video exclusively online or through other alternatives, there remains little evidence of this being a trend," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.

"Emerging video services do not necessarily create either/or scenarios in decisions to subscribe to a video service or not. Rather, they create opportunities and trade-offs in how, when, what, and where to consume the increasing video entertainment options."

Among households with a TV connected to the Internet, 20 percent do so via a game console, 8 percent have an Internet connected TV set, and 6 percent have a Blu-Ray player with an Internet connection.

Just 5 percent of those online at home strongly agree that they would be willing to pay $9.95 per month to watch TV shows from a service like Hulu, while 81 percent strongly disagree.

Other findings include:

  *55% of Netflix subscribers report that they used the "Watch Instantly" feature in the past month -- overall, 1% of all adults use Netflix's "Watch Instantly" daily, and 4% weekly

 *Overall, 3% of adults watch a full length TV show online daily, and 11% weekly

*Among all individuals online at home, 4% strongly agree that they would consider disconnecting their TV service to just watch video online -- compared to 3% last year, and 4% two years ago
 

Spam is Getting More Malicious

Symantec has released two new reports for the month of November - the State of Spam, and the State of Phishing (both PDFs). The reports highlight a dramatic increase in spam that contains malware. On top of that, junk and malicious email now accounts for close to 9 out of 10 email messages.

The security firm says that a new generation of "Spam Princes" are rising, and that the Asia Pacific region, Japan, and South America have surpassed North America, with regards to where spam is originating from.

"Rising spam levels originating from South America, Asia Pacific and Japan are not altogether surprising when you consider the massive growth of internet connections in these regions," says Amanda Grady, Principal Analyst, Symantec. "Meanwhile, the increased threats to social networking websites is interesting because it shows spammers are hiding behind the reputation and brand trust built by legitimate companies. Social networking sites that have a large user base will continue to be targets of malicious and phishing emails."

Symantec shares the following findings:

- In October, an average of 1.9% of all spam messages contained malware. This equates to a 0.6% increase from September, when the number of messages containing malware hit a maximum of 4.5% of all spam

- Symantec observed a 17% increase from the previous month in all phishing attacks
 
- 30% of phishing URLs were generated using phishing toolkits; an increase of 24% from the previous month

-  Symantec observed a 45% increase from September in non-English phishing sites
 
- More than 97 Web hosting services were used, which accounted for 8% of all phishing attacks; a decrease of 19% in total Web host URLs when compared to the previous month

Symantec's report of an increase of malware-infected spam is made even more unsettling as news reports surface of computer viruses infecting unknowing victims' machines with child porn.

Have You Read This? 

> Stealth Phishing Attack Looks Like Internal Email

> Symantec Urges Windows Users to Patch Systems

> Beware Holiday Emails

Online Retailers To Have Better Holiday Season

Overall retail sales are expected to show no gain this holiday shopping season, while online retail sales in the U.S. will reach $44.7 billion during the holiday season, an eight percent increase over last year, according to a new report by Forrester Research.

The growth rate represents an increase from 2008, when, on the heels of the global financial crisis, online holiday retail sales in the U.S. grew just five percent. Forrester defines the holiday shopping season as months of November and December.

"Despite the lingering effects of the recession, the online space remains the retail industry's growth engine," said Sucharita Mulpuru, Forrester Research vice president and principal analyst.

Sucharita Mulpuru
"What's different this holiday from past years is that online retailers will manage to the bottom line, which will change some of the tactics they have employed in the past."

The National Retail Federation has forecast a one percent decline in overall U.S. holiday retail sales for this year. A recent Forrester survey of more than 4,000 U.S. online consumers found that 94 percent of those who made a purchase online within the past three months plan to continue to buy online this holiday season. Nearly three- quarters (72%) of retailers surveyed in "The State Of Retailing Online," a Shop.org study done by Forrester in Q3 of this year, say they expect online holiday sales to increase over last year.

According to Forrester, retailers will cut down on automatic free shipping and require price thresholds to qualify for free shipping. In addition, online retailers will use more cross-channel customer service options, advanced merchandizing software that will offer more product information, and improved social networking tools that will allow people to share purchase decisions with friends.

"Tighter offline inventories may benefit the online channel as consumers go to the Web looking for products - and prices - they can't find in stores this holiday," said Mulpuru.

"Online retailers will be ready for them with a special focus this year on engagement and service."
 

Related Articles:

> Online Retailers Seek To Imrpove Checkout Process

> More Holiday Shoppers To Go Online To Save

> Consumer Online Spending To Grow 24%

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