Online retail industry booms in 2003
1 June 2004
Online sales in the United States leapt by 51 per cent to $114 billion during 2003, a new survey claims.
Data from Forrester Research shows that online sales now represent 5.4 per cent of all retail sales, exceeding all expert predictions. The annual Shop.org study of 150 retailers also found that online travel sales increased last year by 91 per cent to $52.4 billion, home and office sales reached $11.1 billion and computer hardware and software sales were $11 billion for the year.
The report, The State of Retailing Online 7.0, claims that online retailers collectively raised operating margins to 21 per cent during 2003.
Cataloguers were the most profitable online sellers, with operating margins of 28 per cent, up from 22 per cent in 2002, while web-based retailers saw operating margins surge by 15 per cent, compared with margins of negative 16 per cent in 2002.
"Online retailing has arrived as a profit engine with double-digit operating margins," said Elaine Rubin, Shop.org chairman. "Retailers online have found the right balance between selling a product, acquiring and retaining customers, and earning a profit, which is powerful news for consumers and retail investors."
The study also found that 79 per cent of all online retailers were profitable last year, up from 70 per cent in 2002. Shop.org predicts that online sales growth will increase by 27 per cent to $144 billion during 2004 with strong online sales in the health and beauty, apparel and flowers, cards, and gifts sectors. The report forecasts that online sales will reach 6.6 per cent of total retail sales in the US this year.
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