The Online Advertising Playbook: Proven Strategies and Tested Tactics from The Advertising Research Foundation

Retail Sales and E-Commerce

Overall Retail vs. Online Retail Sales Growth

Stores and all retail outlets rang up sales of roughly $3.5 trillion in 2005 (U.S. Census Bureau 2006b). From 2004 to 2006, retail sales grew about 7% year over year.

E-retail revenues command a small fraction of total sales but tell an exciting growth story. These, excluding travel, reached $114 billion in 2005, a 25% climb over 2004. Future prospects show continuing growth. (As we go to press, comScore reports a 25% increase in online sales during the 2006 holiday season over 2005.) After cracking $138 billion in 2006, Forrester Research (2006c) forecasts dollars rising to $171 billion by 2009; these are healthy double-digit rates in the neighborhood of 18% year over year. Increasing revenues but slowing growth signals the switch to the beginning of a maturing and more competitive channel—a point that takes on added importance when we outline the size of the online shopping population.

Consumers Fuel E-Retail Growth and Shop in New Categories

From the early days of online retail, shopper purchases for computers and software, books, toys, and video games drove sales. These early successes, eMarketer (2006i) forecasts, will continue. In fact, eMarketer expects computer hardware and software to capture more than half of the sales online. That’s a major milestone, reflecting consumer acceptance of manufacturers’ direct sales such as Dell, web-only superstores such as Amazon.com, and the online channels run ...