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Jupiter Projects Healthy Growth For Online Retail Market

Jupiter Projects Healthy Growth For Online Retail Market

US online retail spending will grow by 28% to $52 billion in 2003 and is on track to surpass $100 billion by 2007, according to forecasts from Jupiter Research.

It is estimated that 156 million Americans used the web during 2002 and 82 million shopped online. Jupiter predicts that the online population will increase by 40% to 219 million in 2007 by which time there will be 142 million internet shoppers.

In 2003, the annual rate of online growth will drop below 10% for the first time, indicating that that the market has “reached an adolescent stage of maturity”. However, online experience is seen as one of the most important drivers of internet shopping growth and by 2007, 72% of the web population will have an online tenure of five or more years, compared to 39% at the moment.

US Internet Market Forecasts 
                 
  2000  2001  2002  2003  2004  2005  2006  2007 
Online Population (million) 125 141 156 171 185 199 210 219
% Of Total Population 44 50 54 59 63 67 70 73
Online Shoppers (million) 49 66 82 97 111 123 134 142
% Of Online Population 39 47 53 57 60 62 64 65
Source: Jupiter Research, January 2003 

Online retail expenditure for last year is estimated at more than $40 billion (excluding automobiles, prescription drugs and travel). This represents a 30% increase on the 2001 figure and is especially significant given the overall slowdown in the US retail sector. Spending will increase at a compound annual growth rate (CAGR) of 21% between now and 2007 by which time the online retail market will be worth $105.2 billion and accoung for 5% of all US retail sales.

US Online Retail Spending Forecasts 
                 
  2000  2001  2002  2003  2004  2005  2006  2007 
Online Retail Sales ($ billion) 24.1 31.0 40.4 51.7 63.9 77.1 91.0 105.2
% Of Total Retail Sales 2 2 2 3 4 4 5 5
Source: Jupiter Research, January 2003 

Jupiter also examined the effect of online research on all purchasing and calculated that internet influenced sales totalled $232 billion in 2002, equivalent to 14% of all retail spending. This is set to grow to $573 billion by 2007 as a result of the increasing internet population, improved online content and greater reliance on the web as a source of product and retailer information.

US Online Influenced Retail Sales Forecasts 
               
  2001  2002  2003  2004  2005  2006  2007 
Online Influenced Retail Sales 185.0 232.0 288.0 352.0 422.0 495.0 573.0
% Of Total Retail Sales 12 14 17 20 23 26 29
Source: Jupiter Research, January 2003 

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