US Online Retailers Move Into Profit
Fifty-six percent of US retailers reported that their online operations were profitable during 2001, up from 43% in 2000, according to the The State Of Retailing Online 5.0 report, released yesterday by Shop.org.
The survey shows that shoppers spent $51.3 billion online in 2001, up 21.0% from the year before. In 2002, consumer spending online is expected to increase 41% to $72.1 billion.
| US Online Retail Spend | ||
| Spend ($ billion) | YoY Growth (%) | |
| 2000 | 42.4 | – |
| 2001 | 51.3 | 21.0 |
| 2002 | 72.1 | 40.5 |
| Source: TheShop.org, June 2002 | ||
Out of fifteen categories studied, sales in seven, including computer hardware and software, books, music and video, toys and consumer electronics, represented more than 5% of all retail sales for those respective categories, with penetration in some categories as high as 17%, said Shop.org.
“Consumer adoption of the online channel has reached critical mass, and retailers have been able to respond by turning this trend into profits. This is all the more remarkable in a year like 2001, which experienced a weakened economy,” says Elaine Rubin, chairman of Shop.org.
“In 2002, we will see continued growth in profitability,” adds Michael Silverstein, senior vice president and global leader of BCG’s Consumer practice. “[This year] is likely to be the beginning of a profitable era in online retailing. We will see strong top-line growth, especially from store-based and catalogue-based retailers as they take customer relationship management and targeted marketing to the next level of effectiveness.”