eMarketer looks at the merchandise that sells well over the internet.
Retail ecommerce sales in the U.S. are projected by eMarketer to grow by an annual average rate of just under 19 percent this year and for the next three years. But what types of goods are selling well online?
Computer hardware/software is on the cusp of becoming the first retail category to derive a majority of its sales online. Last year, internet sales accounted for 48 percent of total computer-related sales, according to Forrester Research. By 2010, Forrester expects that 55 percent of these sales will be made online.
WSL Strategic Retail, a New York-based marketing and consulting firm, took a different tack to measuring the relative significance of online product categories. It surveyed online consumers who bought within various categories in 2003 and 2005 and compared the results. WSL found that the relative significance within online retail of books and music/DVDs has reached a plateau, and for toys/games it has diminished. Consumers are now more likely to buy electronics, office supplies and jewelry/watches on the internet.
By sheer size, the largest online retail sales categories in 2005 were home products, computer hardware/software and apparel, according to Forrester estimates. Home products (a catch-all category for goods such as furniture, home appliances and office supplies) generated $19.1 billion in sales, while computer-related sales (the bulk of which are hardware) produced $13.9 billion. Home products and apparel, in contrast to computer products, generate a small percentage of their total retail sales online, suggesting much growth potential.
Web merchants responding to an Internet Retailer survey in May 2005 also suggested that apparel and accessories will be a growth leader in the U.S. over the next five years. The survey results highlighted drugs/health/beauty as an additional strong-growth category.
Sales volume and growth do not, however, convey the full impact of the online retail channel. Research from comScore on behalf of Google adds to the growing body of evidence documenting the role of online research in driving offline sales.
During the 2005 holiday season, online browsers who followed through with a purchase largely bought offline rather than online. For example, some 43 percent of online apparel shoppers purchased an item directly related to their online query, but of those buyers, just 35 percent completed their purchase online, while the remaining 65 percent purchased offline.
Jeffrey Grau is a senior analyst at at eMarketer. This article is drawn from eMarketer's recent report, US Retail E-Commerce. You can reach eMarketer directly here.