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LOS ANGELES, USA: Online retail sales growth in the United States is
slowing, but sales are still expected to rise 17 percent this year, even as
consumers cut back on overall spending in the sluggish economy, according
to a recent study.

But the Shop.org study conducted byForrester Research also found that
retailers are tightening purse strings and pulling back on free shipping
offers, with only 33 percent of respondents saying they would focus more on
those promotions in 2008.

The projected 17 percent rise in online retail sales, not including travel,
would be the first time such growth fell below 20 percent. Still, growth
comes on top of a larger base, with $204 billion in sales projected for this
year compared with $175 billion last year, when online retail sales rose
nearly 22 percent.

The industry has enjoyed explosive growth -- sales rose 44 percent in 2001,
for example -- as more Americans have gained broadband Internet access
and embraced online shopping. But decelerating growth is expected, as the
Internet reaches a point of saturation and as online retail becomes a bigger
part of the overall retail pie, said Shop.org spokeswoman Ellen Davis.

"As the overall (sales) number gets higher, it will be harder to achieve the
same level of growth," Davis told Reuters, adding that online retail sales will
eventually fall to single-digit growth, even as their share of the total retail
pie increases.

Last year, for example, online retail sales represented just 6 percent of total
U.S. retail sales. In 2008, it is expected to rise slightly to 7 percent.

Apparel is expected to be the largest sales category in 2008, reaping an

expected $26.6 billion, followed by computers, at $23.9 billion, and autos, at
$19.3 billion, the study found.

The expected double-digit growth in online retail sales comes as U.S. brick-
and-mortar retail sales have been falling since early this year. Skittish
consumers have pulled back on spending, concerned about a possible
recession and hurt by high gasoline prices, falling home values, tighter credit
standards and concerns about job security.

"With the U.S. economy struggling, it's interesting to see that online retail is
taking on a larger share of the retail industry," Davis said.

While some consumers are shopping online for the best deals and perhaps to
minimize trips to the mall, more affluent consumers choose the Internet to
find the best selection and for convenience, she said.

But many retailers feeling the pinch are cutting back on free shipping offers,
raising its price threshold, or moving to flat-rate shipping, Davis said,
adding: "Retailers are trying to keep free shipping from costing them a lot of
money, while still providing a service to shoppers."

The study forecast total U.S. online sales growth will slow over the next five
years as the channel matures with fewer first-time users.

Online sales in 2009 are expected to rise 15 percent, followed by 14 percent,

12 percent and 11 percent in 2010, 2011 and 2012, according to the study.

Shop.org is a division of the National Retail Federation.




The total
market size of B2C and C2C E-Commerce industry in India was around Rs.
7080 crores at the end of 2006-07. It rose to Rs. 9210 crores by the end of
2007-08. Within E-Commerce industry, the size of eTailing Market for the
year 2006-07 was computed to be Rs. 850 crores. eTailing contributed
around 12% to the total E-Commerce Market size in the year 2006-07 and in
the year 2007-2008.
The electronic retail growth of Indian market as estimated by Euro-monitor
report stands close to 48% CAGR and in value term it is going to touch INR
27 billion(Rs 2700 crores) by 2010 from INR 4 billion in 2005. The report
also predicts that the contribution of internet retailing to non-store retailing
is likely to be 46% by 2010. (Value of 2008-2009 not available)

Consumers¶ decision-
making process has considerably changed with the introduction of the
Internet as an alternative channel for shopping. The new wave of
consumerism coupled with increasing urbanization and burgeoning middle
class with paradigm shifts in their demographic and psychographic dynamics
have driven consumers frequently to use retail websites to search for
product information and/or make a purchase of products. Since electronic
retailing is becoming an ever increasing channel for shoppers, in my next
article I would examine the factors which encourage or hinder etailing
adoption among the Indian consumers.
Posted by Surjendu at 10:08 PM
Labels: ecommerce, ecommerce in india, etailing in india

e-tailing or e-retailing refers to the selling of retail goods electronically over the Internet.

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e-tailing or e-retailing refers to the selling of retail goods

electronically over the Internet. The term is a short form for "electronic retailing", and
surfaced in the 1990s for being frequently used over the Internet. The term is an inevitable
addition to other similar terms such as e-business, e-mail, and e-commerce. E-tailing
usually refers to the business-to-consumer (B2C) transactions.

E-tailing is gaining ground. In the year 2003, clothing and apparel segment clocked online
revenues to the tune of $ 3.6 billion. Online retailing is classified into three main categories:
1. Click ± The businesses that operate only through the online channel fall into this
category. Prominent examples in this category include: Dell, Amazon.com and e-Bay.

2. Click and Brick ± The businesses that use both the online as well as the offline channel
fall into this category. Common example includes: Barnes and Noble's.

3. Brick and Mortar ± This is the conventional mode of retailing. The businesses that do not
use the latest retailing channels and still rely upon the conventional mode belong to this
category.

e-tailing offers the consumers huge amounts of information in the form of web sites with
useful links to similar sites that allows consumers to compare products by looking at
individual items. The convenience of online shopping is unmatched indeed. Shopping out of
your home or office reduces the stresses of waiting in lines and dealing with irritating sales
people. However, E-tailing causes problems with fit, since the consumer cannot try the
items on. Return policies may also act as turn offs and items can be difficult to return. The
shipping and handling costs may turn the customers away. e-tailing requires technology
savvy customers and this puts a limit on its potential reach. We can see that E-tailing is
emerging as an interesting phenomenon in the retail industry that is on a rise despite the
disadvantages associated with it.
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