U.S. online sale increase by 25% to $219.9 BN in 2006

According to industry reports, Online retail sales in America, including jewellery, rose by 25 per cent to $219.9 billion last year, according to a survey of 170 retailers commissioned by Shop.org, a division of the National Retail Federation (NRF). Excluding travel, online retail sales rose 29 per cent to $146.5 billion, representing 6 per cent of total retail sales in 2006, it added.

Americans last year spent more online on clothing than they did on computers for the first time in history. The report found the apparel, accessories and footwear category reached $18.3 billion in 2006 and is expected to hit $22.1 billion in 2007. This year, 10 per cent of all clothing sales are expected to occur online.

The report suggests that the apparel and accessories category has experienced strong sales because of an influx of new companies, liberal shipping policies such as free shipping on returns and exchanges, and the integration of new technologies onto their sites which lets customers zoom and rotate merchandise or see the item in different colours before buying, it added.

Computer hardware and software, long the frontrunner for non-travel online sales, moved into second place in 2006 at $17.2 billion, followed by sales of autos and auto parts ($16.7 billion) and home furnishings ($10 billion).

According to the report, 2007 online sales (including travel) are expected to rise 18 per cent to $259.1 billion. Sales excluding travel will reach $174.5 billion.

“As consumers flood the web to purchase merchandise and research products, online retail is moving full speed ahead,” said Sucharita Mulpuru, a senior analyst at Forrester Research, which conducted the research, and lead author of the report. “This strong growth is an indicator that online retail is years away from reaching a point of saturation,” she added.

Eighty three per cent of respondents to the survey reported profitability and 78 per cent said they were more profitable than 2005. Profit as a percentage of revenue did not change, the report notes, because revenue and expenses grew as well.