Growth of Online Shopping

Even during the economic downturn in the market, online shopping continues to increase year over year.  In 2007, consumers spent $175 billion compared to the $144 billion spent in 2006.  This equates to a 21% growth.  Although 2008 doesn’t appear to reflect the same year over year growth, total consumer spending online was $204 billion, or 17% growth.   By 2010, total consumer purchases online is anticipated to reach $270 billion.

Although the dollars continue to increase, the percentage growth year over year is flattening out.  There are several factors, not all inclusive, contributing to a slower growth rates, as follows:

  • Economic recession makes a significant dent in the growth.  Individuals have lost their jobs or are cutting their spending in total, whether online or at retail.
  • The banking industry has placed more restrictions on credit cards in an attempt at managing
  • As more retailers and businesses start selling their product and services online, the market becomes more saturated.  For years, the internet could offer discounts above and beyond the discounts offered at retail.  Thus, consumers would find the specific item at retail and then search the web to find the best price.  With more competition from other merchants for the same product and service, finding the best price is more difficult.  And, if given a choice, shoppers still prefer to shop in store where they can physically touch and feel the specific product.
  • Consumer confidence in providing their credit card information online is still an issue.  The payment card industry is addressing this concern by mandating that processors comply with specific rules and regulations regarding security of data to prevent credit card fraud.  Although PCI compliance will improve security, the consumer ultimately makes the decision.

Regardless of the projected growth rate, online marketing is an outstanding marketing and sales channel, reaching hundreds of millions of users.  Get your business online today.  If you are online, make sure you are optimizing your site and your sales opportunities.

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