Online retail is alive and well, says Forrester

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At its marketing forum, Thriving on the Web and Beyond, Forrester Research looked at the explosion of new interactive channels – wireless devices, interactive TV, and game consoles – and how they will dramatically change consumer behavior.

“Despite the fact that dot com retailers have been dropping like flies all year, online retail is alive and well,” said Evie Black Dykema, senior analyst. “In fact, online devices’ impact on sales is magnifying and rippling through retail – beyond the Net and into the brick-and-mortar world.”

According to Dykema’s Report, Online Retail’s Ripple Effect, PCs will retain the spotlight, generating $246 billion in online sales in 2005. ITV will play a supporting role, and mobile devices will make rare cameo appearances. Though these devices will realise only $23 billion in online sales in 2005, they will influence another $128 billion in offline sales.

Forrester has revised its US forecast for 2000 upward by 16% from $38.6 billion to $44.8 billion. This growth is precipitated by a network effect in which new consumers, retailers, product categories, and technologies increase the value of a market. This year, PC-based sales will total $45 billion, and the PC will influence an additional $13 billion. In 2003, PC-based sales will hit $154 billion, and Internet-enabled devices will influence $146 billion in offline sales. In 2005, PCs and Internet-enabled devices will generate $269 billion in sales and influence another $378 billion – more than half a trillion dollars in all.

Speakers included Mark Bozek, president of Home Shopping Network; and Andrea Reisman, CEO of Petopia.com; Mozelle Thompson of FTC; Mitchell Kertzman, president of Liberate Technologies; Shelly Lazarus, CEO of Ogilvy & Mather; Tom Rogers, chairman of Primedia; Kim LeMasters, chairman of ReplayTV; and Kevin Clark, CEO of ScreamingMedia.

Thriving on the Web and Beyond is the fourth of seven Forrester Forums this year, designed so that senior executives can informally share ideas, discover the latest technology tools and vendors, and develop business strategies.

Forrester Research is an independent Internet research firm which analyzes technology change and its impact on business, consumers, and society.

Forrester

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