E-Commerce Sales Maturing

    May 21, 2007

U.S. online retail is maturing quickly. One indication is that e-commerce sales growth will drop below 20 percent for the first time next year.

With maturing Internet sales, along with the possible slowdown of the U.S. economy, year over year e-commerce sales are expected to be lower. eMarketer estimates online retail sales will grow 21 percent to $131 billion this year. During the next four years, sales will increase at 17 percent compound annual growth rate.

Increased spending by existing online buyers is now the main force behind e-commerce sales growth. This year, 117 million people will make at least one purchase online, with the average buyer spending $1,123.

As e-commerce matures online retailers need to make the most out of the customers they currently have and convert more shoppers into buyers.

"Not long ago, an expanding online e-commerce channel meant all online retailers benefited," says Jeffrey Grau senior analyst and author of the report.

"But for online retailers to grow today, they must take customers away from competitors, motivate them to spend more and try to retain their loyalty."