April  2006      Vol. 15, No. 4  REAP HOME PAGE  A publication of the Center for Rural Affairs    
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Trends Indicate Online Sales Will Grow through 2010


E-commerce and E-Retailing sales grew by over 25 percent in 2005, and indications are that growth in retail sales will continue to expand in the double digits each year at least through 2010. (eMarketer and Jupiter Research)

That means there still are great opportunities for small rural businesses to learn how to transform their current business into a combination brick and mortar and online business. By doing so you may increase the potential customer base and take advantage of opportunities nationwide.

Read on to learn from eMarketer and Jupiter Research what some of the trends are with e-commerce businesses.

Instead of worrying about survival due to limited market potential, online retailers today are becoming concerned with maintaining their market share due to the fast market growth. While the offline retailing market is growing in low single digits, online retailing has doubled in size in the last 24 months to become a $144 billion market.

The challenge for online merchants comes from the fact that after this year, the bulk of that growth will come from existing buyers rather than new shoppers. And that means customers are becoming more mature and more demanding when it comes to what they expect from online storefronts.

By 2010, 71 percent of online users will use the Internet to shop compared to 65 percent in 2005. However, the research states that online retailers will find it difficult to find new non-buyers to convert. Online retailers will rely more heavily on existing online shoppers to spend more than they have in previous years. That, of course, suggests that e-commerce operations with inefficient order processing and customer satisfaction could be in for tough times.

An interesting prediction is that over the next five years, offline sales will grow at a faster rate than online sales. Driving this growth are the 85 percent of online shoppers who said they used the Internet to research their offline purchases in 2005. The message to retailers with a physical store and an e-commerce operation is clear: Seize the opportunity and integrate your offerings now.

“The fact that the Internet will influence nearly half of total retail sales in 2010 is a staggering statistic for a shopping channel that will have been around for little more than 15 years by 2010,” said David Schatsky, senior vice president of research at Jupiter Research. “This presents an enormous opportunity for retailers who embrace a well-integrated, multi-channel operational strategy.”

You can see that there are still opportunities for doing business online, and in order to take advantage of this opportunity it will be important to learn as much as possible about trends of your business, what is involved in getting your business online, and how you would market it.

To take advantage of one or more of the University of Nebraska Lincoln Extension eTraining opportunities in the areas of eBusiness, eTailing, eAg, eGov, eBay, and others, visit the http://www.extension.unl.edu/etraining  ebsite or contact an extension educator in your area. An Electronic Retailing class is scheduled for David City on April 12. You may register for this class at http://cariregistration.unl.edu.

Contact: Dennis Kahl, University of Nebraska Lincoln Extension Educator at dkahl@unl.edu.
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