Annual growth rate for web sales to drop to 17.5%, report predicts

The compound annual growth rate for Internet retail sales will drop to 17.5% for the years 2006 through 2011 compared with 24.7% for the years 2003 through 2005, a new report predicts.

Retail e-commerce reached an important point in 2003 when increased spending by existing online buyers replaced new buyers coming onboard as the engine fueling e-commerce sales, according to U.S. Retail E-commerce, a new report from research firm eMarketer Inc.

At the same time, the compound annual growth rate for the number of online shoppers will decrease to 3.2% for the years 2006 through 2011 compared with 7.9% for the years 2003 through 2005, the report forecasts. It goes on to say the growth rate for the number of online buyers for the future period will decrease to 3.5% compared with 11.8% for the past period.

For online retailers to grow today, the report concludes, they must take customers away from competitors, motivate them to spend more and retain their loyalty.