March 5, 2009, 12:00 AM

eMarketer projects online retail sales to fall in 2009 and rebound in 2010

Analyst Jeffrey Grau predicts today that online retail sales will decline by 0.4% this year, then rebound next year and register double-digit growth rates from 2011 to 2013.

Katie Evans

Managing Editor, International Research

Research firm eMarketer predicted today that online retail sales will contract slightly this year, then rebound in 2010 and resume double-digit percentage growth from 2011 to 2013.

The forecast by senior analyst Jeffrey Grau calls for a 0.4% reduction in online purchases this year from $133.6 billion to $133.1 billion. He says that continues the decline that began in the last quarter of 2008 when online retail sales declined 4.9% according to the U.S. Department of Commerce.

“It doesn’t look like things are going to get better for a while, in fact they’re going to get worse,” Grau says. “We don’t see e-commerce improving until at least next year.”

Grau predicts online sales will grow by 9.8% in 2010, 13.3% in 2011, 11.4% in 2012 and 10.3% in 2013. By 2013, he projects e-commerce sales will total $203.5 billion. “E-commerce is a fundamentally strong channel,” Grau says. “We’re just in an extraordinary economic situation now.”

The growth in future years will come from consumers shifting discretionary spending to the web and from pent-up demand, especially from affluent consumers, Grau says. The percentage growth rate will begin to decline in 2012, he says, “due to the inevitable maturation of the e-commerce sales channel, as growth in new online buyers approaches saturation.”

Grau’s forecast for 2009 is far more pessimistic than that of research and consulting firm Forrester Research Inc., which last month projected an 11% growth in online sales this year. Forrester’s prediction is “way over-optimistic,” says Gian Fulgoni, chairman of comScore Inc., which measures web traffic. He expects online sales growth this year will be between zero and 5%.

Vikram Sehgal, the Forrester analyst who authored its e-commerce projection says it is representative of the overall growth last year, which included growth in the first half and a third quarter in which online sales were flat to increasing. "That growth more than compensates for the lackluster holiday season," Sehgal says.


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