Auctions will grab fourth of online sales within five years, says Forrester
Auctions will account for 25% of expected online sales of $195 billion within five years, says Forrester Research, squeezing the online market share of traditional brick-and-mortar retailers. “Auctions are a hit with web shoppers,” says Forrester analyst Carrie Johnson, noting as an example that while Federated Direct cut its expectations for the rest of the year because of declining sales, eBay recently bumped up its year-end target based on strong quarterly sales and year over year growth of 74%. Though better positioned through their existing brands and infrastructure than a number of the now-defunct pure-play web merchants, traditional brick-and-mortar retailers have only 32% of the market online versus the 68% of sales going to auctions, niche players and manufacturers, Forrester says.
In the future, retailers selling high-ticket items with variable supply and demand like consumer electronics online will face the most competition from web auction sites, Johnson says, prompting many to embrace the “if you can’t lick ‘em, join ‘em approach.”
“This will force retailers to overcome their aversion to auctions and start taking bids on their own sites and via eBay,” says Johnson. Some, such as the Sharper Image, already do, while others are expanding web sales onto eBay and other auction sites.
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