E-retail spending will grow 21% annually through 2007, Jupiter predicts

Online retail soared in last year’s last quarter, and it just keeps going. Jupiter Research Inc. says that when the numbers are in, the online retail sector will have grown 30% in 2002 over the previous year. Driven by an increasing online population, growth in spending per buyer, and in the percentage of online users who shop the web, retail sales online will grow by an average rate of 21% per year between 2002 and 2007, when the web will account for 5% of all retail sales, Jupiter predicts.

Online spending will reach a projected $52 billion in 2003, a gain of 28% over 2002, and reach a whopping $105 billion by 2007. More significantly, by 2007 the Internet will influence 34% of all U.S. retail spending, notes Jupiter analyst Ken Cassar. That creates a clear mandate for manufacturers and retailers to view the web as a critical marketing medium as well as a transactional channel, Cassar says.

“Online-influenced sales touch six times as many sales as are actually transacted online,” says Cassar. “About one-third of this influence is substantial.” That includes instances where the Internet affects the choice of brand or, rarely, creates demand for a product where demand had not existed previously.