Retailers shift their ad spending from TV, radio and print ads to digital ads.
Forrester Research, Cambridge, Mass., increased its prediction of online spending this year by $6 billion. Speaking today at the NRF.com conference in San Diego, Mary Modahl, Forrester's vice president of marketing, says that company now expects online sales to reach $45 billion this year, up from its previous prediction of $38 billion. This growth is precipitated by a network effect in which new consumers, retailers, product categories, and technologies increase the value of a market. She also estimates there are now 35 million online shoppers.
"Despite the fact that dot-com retailers have been dropping like flies all year, online retail is alive and well," says Evie Black Dykema, senior analyst at Forrester and author of the report "Online Retail's Ripple Effect." "In fact, online devices' impact on sales is magnifying and rippling through retail -- beyond the Net and into the brick-and-mortar world."
According to Dykema's report, PCs will retain the spotlight, generating $246 billion in online sales in 2005. ITV will play a supporting role, and mobile devices will make rare cameo appearances. Though these non-PC devices will close only $23 billion in online sales in 2005, they will influence another $128 billion in offline sales. This year, PC-based sales will total $45 billion, and the PC will influence an additional $13 billion. In 2003, PC-based sales will hit $154 billion, and Internet-enabled devices will influence $146 billion in offline sales. In 2005, PCs and Internet-enabled devices will generate $269 billion in sales and influence another $378 billion -- more than half a trillion dollars in overall spending.