January 30, 2001, 5:16 PM

Ernst & Young projects a rosy future for online selling

Don Davis

Editor in Chief

Ernst & Young's fourth annual Global Online Retailing Special Report, released this week at the National Retailer Federation's Annual Convention, shows that while many pure-play online retailers weren't treated well by the market in 2000, the web selling channel is alive and wellÑand starting to affect real-world sales. Among the four patterns that Ernst & Young identified as clearly emerging in 2001:
· A multi-channel strategy is a key to success today and a critical driver for the future.
· The same consumer who buys in stores is now buying online. More than two-thirds of 4,400 consumers that Ernst & Young interviewed worldwide have bought online; three-fourths of survey participants in the U.S., U.K. and Germany have bought online. Nearly all participants in the survey (97%) have increased their online spending in the past year. More than half of shoppers in the survey say they visit stores less because they shop online.
· What consumers want to buy online is the same as what they demand in stores, and they expect the same merchandise selection, product quality and brands, and shopping experience across channels. "Online is becoming more like on-land," Stephanie Shern, Ernst & Young global director, retail and consumer products, told the NRF convention today.
· Consumers will continue to push companies to make their online technology work the way the users want it to workÐand it's more than just modem speed. With the emergence of many retailers selling a full range of items across their stores, catalogs and web sites, Ernst & Young predicts that the online channel will be substantial. By 2005, it will represent 10% to 12% of sales in such categories as apparel, accessories, health and beauty, and toys. In some categories, such as books, music, software, videos, and consumer electronics, it could represent as much as 25% of sales.


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