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Online research by consumers is not just a convenience they like: It is a major driver of in store sales, and its influence is growing. Offline retail sales influenced by consumers' online browsing and research will increase by a compounded annual growth rate of 12 percent over the next five years, says JupiterResearch.

According to the research and consulting firm's new report, "U.S. Online Retail Forecast, 2006-2011," the healthy growth of offline sales that are influenced by online research will reach 40 percent of total U.S. retail sales by 2011. That represents $1 trillion of total sales in stores.

"Online retail sales are maturing and the lion's share of future growth will primarily come from existing buyers spending more in the online channel," says Patti Freeman Evans, JupiterResearch senior analyst and lead author of the report. "Assuming growth continues in a similar trajectory over the coming decades, U.S. online retail sales will plateau at between 10 and 15 percent of total U.S. retail sales, barring a dramatic change in the online shopping experience that promotes an inordinate spending shift among buyers."

U.S. online retail sales will grow by 16 percent in 2007 to reach $116 billion, according to JupiterResearch. This growth rate is less than the consistent rate of 25 percent during the last few years, according to numerous reports by other firms. Over the next five years, U.S. online retail sales will grow at a compounded annual growth rate of 11 percent, to reach $171 billion in 2011.

Despite the slowing of growth in online buying, web influenced offline sales will grow at a faster pace over the next five years, reinforcing the vast advertising and marketing value retail websites present, the report says. "With market maturation comes opportunity for retailers that can harness the power of the Internet to influence offline sales," says David Schatsky, president of JupiterKagan Inc., JupiterResearch's parent. "The key for retailers is to create clear, simple and convenient links to offline channels that persuade shoppers to stay with them as they cross channels."

Article ID: 140