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Online Sales To Top $200B This Year

After hitting the $100 billion mark just three years ago, online sales are expected to rise 20 percent this year to $211.4 billion, according to the 2006 State of Retailing Online, the ninth annual study conducted by Forrester Research, based on online sales of 174 retailers.

Travel represents the largest e-commerce category, with projected sales of $73.4 billion this year, while the computer hardware and software sector is expected to rank second, with $16.8 billion in online sales, accounting for nearly half of all sales for the category.

Consumer electronics is predicted to come in sixth, behind home furnishings, with $9.8 billion in sales, a 23 percent increase over the $8 billion in CE sold online in 2005.

This year, the online channel is expected to account for almost 8 percent of total retail sales, the report indicated.

The report also shows that multichannel retailers are employing a variety of different strategies to increase sales at their brick-and-mortar stores by leveraging their online presence, as customers increasingly use the Internet to compare prices, find gift ideas and research products. To create a true multichannel environment, more than two-thirds of retailers have consistent pricing across channels (79 percent) and almost half (46 percent) allow their customers to buy and redeem gift cards online and in stores. Additionally, a notable number of companies give customers the ability to accrue loyalty program points across channels (33 percent) and offer in-store product information online (26 percent).

“By encouraging different channels to work together, instead of in isolation, everybody wins,” said Scott Silverman, executive director of

Indeed, retailers reported that 22 percent of offline sales are influenced by the Web, while more than one-third (38 percent) of online customers are new to a company’s entire business.

Online Sales By Category