Online retail book sales will nearly double over the next five years, according to "U.S. eCommerce Overview: 2003 to 2008," a report recently released by Cambridge, Massachusetts-based Forrester Research. Overall, the study predicted, e-commerce will experience a 19 percent compound annual growth rate (CAGR) over the next five years, from $95.7 billion to just under $230 billion and will account for 10 percent of total U.S. retail sales by 2008.
The study estimates that online book sales will grow from $2.8 billion in 2003 to $5.5 billion in 2008. However, due to greater growth in merchandise and service categories -- such as the food and beverage, home products, and sporting goods industries -- overall online book sales will continue to lose online market share. Currently, books generate 3 percent of all U.S. online sales, compared to 14 percent in 2000. In 2008, online book sales will account for 2.4 percent of online sales.
The study predicts that roughly five million new U.S. households will shop online each of the next five years, creating a total of 63 million U.S. online shopping households in 2008. As the growing percentage of these households move to broadband, they will research more products and shop online more than those customers that use dial-up Internet access. Ultimately, this means experienced online shoppers will continue to diversify their online purchasing, and sales will steadily climb. Furthermore, as retailers invest in site design and usability testing, online shopping will continue to evolve.
"We are seeing considerable growth with products that have taken longer to gain traction with consumers," said Carrie A. Johnson, senior analyst for Forrester Research, in a press statement. "Today, online shoppers are doing more than buying books and securing travel plans."
Online music and video sales will almost triple by 2008, to $8.1 billion from $3 billion, according to the report. Online toy and video games sales will mirror the growth of online book sales, nearly doubling from $2.8 billion to $5.5 billion in the next five years.
If Forrester is correct, online industries such as food and beverages, sporting goods, home products, flowers, and health and beauty products will experience significant growth over the next five years. For instance, the report predicts that the food and beverage category will grow by a 36 percent CAGR over the next five years, to $17.4 billion from $3.7 billion.