Study Shows Retailers Believe Online Shopping More Resilient

Study Shows Retailers Believe Online Shopping More Resilient
September 25, 2008

According to The State of Retailing Online 2008, the 11th annual Shop.org (a division of the National Retail Federation) study conducted by Forrester Research Inc., 72 percent of online retailers believe that the online channel is better suited to withstand an economic slowdown than offline channels. "Internet retailers have good reason for optimism as budget-focused shoppers head to the Web for value and convenience," said Scott Silverman, executive director of Shop.org. "Online retailers are well-positioned to make the best of a potentially lean holiday season." About one-third (35 percent) of online retailers surveyed said they expect their online business to perform better than expected in the next 12 months, while another third (33 percent) anticipate their online business will perform the same as expected. This optimistic outlook is driven primarily by past results. According to the report, 81 percent of online retailers surveyed reported that their e-commerce business was profitable in 2007, and 75 percent were also more profitable last year than in 2006. Almost half (49 percent) of online retailers said that their average conversion rate in 2007 was higher than in 2006, and that 36 percent of total sales for the online retailers were driven by repeat customers--higher than in 2006. However, due to their outlook for the U.S. economy, 37 percent of survey respondents noted that they've lowered their expectations for their online business performance in the next 12 months.