This year 139 million individuals, or 78.5% of Internet users ages 14 and older, will shop online in the US, while by 2011, 80% of those users will be online shoppers.

US Online Shoppers, 2006-2011 (millions and % of Internet users)

From 2006 to 2011, the number of new online shoppers will increase at a 3% compound annual growth rate, compared with an 8% rate between 2003 and 2005. Obviously, growth rates for online shoppers are flattening out.

That’s a problem for Internet-only merchants, and an opportunity for multi-channel store retailers.

"The Internet’s impact on retail sales is not limited solely to what is bought online," says Jeffery Grau, eMarketer Senior Analyst and the author of the new report, US Retail E-Commerce: Entering the Multi-Channel Era. "More so than ever, consumers are using the Web as a product research tool, regardless of whether a purchase takes place on a Web site or in a store."

E-commerce analysts agree that Internet-influenced store sales are greater than online sales. And it is also likely that the gap will widen as Internet-influenced sales increase at a faster rate than online sales.

According to Frank About Women, a marketing-to-women communications company, adult Internet users typically visit four or more Web sites in the course of doing product research.

Average Number of Web Sites Visited by US Adult Internet Users While Doing Product Research, by Gender, 2006

On average, men like to visit more Web sites than women.

"Multi-channel retailers who effectively build bridges between their stores and Web sites stand to be the big winners in the research-online/buy-in-store era," says Mr. Grau.

The "Multi-Channel Shopping Transformation Study," from the e-tailing group, in partnership with J.C. Williams Group and Start Sampling, found that catalogs (36%) were the offline channel that drove the most customers to retail Web sites.

Cross-Channel Shopping Behavior of US Online Shoppers, 2006 (% of respondents)

But the most-trod cross-channel shopping path starting online (i.e., from a Web site, e-mail or an online newspaper circular) was browsing a Web site and then buying in a store (37%).

There is plenty of evidence that traditional retailers with Web sites are working hard to level the playing field with their pure-play Internet brethren.

"Big multi-channel retailers like Wal-Mart, Target and Best Buy still trail the likes of Amazon, Netflix and L.L. Bean in customer satisfaction surveys, but they are closing the gap," says Mr. Grau. "In fact, traditional retailers have already proven they can win on price in the large and cutthroat online consumer electronics category."

However, with multi-channel retailing becoming table stakes, retailers can no longer get away with integrating their channels by patching together crude IT solutions.

"To create a truly seamless cross-channel shopping experience, retailers must overcome many difficult technical, marketing and operational issues," says Mr. Grau, "and the cost of undertaking such initiatives is eating into their profits."

Nevertheless, retailers are investing in rich media, instructional Web site content and customer support to help shoppers overcome their resistance to purchasing sofas, refrigerators, treadmills and other durable, high-priced goods.

Via eMarketer

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