Forrester expects e-commerce in the U.S. will see another string of double-digit gains over the next five years, albeit barely at a 10 percent compound annual growth rate (CAGR). The underlying drivers, however, will be somewhat different than online's earlier days.
One notable change, according to the analyst Sucharita Mulpuru, is that growth won't be fueled by consumers first discovering online shopping. Forrester expects only four million Americans will shop online for the first time in 2013. Rather, growth will largely come from existing online shoppers spending greater amounts due to their "increased comfort with web shopping." The report notes how online shoppers typically start with "low-consideration" products like MP3s and books before building up to buying "high-touch, high-consideration goods" like furniture or appliances.
Many of the other e-commerce growth drivers in the years to come not surprisingly add to the comfort level for these more-practiced online buyers. These include:
Online loyalty programs: With Amazon's Prime program — offering free shipping for a subscription fee — standing out as the prime example, other online rewards programs are expected to arrive or be amplified to provide greater incentives to buy online.
Smartphones/tablets: The rise of portable mobile devices is increasing the amount of time consumers spend online to research, price-match, and buy at many hours of the day. Forrester notes in the report, "It's not just phones that drive retail web traffic; virtually all retailers report that traffic to their sites from tablets spikes during evening prime-time hours, when consumers are in a leisure state of mind. This also suggests incremental web sessions and conversions, because web retail traditionally spikes not in the evening, but during business hours."
Retailers' multi-channel investments: Aggressive cross-channel investments have enhanced online/offline buying synergies. For some stores, goods can be bought online and picked up within hours for free at a nearby store. Stores are being used as warehouses for online inventory to help speed home delivery. Many stores are also pushing "endless-aisle initiatives," whereby store associates "save a sale" by ordering an out-of-stock item for a shopper through a web-enabled POS system. Ms. Mulpuru notes that few have executed multi-channel well, but that's bound to improve.
By 2017, U.S. e-commerce is projected to account for 10 percent of all U.S. retail sales, up from 8 percent in both 2012 and 2013.
Of the three drivers mentioned in the article, which one will be most responsible for driving growth over the next five years?