US Retail Ups and Downs

Three surveys of US retail spending and trends this week show technology - both as a product and a means of purchase - boosting sales, while high gas prices drag them back, making consumers more cautious and more budget-conscious.

US online retail sales will grow from $172 billion in 2005 to $329 billion in 2010, according to a new forecast by Forrester. The IT analyst says that the 'second decade of eCommerce' will be 'marked by innovations that will make online shopping easier and more engaging'. This is equivalent to a solid 14 percent compound annual growth rate over the next five years.

eCommerce will represent 13 percent of total US retail sales in 2010, according to US eCommerce: 2005 To 2010. Travel remains the largest online retail category, growing from $63 billion in 2005 to $119 billion in 2010, while 'General merchandise' (all retail categories excluding auto, food and beverage, and travel) will top $100 billion for the first time in 2005.

The report says that retailers are investing newfound profits in emerging technologies, such as sophisticated analytics and personalization tools, to enhance user experience, and they 'no longer view the Web as a low-cost sales channel but as a way of improving customer service and retention'.

'Many businesses are looking at their Web sites as a way to drive in-store traffic and increase their engagement with customers' according to VP Carrie A. Johnson. 'This is also creating tension as CEOs demand ROI for expensive Web sites with hard-to-define metrics such as loyalty and brand'.


GfK NOP in its 2005 Roper Youth Report notes a 'rising sense of individualism' among America's teens and tweens, as well as a simultaneous jump in their spending power. The report links the two, saying that the ability to customize items, such as cell phones and iPods 'lets teens and tweens express their sense of self by choosing unique ring tones, ever-expanding cell phone features, and portable music play lists'. Nearly two-thirds (62%) of 8- to 17-year-olds find technology exciting.

Meanwhile teen-and-tween wallets have expanded in the last year. Kids are earning a mean of $29.20 per week, two dollars more than in 2004, with 29% of their money coming straight from parents, and 29% of all their income spent on CDs and video games. They also influence family purchasing decisions: 'Today around 1-in-4 kids are advising their parents about purchasing a DVR and which cell-phone plan is best,' says Cary Silvers, VP of GfK NOP Consumer Trends. 'We've seen this trend increasing in the past year'.

Conducted in two waves, the GfK NOP 2005 Roper Youth Report included 1,000 in-depth, in-person interviews with 8- to 17-year-olds.


High gas prices continue top affect US consumer spending, according to the latest monthly figures from BIGresearch. 80% of respondents said that fluctuating gas prices were having an impact on their spending, and as a result they are delaying or reducing expenditures on cars, TVs, furniture, groceries, clothing, dining out and vacation/travel. In addition, 77% of those impacted by gas prices say they will be driving less. 47.5% say they plan to decrease overall spending and 40.2% plan on spending less on holiday shopping.

According to Joe Pilotta, VP Research, fuel for cars is being seen as somewhere 'between a need and a want' rather than a hard necessity. 'This has to be managed... In short, when the consumer has to think about gas for the American icon 'family car,' all facets of budget are put into question'.

BIGresearch's syndicated Consumer Intentions and Actions Survey (CIA) talks to more than 7,000 consumers each month.

The above companies are online at www.forrester.com , www.nopworld.com and www.bigresearch.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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