Headline Feeds
The online shopping population in the United States will double from 66 million to 132 million by 2006, according to a new report released by Jupiter Media Metrix (Nasdaq: JMXI).
"It's easy to assume that because online sales growth has begun to decelerate, the online population must be stabilizing. In fact, this is not the case," the report said.
Indeed, e-commerce growth is leveling off -- in 1998, for instance, it took just a year for the size of the online shopping audience to double -- but that does not mean e-commerce will decline.
Jupiter Media Metrix analyst Ken Cassar told the E-Commerce Times that the research firm expects to see US$40 billion in online sales this year, plus an additional $200 billion spent offline as a result of research done on the Web.
Cassar said he expects growth to continue beyond 2006 as well. "Once people have begun to buy online, they don't go back," he said.
Middle-Class Buyers
In four years, the average Web shopper will be older and less affluent than today's younger, wealthier Internet buyers, according to the report. By 2006, the average online shopper will be over age 35, and more than half of new Web buyers from 2002 to 2006 will have an annual income of between $30,000 and $75,000.
"The next generation of online shoppers will be quite a bit different than the consumers who defined the Internet channel in its early years," Cassar said in a statement. "They will be more representative of middle-class America."
The bulk of growth in new online shoppers over the next five years will be among those under 18 and over 50, the report said.
Shoppers aged 35 to 49 will drop from 49 percent to 19 percent of the total e-shopping population, and children and teenagers will make up 20 percent rather than 5 percent of the total. Adults aged 19 to 35, who currently represent 47 percent of new online shoppers, will account for just 19 percent of new shoppers by 2006.
What's Hot...
As online shoppers' average age rises, prescription drugs will become a hot e-commerce commodity, according to the report. Currently, just 16 percent of online shoppers are 50 or older, but Jupiter forecast that this age group -- which is almost twice as likely to purchase prescription drugs online -- will comprise 30 percent of new shoppers by 2006.
Clothes also will become more popular among Web shoppers as women -- who spend more on apparel than men do -- conduct more of their shopping online. Jupiter said it expects the percentage of female e-shoppers -- currently about 54 percent -- to hold steady over the next four years.
Jupiter also expects online purchases of kitchen products, small appliances and large appliances -- all of which are popular with women and older consumers -- to show strong growth over the next five years.
...And What's Not
But according to Cassar, growth in two e-tail categories that experienced very fast growth early on will level off. Online sales of computers and computer accessories, as well as of books, videos and music, are beginning to mature.
"Consumers that are just coming online now are far less curious technologically," Cassar said. "They'll be perfectly happy with the functionality their $500 computer offers."
Changing Values
The coming demographic change also will alter online shoppers' perspective on e-commerce and will change which concerns they have. Jupiter predicted that worries about credit-card security and personal information will decline.
As the average income of online shoppers drops, price will become a more important issue, the report said, and consumers will be more likely to comparison shop.
As e-commerce matures, Web buyers also will expect an
easier returns process, and they will be less likely to buy
when there are shipping and handling costs.
