Online retail sales in the United States are expected to reach $335 billion in 2015 and $512 billion by 2020, according to FTI Consulting's "2014 Holiday Retail Forecast: More Mediocre."
Despite sluggish retail sales in 2014, online sales will grow at a double-digit rate for the next several years. Online's share of retail sales is now around 11 percent, up from 7.4 percent in 2010. The channel also accounts for 15 percent of general merchandise, apparel and accessories, furniture and other sales during the holiday season.
"While we approach the 2014 holiday season with a fair degree of caution, we believe the online channel remains the juggernaut of the season for many retailers," said Steve Coulombe, senior managing director and co-leader of the retail and consumer products practice. "We have slightly increased our forecast for online sales compared to a year ago due to the growing potential of this channel. In this millennial age, mobile devices, and particularly tablets, have in a short time revolutionized consumers' approach to online shopping. While the online channel will give retailers a much needed boost in sales, it leaves minimal opportunities for brick and mortars to match that success."
The report shows the growing influence of January for retailers. Spillover from holiday gift card redemption makes January the strongest month for online shopping relative to total month retail sales.
The holiday retail forecast projects a 3.5 percent increase in nominal holiday sales this season.
Already off to a strong start over Black Friday weekend, about 41.9 percent of a total average shopping budget was spent online, down 10.2 percent from last year. Most shoppers, 46.7 percent, were online on Black Friday; 36.3 percent were online on Saturday and 26.2 percent were online on Thanksgiving Day.
And early expectations were for mobile apps to help fuel both online and in-store sales and, so far, returns from retailers serve to support these predictions. Mobile traffic accounted for 52 percent of all online traffic over Thanksgiving weekend, an increase of 22.4 percent year-over-year, and mobile sales were 32.3 percent of all online sales, an increase of 25.4 percent, according to the IBM Digital Analytics Benchmark report. Apple iOS led the way in mobile shopping this holiday season, outpacing Android in average order value, online traffic and online sales.
-See this FTI Consulting press release
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