E-Commerce Continues To Grow

Retail U.S. E-commerce sales rose sharply in the fourth quarter last year, as consumers spent $17.2 billion online, up 25% from the fourth quarter of 2002, the Commerce Department reported Monday.

E-commerce sales accounted for 1.9% of total retail sales in the fourth quarter, up from 1.6% in the year-ago quarter. For all of 2003, online sales were $55 billion, up 26% from 2002.

While still small in absolute numbers, retail E-commerce sales are becoming a barometer of economic health as retailers seek to boost their brands and revenue by promoting their online distribution channels. Last year was something of a breakout year for E-commerce, as big names like J.C. Penney, Best Buy, Sears, and Lands' End expanded the amount and types of merchandise in their online catalogs.

As more women take to online shopping, the profile of the typical E-shopper is changing from early adopter to mainstream consumer, Forrester Research analyst Kate Delhagen says. For instance, online sales of apparel, health and beauty, and home-decorating items grew by 54%, 93%, and 40%, respectively, last year--eclipsing the growth rates of online stalwarts such as books, music, videos, software, and hardware. Forrester projects that online sales overall will grow by 25% again this year and will account for an ever-larger percentage of overall sales.