Industry Focus:

A Bright Spot In A Dark Economy: Online Retail

Buffeted by a torrent of economic bad news week after week, month after month, pundits and average citizens alike are straining to find the slightest glimmer of good news — housing sales that don’t decline as much as last month, or a month when job losses fall below the 600,000 mark. Reports of even the most modest profits for financial institutions — though much of those profits are more the result of creative accounting than actual market performance — is enough to send their admittedly dismal stock prices on a major upward spike. As the economic crisis drags on and on, the metrics by which we judge our economy’s health have undergone a major recalibration.

At least one sector, though, continues to be a bright spot of performance and promise, even without adjusting expectations or financial reports: online retailing. While comScore reported that online sales for the 2008 holiday season were down three percent — the first decline since they started tracking e-commerce in 2001ⁱ — overall sales for the year grew 13 percent. Forrester Research is projecting 2009 sales to rise 11 percent, to US $156 billion, growing to 7 percent of overall retail revenue (from 6 percent in 2008)ⁱⁱ; Forrester projects US $229 billion in online sales by 2010ⁱⁱⁱ. Amazon continues to be the darling of Internet retailing, posting a first-quarter revenue increase of 18 percent overall, to US $4.89 billion, with a 21 percent surge in North American sales.