Shop.org just released its ninth annual ecommerce study. It projects $211 billion in ecommerce revenue this year, up from $176 last year.
The forecast $211.4 billion includes travel, a category valued with revenues of $73.4 billion in 2006. The top non-travel categories include computer hardware and software ($16.8 billion); autos and auto parts ($15.9 billion); and apparel, accessories and footwear ($13.8 billion). Cosmetics and fragrances ($800 million) and pet supplies ($500 million) are expected to experience over 30 percent growth in 2006, more than any other categories. Pet supplies is a new category tracked in this year\’s report.
Integration between online and offline activity is key for retailers who report 22 percent of offline sales are influenced by the Web. Retail Web sites are also a viable channel to reach new customers; 38 percent of online customers are first-time buyers.
Speaking of online retail, I just saw an Inc. Magazine profile of the largest internet shoe retailer. It turns out the entrepreneur running Zappos.com, is Tony Hseih, who sold LinkExchange to Microsoft in 1998 for $265 million (I was a huge user of LinkExchange–it was one of our best sources of traffic in the early days of Ancestry.com). Zappos.com had $252 million in online shoe sales last year, and they are obsessive about great customer service.
I love this quote:
We have to untrain employees\’ bad habits from previous call centers, where they\’re trying to be more efficient by minimizing the time they talk to the customer. If someone is looking for a specific shoe and we happen to be out of stock, we have employees direct those people to competitors\’ sites.
Another Inc. Magazine profile describes how Utah entrepreneur Morgan Lynch built Logoworks into a successful online business. Revenue last year was $7.3 million.