Not too many years ago most people shopped in their local stores complete with parking and weather problems, long lines, and wobbly shopping carts. Even when online shopping was available, people felt uncomfortable using their credit cards and giving their personal information to cyber-shops. That has all changed.
Throughout the world online buying has grown exponentially. The money Australians spend online is projected to increase by about $10 billion within the next five years. Consumers may still be concerned about the security of online shopping, but more and more of them are prepared to buy on the web. Faster delivery, easier return policies, and many sites offering free shipping have also increased the desirability of online buying. IBIS World research forecasts an 8.6% per year increase in online revenues over the next five years.
Growth of online shopping has been characterized by strong consumer demands and the increasing number and type of goods available. An 11% annual increase in parcel volume is likely to continue according to Australia's Postal Chief Executive. Physical stores are moving at least part of their companies online in order to cut costs.
In Nigeria and other African countries, a growing generation of young, internet-savvy individuals has embraced new, online technology. The International Telecommunication Union (ITU) has documented an increased internet penetration in sub-Saharan Africa. The numbers of users are still far below the world average of around 30%, but are increasing as Africans become more familiar and proficient with online shopping. E-commerce activities have expanded in Nigeria, South Africa and Kenya both due to the proliferation of mobile phones and availability of faster internet networks.
In South Africa, 51% of individuals with internet access shop online. In Kenya, 18-24% make online purchases. In Nigeria approximately 28% of the population has internet access according to ITU figures. The number of mobile cell phone subscriptions has topped 87 million. A new group of internet developers are eager to increase buying options by providing discounted deals on a wide range of products and services. Analysts indicate that a lack of convenient and reliable electronic payment services for online shoppers is a major problem confronted throughout Africa.
In the U.S., Forrester Research shows that $248.7 billion online sales are expected by 2014. A compounded growth of 10% is forecast for the next five years. In Western Europe sales are expected to reach 14 billion euros ($155.7 billion), a growth of 11% percent annually. Apparel, computers and consumer electronics will continue to be dominant purchases; these three areas make up 40% of the current online sales which won't change in the near future.
Considering that the country is in a major recession, the increase in online buying is a good sign. A survey of U.S. online customers found that 82% are satisfied with buying experiences that began and ended with the online store. Satisfaction dropped to 61% when they researched online and then bought in a store.
Online sales continue to be mostly small-ticket items. The high-ticket products lag far behind by comparison. On average, retailers that have both a physical (store) and online presence have reported an average of 23% growth. Online only retailers (including catalogue sales) however have seen only 9% yearly growth. Online shoppers are beginning to think that the best deals are available online (71%) and that they get better prices there (66%).
The internet is only going to become more popular as time goes by and purchasers worldwide become more comfortable about the security and on-time delivery of their purchases. This is the one area of merchandising that continues to have a positive outlook far into the future.