New products attract e-tail dollars

E-shopping is set to become a $100 billion business in the United States this year.

The holiday season alone is set to log $12.2 billion worth of online sales--an increase of 42 percent over 2002, Forrester Research said in a study released Tuesday.

The market research firm attributed the increase in online sales to higher consumer spending on products such as apparel, home decor and sporting goods, coupled with an overall betterment of the economy. Greater consumer confidence in using credit cards over the Internet is also driving online sales upward, a recent study by Jupiter Research shows.

Sales numbers are already bumping up. The Commerce Department said this week that online retail sales rose by 27 percent in the third quarter of 2003 compared with the same period last year.

Many e-tailers are attracting customers with free shipping, Forrester said. These companies are also trying to boost sales by setting minimum amounts for purchases or by offering incentives to shop online. Sears, Roebuck on Tuesday said that some sale prices set for the Thanksgiving Day weekend will be available a day early for online shoppers, along with free shipping with a mail-in rebate.

"In addition to spending more money, consumers have begun to diversify their online spending habits this year. That's the good news for online retailers," Carrie A. Johnson, senior analyst at Forrester, said in a statement.

"The challenge this holiday season is that as increasing numbers of mainstream consumers move online, online retailers are finding themselves in greater competition with offline stores," Johnson said. "To keep shoppers enticed, online merchants must continue to respond with promotions like free shipping and in-store pickup."