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Prediction: Consumable Category to Reach $120 Billion in 2005

Online purchases for consumable goods will reach $120 billion by 2005, according to newly released data from an Internet research study.

Collectively, consumables shoppers account for a majority of online purchase transactions (58 percent of items purchased, 56 percent of purchase dollars), according to ActivMedia Research.

The study looked at past year shopping patterns among a number of consumable products purchased repetitively in categories such as Health & Healthcare, Health & Beauty items, Pharmaceuticals, Food & Supplies, Groceries & Household Supplies, Gourmet Foods & Beverages and Pet Supplies.

ActivMedia estimates the total dollar amount spent online in business-to-consumer (B-to-C) retail purchases will grow to over $2 trillion by 2005.

New product categories like consumables are blossoming online as the industry strives to build out capacity for home delivery of items such as groceries, while easily shippable cosmetics, vitamins and pet supplies are essentially a mail-order business built on convenience today.

The majority of people coming online recently are mainstream shoppers, and research findings reveal that they bring mainstream interests with them.

As a result, there is ample reason to anticipate that growth in the consumable category will outpace growth of current Net businesses as capacity becomes available to provide delivery service, the report says.

"Areas within consumables that will certainly mushroom online over the coming 10 years are Groceries and Home Supplies," said Harry Wolhandler, vice president of research at ActivMedia.

"As delivery systems in major metropolitan areas continue to move convenience closer to the customer's door without substantially greater expense, acceptance of home delivery will become widespread."

ActivMedia's "Consumable Products: Building Consumer Loyalty Online" study addresses how to grow online Consumable business, cement consumer loyalty, and develop strategies for success.



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