RealTime IT News

The Power of Online in the Off-line World

American online consumers in 2005 will spend an estimated $632 billion in off-line channels as a direct result of research that they conduct on the Web, says a new report.

That figure dwarfs the estimated $199 billion that consumers will spend on the Internet, says the report.

Businesses that doubt the importance of the Internet channel must take a broad view of what constitutes success online and focus on building an integrated Web presence in order to capture or influence transactions generated online, as well as those generated off-line, according to new forecasts from Jupiter Communications Inc.

The new research was unveiled at this year's Jupiter Shopping Forum in Chicago.

Web-impacted spending, which includes both online purchases and Web-influenced off-line purchases, will exceed $235 billion this year and reach more than $831 billion in 2005, Jupiter said.

Consumers who are online represent a large and growing portion of U.S. consumer spending: all told, online users in America will account for 75 percent of all expected U.S. retail spending (both online and off-line) in 2005, up from 43 percent in 1999.

Skeptical retailers eyeing fluctuations in the financial market and the increasing failure rates of Internet companies are often blind to the most important issue-- the degree to which their online efforts will affect their off-line business, said Ken Cassar, a senior analyst with Jupiter.

"Online consumers are a very powerful audience and tend to be channel agnostic," he said. "And as consumers increase their use of the Internet, the opportunity for the Web to influence their online and off-line shopping behavior grows. Simply put, businesses must integrate across channels."

While many businesses see their online and off-line efforts as separate and distinct from their traditional channels, online consumers are far more fluid, choosing to do business with a given company across its multiple channels.

A recent Jupiter/NFO Consumer Survey found that more than 68 percent of online buyers said they researched products online and then purchased them at a physical store; 47 percent of respondents said they then bought via phone.