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Online clothing sales top computer sales in 2006, Forrester finds

Free delivery, updated Web sites woo customers

By Marc L. Songini
May 14, 2007 12:00 PM ET

The online sales market is expected to jump by 18% this year to $259 billion, according to a report released today by Forrester Research Inc.

The report, dubbed "The State of Retailing Online 2007," is the tenth issued by the research firm in cooperation with the National Retail Federation's (NRF) Shop.org network of 600 online retailers.

Excluding travel, Forrester said that online retail sales will total $174.5 billion this year, up from $146.5 billion in 2006. The 2006 total represented 6% of all retail sales during that year, the report said.

"As consumers flood the Web to purchase merchandise and research products, online retail is moving full speed ahead," said report author Sucharita Mulpuru in a statement. "This strong growth is an indicator that online retail is years away from reaching a point of saturation."

The report found that in 2006, American consumers for the first time spent more money online buying clothes than computers. The report projected that online sales of apparel, accessories and footwear category will total $22.1 million in 2007, up from $18.3 billion last year. The 2007 total will represent about 10% of all clothing sales during the year.

The report said that clothing sales are increasing for a variety of reasons, including the fact that more companies are offering free shipping on product returns and exchanges. Retailers have also improved Web sites with rich imaging capabilities that allow customers to virtually manipulate the merchandise, the report added.

Computer hardware and software, the top online category prior to 2006, garnered $17.2 billion in sales last year. The automobile and parts category was the third-largest segment, with online sales of $16.7 billion, while home furnishings followed with $10 billion in online sales.

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