Consumer Spending on the Net
Analyzing consumer spending on the net took a bit of research and I was truly surprised by what I found. While most information claims that consumers are still making the bulk of their purchases off line, 2010 showed a landmark rise in online purchases. Projected numbers claim that 2010 will show 163 Billion US dollars in consumer spending on the net. You might wonder where all of this money is being spent and two industries come out on top.
People are buying clothes on line to the tune of 13 billion dollars per year and comprises 16% of all e-commerce. Approximately 65.9% of all clothing purchases are made on line. This is amazing when I think of how much I hate to try on clothes, but I would never buy clothes that I have not tried on.
The second largest market on line is “Other merchandise” which equates to accessories such as jewelry, watches, purses, and shoes. Other Merchandise commands 12.5 billion in sales, 13.4% of the on line market share, but only 43.2% of total sales, which means that although is is a great market, more people are making these purchases off line.
Computer Hardware and software comes in third, with 11 Billion spent annually on line. While that may sound great, almost 11.8 billion is spent offline, so it’s practically a 1 to 1 ratio.
Consumers spend approximately 8.3 billion dollars per year on Electronics. That’s online purchase, while off line electronics purchases total about 3 billion. That means that 74% of Electronics are purchased on line, so this is obviously a market that should not be ignored.
The smallest markets are toys with 2.7 billion spent annually even though 61% of total toy sales are made on line, and food and alcohol amounting to 2.3 billion with 57% of total food and alcohol purchases made on line. This is not the time to open an on line toy store, or food service.
The other large online market is information. This surprised me because as I’ve said before, any information that can be bought can usually be had for free if you know where to look for it, and have the patience to research it. Still, a whopping 65% of internet users pay for content, whether in the form of newspapers and magazines, or in the form of downloads and e-books. The market share for this information is roughly 4.8% but think about the actual numbers here. 65% of users pay for it. Apparently people like instant results, even if that means they have to pay for information, instead of taking the time to find a free source.
The trick is getting your share of those users. Information purchases are spread between reading content and video content, so the market is actually larger than it appears. In spite of the dollar amounts spent on clothing and other merchandise, the information market should never be ignored if you want to make money from e-commerce.
The average US household pays approximately $118 per year on reading material alone. That’s books, magazines and newspapers combined, which is a pretty dismal number. Remember reading is fundamental! With the billions of people who are spending their money on line world wide, information is a market that will show serious growth in on line sales, as off line book stores and libraries continue to close or downsize.
