ChoiceStream

Western Europeans love online shopping—at least more than they did last year, says Forrester Research. They spent 68 billion euros ($92.5 billion) online in 2009, up 12% from 2008. And, Forrester projects the growth trend will continue over the next five years. For the next five years, Forrester predicts online retail sales in Western Europe to grow at a compound annual growth rate of 11% to 155 billion euros ($210.5 billion) by 2014. “As the economy gets better and given the satisfaction with the Internet, it is highly likely that consumers will continue to look to the web for purchasing because of the benefits they find in using this channel,” Forrester says in its report. Read the full article at Internet Retailer

Cart abandonment rate is one the most watched metrics in retail e-commerce, and one that most merchants could stand to improve. But before making changes to their Web sites, retailers need to understand the many factors that lead to cart abandonment – not all of which are inherently evil. Cart abandonment rates average around 70%, but they can vary widely based on industry, product category, and customer base. Some of the most obvious factors driving cart abandonment include inventory availability and unexpected shipping and tax charges. Other, less obvious, factors may also contribute to cart abandonment. To understand and impact cart abandonment, retailers should first research their customer’s “natural” behaviors, and then seek opportunities to influence those behaviors through targeted content and promotions. Even seemingly minor user interface issues can have a significant impact on cart conversion rates, so identifying and correcting these issues should be top priority. Read the full article at Multichannel Merchant

Amazon is discontinuing its affiliate program in Colorado as the state has decided to impose new taxes on large out-of-state retailers like Amazon. Colorado’s move is not unique. Fifteen other states have considered or are considering enacting laws targeting Amazon and other e-commerce companies that typically do not charge sales tax for shipments sent outside their home state. Four states (including Colorado) have already enacted them. “I see this as a trend moving along--a lot of states are considering doing it,” said Joseph Henchman, director of state projects at the non-partisan Tax Foundation. But, Henchman says, the laws “won’t solve short-term budget problems, they signal business-unfriendliness, and they’re probably unconstitutional.” The justification for the laws is a reprise of arguments that state tax collectors have made for at least a decade: they claim that Amazon, Overstock.com, Blue Nile, and other online retailers that don’t collect taxes are unreasonably depriving states of revenue, and that they enjoy an unfair competitive advantage over local retailers that must collect taxes. More to come on this issue. Read the full article at CNET

Matthew Katz of Alix Partners - who heads up the consumer insights division for the analyst firm - was interviewed by MarketWatch on the changing buying habits of the American consumer during these economically challenging times. According to Katz, the recession has led to a fundamental change in consumers’ shopping behavior. For the first time in at least 10 years, consumers are choosing products and price/value over service, experience and time-spent making a purchase in their buying decisions which is increasingly the case as flight to value is defined by Katz as the intersection of price to product. Brand loyalty and store loyalty may be a thing of the past says Katz. Still, Katz does say that retailers with the “ability to connect with their consumers at some point” will ultimately win. To hear the interview, click the link above. Read the full article at MarketWatch

Shopping continues to shift to the Web, but the years of torrid growth are coming to an end. Forrester Research is predicting in a new report that e-commerce in America will grow another 11% this year. Just a few years ago, online shopping was growing at more than 20% per year. But today, that growth is stabilizing, as shopping habits have shifted to make buying online a more regular occurrence for many types of products. “There are still high levels of growth. But we are on a much bigger base now,” says Sucharita Mulpuru, Forrester’s e-commerce analyst. The National Retail Federation predicts 2.5% for U.S. retail overall in 2010. This year, e-commerce is expected to account ofr 7% of all U.S. shopping (excluding autos, travel and prescription drugs). With growth rates slowing for e-commerce, retailers are now focusing more of their online efforts using the Internet and mobile technology to influence sales that happen in stores. Already Forrester’s study found that 42% of all retail purchases in 2009 – worth some $917 billion – were influenced by the Web in some way. By 2014 that figure is likely to jump to 53%. Stay tuned. Read the full article at The Wall Street Journal