US online sales to grow 17% this year

Online spending in the US is expected to rise a robust 17% this year, despite a sluggish economy that has bruised many brick-based retailers, according to an annual survey, quoted by an Associated Press report.

Retail sales online, excluding travel purchases, are set to grow to €130 billion (US$204 billion) in 2008, up from €111 billion (US$174.5 billion) last year, fuelled by sales of clothes, computers and cars, according to a survey conducted by Internet analysis firm Forrester Research for Shop.org, the online arm of the National Retail Federation trade group.

That projection is below the 21% increase seen in the previous year, but industry officials attribute it to the maturing of the business, not the sluggish economy, the report said.

The upbeat report contrasts with the outlook for many traditional retailers, which have been paring down store growth and closing shops as they struggle with consumers who don't feel like spending amid higher gas and food costs, a housing slump and a weaker job market, the report said.

The exceptions are discounters and wholesale clubs, as shoppers turn to cheaper shops.

The study, which surveyed 125 online retailers in February and March, showed that merchants are less interested in using such promotions this year. While 85% of online retailers said they used some shipping incentive in the past year, just 35% said they would focus more on these types of deals in 2008.

Instead, retailers said they plan to invest more in advertising on social networking sites like MySpace.com and Facebook.com, according to the survey.

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