Frost & Sullivan: Global online revenues to hit $4.3 trillion by 2025

London -- Global online retail revenues will reach $4.3 trillion in 2025, accounting for nearly 20% of total retail, according to a new report from Frost & Sullivan. In leading markets such as the United States and the United Kingdom, nearly 25% of retail will be online, the study said.



"The proliferation of connected devices and the availability of faster internet speeds have catalyzed a change in shopping behavior and fuelled market expansion," said Frost & Sullivan Visionary Innovation Research Group Analyst Archana Vidyasekar. "Innovative business-to-consumer logistic models and the growing influence of social media, along with the convenience of online product research, comparison shopping and competitive pricing, have helped convert many online browsers to online shoppers."



The fast pace of urbanization is further transforming brick-and-mortar retailing from big-box to small-box formats. By 2020, retailer store sizes will shrink by 15-20%, according to the report. Other new retailing modes like interactive stores, click-and-collect, social commerce and virtual stores are imminent as retailers look to extend customer touch points.



The virtual store, in particular, is an excellent example of a bricks and clicks model that has effectively leveraged emerging technologies like augmented reality. Retail giants such as Tesco have found success with virtual stores in countries like South Korea where smartphone penetration is extremely high. The company's online sales increased by 130% within months of the launch of its virtual store home shopping app, which is also the most downloaded app in Korea.