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Report: Online sales to reach $508 billion by 2020

West Palm Beach, Fla. -- U.S. online retail sales will reach $508 billion by 2020, representing a market share of nearly 14% (or 17%, if food retailing is excluded), compared to expected online sales of $260 billion in 2013. According to a new report from FTI Consulting, this represents a compound annual growth rate (CAGR) of nearly 11% from 2012 through 2020.

FTI Consulting raised its previous online sales forecast by approximately 10% to reflect stronger than anticipated online sales beginning in late 2012. FTI Consulting attributes much of the amplified pace of online sales to the proliferation of tablet computers, which have facilitated online commerce for millions of users.

FTI Consulting analyzed the portion of adjusted General Merchandise, Apparel and Accessories, Furniture and Other Sales ("GAFO") sales that were attributable to the non-store channel, including both online and catalog/call center sales, during the past two decades. The online channel's increasing influence on holiday shopping began in 2009, when the percentage of GAFO category sales attributable to the non-store channel began to accelerate during the holiday season relative to the rest of the year. This trend has continued unabated for the last three holiday seasons, with year-over-year sales growth in the online channel averaging 17% during the last three holiday seasons.

"The influence of the online channel has increasingly become a central component of the holiday shopping season, and our upward revisions reflect the fact that online sales in 2013 have exceeded our previous expectations," said Steve Coulombe, senior managing director in the corporate finance/restructuring segment and the firm's retail & consumer products practice. "Tablet-enabled mobile commerce is indisputably responsible for much of this growth. The tablet has been groundbreaking for the retail industry as we know it, knocking down barriers in mobile transacting that the smartphone couldn't."