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SAN FRANCISCO-Online retail sales will increase 21% in 2006 to $104 billion, according to a new survey conducted by SG Cowen & Co. LLC. The survey, titled “Annual Consumer E-Commerce Survey” was conducted online with 1,000 US consumers in late November.

Nearly half of respondents (46%) expect to increase e-commerce spending in 2006, primarily due to the convenience of online shopping, according to the survey, which was managed by analysts Jim Friedland and David Geisler. Again, 50% of respondents chose convenience as the primary driver for increased online spending, while 24% of respondents chose lower prices. The duo also found that respondents plan to increase spending across all categories in 2006, with the largest increases in books/music/videos and consumer electronics.

Internet sales in the US are projected to grow from $86 billion in 2005 to $184 billion in 2010, according to the survey. Friedland and Geisler estimate that US retail sales online will grow 25% in 2005 compared to 2004. Specifically, consumers expect to increase thenumber of gifts purchased online during the 2005 holiday season to 41% from 36% in 2004. And, when shopping online, price and free shipping are the most important factors for consumers, the survey found.

The survey indicated that traditional retailers such as Wal-Mart and Best Buy, in addition to new online retailers like Overstock.com, are competing aggressively and taking share from market leaders Amazon.com and eBay US.

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