Forrester Research and Shop.org released their new state of the industry report this week. The big news in The State of Retailing Online 2007: last year’s online sales leader was the apparel category. Sales of clothing, accessories and footwear totaled $18.3 billion, up 61% over 2005 — a strong contributor to the 29% overall growth in overall online retail sales last year.

The report predicts continued strong growth; Forrester expects the online channel to account for 10% of all clothing sales in 2007.

That’s a 20% increase over 2006 levels, which seems on the conservative side. The ingredients are here: increased broadband penetration, more online shoppers, greater usage, and higher monetization. The apparel retailers who can provide a shopping experience that’s solidly branded, focused on the customer and showcases the product will be in a position to grow their sales beyond the industry projections.

The report includes more metrics worth note: Based on 170 retailers surveyed, the report includes:

• 3.1% average conversion rate [Catalog retailers reported an average conversion rate of 4.4%]
• 50% shopping cart abandonment rate
• 36% of revenue from repeat customers
• $117 average order value

For more on the report, Internet Retailer has a good recap. And there’s a conversation worth checking out at Retail Wire.