The State of Retailing Online 2007, a study conducted by Forrester Research, Inc., forecasts that online sales will soar again this year.

According to report, 2007 online sales (including travel) are expected to rise 18 percent to $259.1 billion. Sales excluding travel will reach $174.5 billion. This strong growth will come off of an impressive performance in 2006. Online sales last year rose 25 percent to $219.9 billion. Excluding travel, online retail sales rose 29 percent to $146.5 billion, representing six percent of total retail sales in 2006.

Apparel has taken over the top spot in terms of online sales volume. Online clothing sales are forecast to hit $22.1 billion in 2007, and 10 percent of all clothing sales are expected to occur online in 2007.

Why such dramatic growth?

“Retailers are doing such a great job online that in some cases it’s easier to find and buy clothing on the web than it is in a store” said Scott Silverman, the executive director of Shop.org. Free shipping policies, more merchants and making the buying process easier are also responsible for the increases.

Computers, autos and auto parts, and home furnishings round up the top 4 online retail sales categories. For more information about the study (and more niche market selection ideas), read the full National Retail Federation press release.