A study of more than 4,000 Web users by Brigham Young University (BYU) found that Internet retailers need to re-target their marketing, address customer fears over credit card security and make the experience less technologically challenging.
The study, which was funded by IBM, identified the shopping behavior of eight online consumer types and discusses which types would respond to marketing efforts designed to increase e-commerce sales. Segmentation studies focusing on the Internet have been very popular with commercial researchers hoping to break the ever-broadening Internet audience into groups marketers can better understand.
"Other segmentation studies have been done by commercial research companies, but they focus on demographics like age, income and location. They scarcely look at the lifestyles or attitudinal characteristics that are the true identifiers for the way people behave," said business management professor William Swinyard, who conducted the study with fellow BYU professor Scott M. Smith.
"In this study we track not only the actual amount of online purchasing people do, we profile individuals using a broad variety of computer literacy and lifestyle variables directed at understanding the psychology of online shopping," Smith said. "We anticipate that somewhere between 65 and 70 percent of all people on the Internet have the potential to become online shoppers, with excess of 40 percent someday shopping regularly."
The study divides shoppers and non-shoppers into eight segments: Shopping Lovers, Adventurous Explorers, Suspicious Learners, Business Users, Fearful Browsers, Shopping Avoiders, Technology Muddlers and Fun Seekers. Of the eight, Fearful Browsers represent the largest untapped opportunity for e-retailers to win online shopping converts, while Technology Muddlers and Fun Seekers should probably be avoided, the study found.
Here's a closer look at each of the eight groups:
The BYU researchers found that the average online household checks or sends email messages 2 to 3 times a week, visits Internet sites for hobbies or to play games once a week and visits auction sites 2 to 3 times a month. About 35 percent of online households buy clothing online, 28 percent buy books and magazines and 23 percent buy music; less than 10 percent buy flowers, tickets or pay for travel.
People like the Internet because it allows them to preview products and get product reviews and recommendations, it provides the convenience of home delivery and removes the hassle of having to drive to go shopping, the study found.
As for dislikes about online shopping, the study found similar complaints to most other e-commerce studies: shipping charges, the difficulty of judging the quality of merchandise, the hassle of returning unwanted items and the possibility of credit card numbers being stolen.
The study, which was also funded by a J.C. Penney Co. Inc. endowment to BYU's Marriott School of Management, consisted of three focus groups, 40 one-on-one interviews that defined themes of Internet usage, a questionnaire administered to 222 college students about their satisfaction and dissatisfaction with the Internet, 4,000 detailed questionnaires mailed to individuals in 50 states and a second nationwide survey emailed to 20,000 Internet users.
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