E-Commerce, Mobile Access Drawing Interest from Net Users

As the official ISP of some 25 million subscribers, it’s in America Online’s best interest to see what Internet users do on the Net, think of the Net, and perhaps most importantly, have in store for the Net. For the third year, AOL had Roper Starch conduct its Cyberstudy of Internet users.

This year’s study found that online e-commerce activities have exploded into the mass market, as millions of consumers discover services like shopping, banking, news, stocks, and health information. The study also shows a strong and growing demand for access to the online medium through cell phones, TVs, voice portals, and other non-PC devices.

According to the study, online commerce has become an everyday activity for millions of users. This year, more than half of the survey’s respondents (56 percent) say that they currently shop online, nearly double the percent of those who did in 1998 (31 percent). Similarly, as the holiday season approaches, the percent of users who say they intend to shop online during that period has doubled from 14 percent in 1998 to 28 percent today.

“Two years ago, most online users were only dipping their toes in the electronic commerce pool, but this year, they’re diving right in,” said Marshall Cohen, America Online Senior Vice President of Brand Development. “With a majority of users saying they now shop online and 80 percent saying they research products online before buying something, we’re seeing a true coming-of-age for electronic commerce.”

Internet Use, 1998 vs. 2000
Use 1998 2000
Shop online 31% 56%
Intend to
shop online
in future
14% 28%
Plan to increase
online purchases
41% 49%
Banking 16% 25%
Trading stocks 11% 16%
Source: AOL/Roper Starch Cyberstudy

In addition to shopping more frequently, consumers are also spending more when they shop online, with the percent of respondents who say they spent more than $500 online in the previous 3 months jumping by more than one-third over the past year (from 19 percent in 1999 to 26 percent now). The percent of users who say they plan to increase the number of online purchases they make in the next few years has jumped to 49 percent from 41 percent in 1998, and when the timeframe is expanded, 40 percent of users think they will do “almost all” of their shopping online within 10 years.

In addition to shopping, there has been extremely rapid growth in a wide range of other online activities — from banking (up from 16 percent to 25 percent since 1998) to trading stocks (up from 11 percent to 16 percent since 1998) and booking travel reservations or tickets (up from 32 percent to 49 percent since 1998).

Online research is now a standard part of the buying process with 80 percent of online users saying they research products online before they make a purchase. The majority of users also get news (76 percent), health information (70 percent), and local entertainment info (50 percent).

As users grow accustomed to integrating the online medium in their everyday lives, they are also increasingly demanding access to it from any place, at any time.

More than half of users (54 percent) say they would be interested in using a small Internet device to go online from any room in the house, and just under half (46 percent) say they would be interested in having their email read to them by calling a special phone number. Nearly half of users (43 percent) already log on to their home accounts even when they are away from home, up from 36 percent in 1999. If they own a laptop, more than a third (37 percent) users checks his or her email account when traveling for business, and 32 percent do so when traveling on vacation.

Looking ahead to a much more fully wired world, 60 percent of respondents believe that within 10 years, every room in their house will be wired for Internet access. And showing the potential for wireless devices, 63 percent already also own at least one cell phone.

“As people get used to online services and convenience, they increasingly want to be able to do their favorite online activities regardless of what room of the house or what part of the world they happen to be in,” Cohen said. “That increased consumer reliance on popular online services can be seen in strong and growing demand for Internet-accessible cell phones, PDAs, two-way pagers, small kitchen devices, and TV set top boxes.”

More than half of online users (53 percent) have a computer and TV in the same room of their house, and 60 percent say they currently watch TV and go online at the same time. Additionally, 51 percent say they would be interested in checking their email through their television, and two-thirds of online users (67 percent) would be interested if they could check out a Web site they’d seen on TV without getting up from the TV to find it.

E-mail addresses have become such a pervasive part of an individual’s identity that 75 percent of Internet users expect more people to know their email than their phone number in the future. A full half of online users (50 percent) now say that they prefer to use email instead of the telephone (34 percent) to communicate with business associates.

As people spend more time online, the study found they’re also spending less time doing more traditional media activities. More than a third of users (34 percent) say that they are watching less TV since they started going online, up from 26 percent a year ago.

Finally, online users are unambiguous about their views on privacy, with virtually all of the respondents (94 percent) saying it is “very important” that their privacy and security are protected while online.

America Online commissioned Roper Starch Worldwide to produce a random survey of 1,004 adults (ages 18+) who subscribe to an Internet or online service at home. Interviews were conducted via telephone in August 2000. The results have a +/- 4 percent margin of error.

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