E-Commerce Shows No Lasting Effect from Terror Attack

The events of Sept. 11 have not had a long-lasting negative effect on online shopping, nor have they prompted people to turn to the Internet as an alternative to public shopping places.

A special supplementary edition of the Yahoo/ACNielsen Internet Confidence Index, designed to measure confidence levels in the Internet following the Sept. 11 attack, found that even the Northeast, the region hardest hit by the tragedy, saw a 34-point increase since the previous survey, which was fielded just before Sept. 11. Overall, the Index jumped nine points in the six-week period between the early September edition and the special October edition of the study.

The Index also found more Internet users nationwide plan to shop online during the fourth quarter (60 percent vs. 54 percent) and will spend $1 billion more on holiday related spending ($12.4 billion) than previously projected. Even with security issues dominating news headlines, 84 percent of Internet users firmly reject the notion that they intend to shop online due to concerns about shopping in large public places.

“The trend of growing confidence in the Internet and in e-commerce is clearly being driven by the convenience, speed and information capabilities of the Internet, and not by fears of terrorist attacks,” said Travyn Rhall, managing director of ACNielsen International Research. “This is a key distinction to be made for online retailers who are reexamining their marketing strategies post Sept. 11.”

Yahoo and ACNielsen usually field their Index quarterly to gauge consumer sentiments and planned behavior. ACNielsen conducts research for the Index through computer-aided telephone interviewing with random digit dialing and utilizes a sample size audience of 1,000 adults, who may or may not be currently utilizing the Internet.

Other findings from the special edition of the Index include projected total online spending of $17.5 billion for the fourth quarter of 2001, an increase of 9 percent over the $16 billion forecasted in the early September Internet Confidence Index. Northeasterners, in particular, will contribute to this rise in spending, as 65 percent now intend to shop online, compared with 45 percent in the early September findings.

Heavy Internet users (those who access the Internet at least once a day) drove the increase in the latest Index, with an 18-point surge since the previous study. This group also showed a significant increase in intent to purchase products online during the fourth quarter of 2001. Light users (those who access the Internet less than once a day) showed a three-point increase over the early September study. In the previous Index light users were responsible for the rise in confidence.

If there is any connection between the Sept. 11 attack and the increased interest in e-commerce it may be that increased Internet use for news and information in the wake of the attack forced Internet users to become more comfortable with the Internet. September’s events also propelled consumers to make online donations, potentially allowing Internet users to become more comfortable with disclosing their credit card and personal information.

“A lot of these people were people who for the first time put their credit cards online,” said Rob Solomon, vice president and general manager of Yahoo Shopping.

In addition to the credit card barrier, shaky online customer service from holiday seasons past has also kept consumers off the Internet or left a bad taste in the mouth of people who shopped online in previous years. According to Solomon, however, the survey found consumers don’t expect such problems, in part because they trust the well-known, traditionally offline brands that are now dominating e-commerce.

Another indication of a healthy online holiday season is the return of online sales, which came to a screeching halt on Sept. 12, to pre-attack levels. According to data from comScore Networks, online sales of Hard Goods have returned to levels seen prior to Sept. 11, though online dollar sales of Travel Services remain 17 percent below pre-attack levels.

During the week ending Sunday, Oct. 21, total domestic e-commerce sales totaled approximately $929 million, or 7 percent below the average week observed during a benchmark period calculated over the five months preceding Sept. 1l, 2001. This is entirely attributable to the continued softness in purchasing of Travel Services, according to comScore.

During the first four weeks following the attacks, comScore data also showed a sharp contrast in consumer purchasing in “essential” versus “discretionary” product categories. Although essential product categories such as Apparel and Health & Beauty Care suffered a drop of 27 percent during the week of the attacks, their sales quickly rebounded to levels even higher than those seen before Sept. 11. By contrast, while sales of discretionary categories such as Consumer Electronics, Books and Event Tickets declined a comparable 24 percent during the week of the attacks, these categories have returned to normal sales levels only in the most recent week.

ComScore’s statistics are based on the online activity of a representative cross section of more than 1.5 million Internet users, who have given comScore permission to confidentially monitor their browsing and buying behavior.