Experienced Internet Shoppers Satisfied with Online Shopping

Even though 88 percent of experienced Web buyers abandoned their online carts at some point during the 1999 holiday season and 40 percent reported various problems, Internet shoppers were generally more satisfied shopping online than anyplace else, according to a study by Andersen Consulting.

Nearly three-quarters (73 percent) of experienced Web buyers ranked Internet shopping the highest in terms of overall satisfaction compared to brick and mortar stores (60 percent) and catalogs (56 percent).

“Even though online shopping has its flaws, experienced Internet users love shopping on the Web. But the long-term message is clear: Internet retailers must solve their infrastructure problems or suffer consequences,” said Steve Johnson, co-director of Andersen Consulting’s eCommerce Program. “Thirty-five percent of online shoppers who experienced problems on a particular site left that site for another, our study revealed. Given high customer-acquisition costs, e-tailers can’t continue to lose one of every three consumers and expect to survive. Their top concern must be infrastructure improvements.”

Home Internet shoppers in general were very pleased with their online shopping experience during the holiday season, according to a study by PC Data and Goldman Sachs. The study found that 97 percent of respondents said they plan to buy online again.

The PC Data study also found that satisfaction with Web retailers’ gift delivery and exchange processes was also high, with 95.6 percent of respondents saying their experience in these areas met, exceeded, or significantly exceeded expectations. Only 3.9 percent said Internet retailers did not meet expectations, and 0.5 percent said they significantly underperformed.

“Immediately after Christmas, we all heard horror stories of undelivered gifts and orders gone astray,” said Cameron Meierhoefer, Internet Analyst for PC Data Online. “But this study strongly suggests these instances were the exception rather than the rule. The bottom line is that a majority of home Internet users had a good experience.”

Of those critical of the online buying experience, 51.6 percent said their items of choice were “sometimes” out of stock. Sixty percent said their items were delivered on time, while an additional 16 percent said the items were delivered “earlier than expected.” Nearly 90 percent of the respondents in the PC Data/Goldman Sachs’ survey said they did not intend to return items, and 68 percent said they did not use Internet customer service.

Three percent of the PC Data/Goldman Sachs respondents said they did not plan on purchasing online again, and they ranked shipping and handling costs as the main reason.

According to a survey by Jupiter Communications, consumers spent $7 billion shopping online this holiday season, and they were satisfied with the experience.

Jupiter’s survey of 810 holiday online shoppers found that 90 percent of online buyers indicated they were largely satisfied with their shopping experience, compared to only 74 percent in 1998. Only four percent of the respondents said they would decrease their online spending in 2000 based on their experience. In addition, 35 percent indicated that it would encourage them to buy more than they had previously anticipated.

According to the American Express Retail Index, the number of consumers who bought gifts on the Internet during the 1999 holiday season nearly tripled from 6 percent in 1998, to 16 percent in 1999.

According to the American Express survey, nearly one in five (19 percent) online shoppers said they purchased at least half of their holiday gifts via the Internet. The most popular items purchased online included toys (35 percent), electronics (34 percent), books/magazines (27 percent), music/movies (17 percent), and clothing (15 percent). To make their purchases, most consumers (81 percent) went directly to a retailers Web site (81 percent) while 27 percent surfed other sites, including those offering price/product comparisons like My-simon.com or shopping portals.

The survey also revealed that nearly all (95 percent) online holiday shoppers said the experience of shopping via the Internet was positive and that 96 percent said they would continue to shop online in the future.

Despite the growth in online shopping, consumers still seek the “brick and mortar” shopping experience, reporting that they made holiday purchases at an average of six different stores. Overall, the most popular place to shop was department stores (60 percent), followed by discount department stores (35 percent), specialty stores, such as clothing (21 percent), toy stores (17 percent), electronics stores (15 percent), and music/video stores (7 percent).

Inventory and delivery problems were atop the list of problems experienced by Internet shoppers during the 1999 holiday season, according to the Andersen Consulting study.


Top 10 Problems Experienced by Internet Shoppers
Problem Percent of
Internet Buyers
Gift wanted to purchase was out of stock 64
Product was not delivered on time 40
Paid too much for delivery 38
Connection or download trouble 36
Didn’t receive confirmation
or status report on purchase
28
Selections were limited 27
Web site difficult to navigate 26
Web site didn’t provide information
needed to make purchase
25
Prices not competitive 22
Site didn’t offer enough gift ideas 16
Source: Andersen Consulting

Almost all (96 percent) of experienced Internet users anticipate they will use the Web to purchase products next holiday season, and 72 percent will use the Internet for day-to-day shopping in 2000, according to the study. The Internet outperformed catalogs and bricks and mortar stores on all key attributes that mattered most to online shoppers: competitive price, obtaining everything from one source, convenience, and time savings.


How Internet Compares to Other Shopping Channels
Internet Catalog Stores
Offers most competitive price 21% 10% 13%
Everything from one source 12% 7% 13%
Convenience 59% 41% 12%
Saves time 62% 33% 3%
Source: Andersen Consulting

Books, the first product category to be sold en masse on the Web, remain at the leading edge of e-commerce. Experienced Web users bought more books online than in stores this holiday season. In fact, according to the survey, books and videotapes were the only categories in which more online shoppers made more online purchases than in stores or via catalogs.


Source of Gift Purchases
Type of Gift Percent purchased via
Internet Catalog Stores
Toys 48 33 57
Books 47 15 34
Music 42 15 34
Videotapes 35 17 30
Clothing 29 41 81
Computer Hardware/
Software
25 10 29
Collectibles/Candies/
Knickknacks
23 26 48
Household items/
Appliances
17 12 34
Consumer Electronics 17 10 25
Cosmetics/Personal Care 16 29
Sporting Goods 14 16
Greeting Cards 13 35
Food/Wine 11 10 17
Gift Certificates 9 6 38
Flowers/Gardening Items 9 5
Pet Gifts 6 21
Periodical Subscriptions 5 4
Jewelry 3 24
Other 13 11 8
Source: Andersen Consulting

When asked which type of product or service feature would increase the likelihood of purchasing more products or services over the Internet in the future, respondents cited free delivery, on-time guarantees, and no sales tax most often.


Features That Will Drive E-Commerce
Feature Percent of
Internet Purchasers
Free product delivery 98%
On-time delivery guarantees 95%
No sales tax 91%
Coupons/promotions 83%
Toll-free customer assistance 68%
Live, online customer assistance 62%
Customers reviews or recommendations 62%
Helpful hints for colors, sizes, etc. 58%
Free gift wrapping 58%
Gift suggestions 46%
Source: Andersen Consulting

Taking respondents from Andersen Consulting’s October 1999 pre-holiday shopping study of 1,492 online shoppers, a total of 541 of these Internet users responded to a follow-up over an eight-day period beginning Dec. 27 through Jan. 3. The survey was administered on the Internet. The data was weighted to the Internet population, and a small number of respondents who did not purchase holiday gifts were eliminated from the sample.

PC Data Online surveyed 4,742 US home-based Internet users who had shopped online in the past two months. The survey was conducted Jan. 4-5, 2000.

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