Increase Seen in Internet Shopping

The second annual America Online/Roper Starch Cyberstudy, a sample of approximately 1,000 adult Americans who use online or Internet services from home, reveals how and why they use the medium, how it is affecting their lives and society, what prompts their activity online, and their thoughts about its future impact.

The study found that shopping scored the most dramatic climb among Internet activities. Forty-two percent of Internet consumers say they regularly or occasionally make a purchase online, compared to 31 percent in the 1998 study – an increase of one-third. That increase was fueled in part by 54 percent more women – 37 percent compared to 24 percent in 1998 – shopping online this year.

Internet users connected three years or longer engage in more everyday activities online than newcomers (those online one year or less), the study found. These activities include getting information about and buying products, checking local entertainment information, booking travel, communicating with business associates, trading stock, tracking portfolios, and banking online.

The survey also demonstrates that Internet consumers are becoming more mainstream, as more older Americans and people of more moderate incomes and educational backgrounds went online over the past year. Despite this shift, however, online consumers remain more affluent and educated than the population at large. Similar to last year’s study, more women (55 percent) than men (45 percent) this year were new to the Internet. Thirty percent of this year’s new Internet consumers are college graduates, compared to 43 percent of 1998 newcomers, and 23 percent of the population at large. The median household income of newcomers this year is $41,250, compared to a national average of $38,900, and a median among last year’s newcomers of $53,000.

“Out of all online activities, ‘making purchases’ shot up the most this year,” said Bob Pittman, America Online’s President and COO. “One-third more Internet consumers say they are shopping online, with women shoppers increasing by over 50 percent. We are seeing the online population become more like the mass market, with women again coming online faster than men. Overall, the fact that the more time people spend online the more they do bodes well for the future growth of this medium.”

Web Veterans vs. Newcomers
Online 3+ years Newcomers
Hours per
week online
10.5 6.6
Likely to check
stock portfolio
47% 24%
Likely to
bank online
23% 11%
Likely to trade
stock online
21% 6%
Source: AOL/Roper Starch

While online shopping is most popular among more experienced users, it has increased among all online groups, including Internet newcomers. In addition to revealing the rapid growth of e-commerce this year, the study contains evidence that it will continue to grow rapidly in years to come. Thirty-seven percent of all consumers say they will increase the number of purchases they make online in the next few years.

This year’s survey shows that just over half (53 percent) of those who have been online three years or more engaged in online shopping, compared to 28 percent of those who are new to the medium. Similarly, these more experienced users report spending more online, averaging $266 worth of purchases in the three months preceding the survey compared to $109 for online newcomers.

One of the clearest trends identified in the study is that the longer Internet users spend online, the more central the medium becomes to their lives. Those online more than three years report spending an average of 10.5 hours per week online, compared to 6.6 hours for newcomers. And, the more time they spend online, the more they do. Consumers with more than three years experience online are almost twice as likely to check their stock portfolios as newcomers (47 percent vs. 24 percent), more than twice as likely to participate in online banking (23 percent vs. 11 percent), and three times as likely to trade stocks online (21 percent vs. 6 percent).

Internet consumers are interested in a full range of emerging online activities, the study found. Eighty-six percent report that they are very interested or somewhat interested in being able to send and receive pictures from friends and family online. Among younger Internet users, music is the hot new application, with 61 percent of 18-24 year-olds listening to music online. Forty-one percent of Internet consumers are interested in being able to go online using a cellular phone or personal organizer, and 35 percent in being able to go online from public booths or kiosks. Nearly two-thirds of online users (64 percent) would be interested in being able to check their telephone voice mail using their computer.

Among the other activities drawing interest include taking a class online (69 percent), holding video conferences with friends or family members (67 percent), voting or registering to vote online (64 percent), or paying their bills online (55 percent).

The America Online/Roper Starch Youth Cyberstudy examined the attitudes and activities of 9-17 year-olds, and found that 63 percent of youngsters prefer going online to watching television, while 55 percent choose online to talking on the telephone.

Young people (9-17 years old) go online more frequently as they grow older, the study found. On average, 9-11 year-olds go online 2.8 days per week compared to 4.5 days per week for 15-17 year-olds. Communication tops the list of favorite youth activities online – led by writing letters or notes to friends (59 percent) and using instant messages (52 percent). Among younger children, ages 9-11, game playing is the most common activity, with 58 percent of them participating. More than three-quarters (76 percent) of 9-17 year-olds are interested in downloading music.

The study also shows that online kids share their parents’ eagerness to embrace new online technologies. Seventy-eight percent of the 9-17 year-olds surveyed are interested in sending or receiving pictures online, 76 percent in downloading music, 70 percent in having live video conferences with friends, and 63 percent in watching short cartoons or video clips online.

Among the benefits young people see for themselves from the online medium are increased interest in current events (44 percent), and improvements in the quality of their friendships (39 percent), their writing or language skills (36 percent), and their performance as a student (33 percent).

The study was based on a random survey of approximately 1,000 adults (18 years +) and 500 young people (9-17 years old) who subscribe to an Internet/online service at home. Interviews were conducted via telephone in July 1999 and the results of the adult sample have a +/-3 percent margin of error, while the youth sample has a margin of error of +/-4 percent.

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