Internet Health Offerings Lacking in Consumers Eyes

US consumers are expected to spend $10 billion on health-related products online in 2004, but they are unimpressed by the current online offerings, according to research by Jupiter Communications.

Nearly half (45 percent) of online consumers access the Internet for health information, but they remain skeptical about purchasing health products online. In a survey of more than 1,600 online consumers, Jupiter found that 49 percent of respondents stated they do not buy health products online because they feel it is more convenient to pick up items when doing other shopping. The consumers also expressed concern about difficulties returning items to an online merchant and slow product delivery.

“The health industry has seen a number of changes in the past year, but players have not reached the point where they are offering the features that would secure consumers’ wallet share for health products online,” said Claudine Singer, and analyst with Jupiter’s Health Market Module. “Players in the online health field must develop both online and offline relationships, as necessary, to enable the delivery of comprehensive, seamless convenience across products and services.”

With surge in consumer online health commerce from $200 million in 1999 to $10 billion by 2004, will be fueled by several factors, according to Jupiter Communications: a burgeoning health sector with well-financed players spending marketing dollars feverishly, a growing online population that is more comfortable with shopping online, and the emergence of women as online buyers. The commerce dollars for the online health segment are highly fragmented:

  • Pharmaceutical sales will account for about $4.5 billion of the total $10 billion spent in 2004, representing a dominant 45 percent of online health spending; however, only 2.5 percent of that $4.5 billion will have shifted from the traditional channel, because players will continue to struggle to adequately address reimbursement issues.
  • Nutraceuticals will generate $1.7 billion, or 17 percent of the online health market, in 2004. This represents a channel shift of approximately seven percent in this category, which includes vitamins and other herbal supplements.
  • Sales of personal care and over-the-counter (OTC) products will reach $2.3 billion and $600 million, respectively. Similar to the nutraceuticals segment, a multitude of players will mark the competition for dollars in these categories.

Jupiter’s research also showed that online advertising dollars for the health space will grow from the $100 million in 1999 to a still-modest $700 million by 2004. Online health will only represent five percent of overall online ad dollars, a figure too low to significantly impact the multitude of existing content players. According to Jupiter, this suggests the market cannot sustain the current glut of players in the healthcare segment and a shakeout looms. It also implies that despite the impressively high margins advertising affords, content players cannot live by ad dollars alone and that convergence with commerce, and ultimately, connectivity players is thus inevitable.

Consumers have also expressed concern about healthcare-related content on the Web. A survey of consumers in Michigan found that only 29 percent of those surfing the Internet have a high level of trust in the health information they find online. More than half (59 percent) indicated they have only a fair amount of trust in what they find, according to the survey, which was conducted by MEDSTAT Group.

One-third of consumers surveyed used the Internet for health information in the last 12 months, according to the survey. Of most interest to these users is disease-specific data, with 82 percent indicating they used the Internet to gather such information. General and preventive health information was also popular, with 63 percent of users searching the Internet for it. The survey also found that consumers’ trust of the health information they find on the Net is greatest when it’s sponsored by a recognized organization or healthcare leader, such as the National Cancer Institute. Seventy-one percent of households said they have a high level of trust in information presented with such sponsorship. In contrast, information sponsored by a pharmaceutical company is viewed skeptically by consumers, with only 20 percent indicating a high level of trust in such data. The MEDSTAT survey found the respondents trust friends and family above all else for information about doctors and hospitals.

Internet users are also wary of the information they share online relating to their personal health care, according to a survey by Cyber Dialogue and the Institute for the Future, sponsored by the California HealthCare Foundation (CHCF) and the Internet Healthcare Coalition (IHC).

According to the survey of 1,000 US online adults, 75 percent of the respondents seeking healthcare information on the Internet are “concerned” or “very concerned” about the sites with which they’ve registered, sharing their personal information with a third party without their permission. Despite this, the survey found consumers are willing to share a range of personal information if it is used to enhance their online experience and is not subject to unwarranted or undisclosed sharing or abuse.

The survey also found that consumer confidence in a site is boosted if it is recommended by a user’s doctor; has a privacy policy that states information will not be shared; gives users the opportunity to see who has access to their profile; and allows users to make choices about use of their information. The factors with the biggest negative influence on users are if a site shares information with advertisers or marketing partners; automatically collects information about the users; and if the site is sponsored by an insurance or pharmaceutical company.

Related reading

pokemon go