New Internet Shoppers Mean Holiday Payoff

Fifty-seven percent of current online shoppers made their first purchase during the past year, with 25 percent of new e-shoppers making their first online purchase during the past few months, according to a study by Taylor Nelson Sofres Intersearch (TNS Intersearch).

The primary reason e-shoppers use the Internet remains convenience, the study found, with 56 percent of shoppers saying it was “more convenient” to buy over the Internet. Cost savings and selection also stimulate some of the most recent online purchases, with 35 percent saying the online product was less expensive than in other places and 22 percent saying they could not find the item elsewhere.

Online shoppers generally prefer the Internet over traditional paper catalog purchases made via telephone or mail. Fifty-three percent of those who have made a purchase by telephone think the Internet is “better” and only 6 percent think it is “worse.” In comparison to mail, 51 percent think the Internet is “better” and a mere 8 percent think the Internet is “worse” than shopping by mail.

“It’s not surprising to see the growing numbers of e-shoppers in the US,” said Brenda McFarland, senior VP of TNS Intersearch. “These days, with the number of e-commerce Web sites available to Internet users, e-shoppers are drawn to the convenience of shopping at home with the option to browse other competing e-tailers for the best offers.”

Although many e-tailers guarantee security policies and provide opt-in services to all consumers, 49 percent of the adults surveyed do not feel secure while making purchases online. This level drops to 17 percent among e-shoppers versus 73 percent of those who have not bought products or services online.

A worldwide study of e-commerce conducted by TNS Interactive found that e-shopping is becoming a significant component in the purchasing of products and services in the US. Not surprisingly, the US is ranked first among online shoppers in the 27 countries surveyed across Europe, Asia-Pacific, and North America.

According to the International study, 27 percent of US Internet users bought goods or services online during the past month compared to the 27-country average online shopping statistic of 10 percent. Across all of the countries surveyed, the average Internet usage (percent of population using Internet in past month) is 27 percent. Usage in the US is 58 percent. Nineteen percent of the US users interviewed plan to shop online within the next six months, and 13 percent of users have bought products or services offline as a direct result of information found online.

Online shopping’s answer to the Super Bowl is, of course, the year-end holiday season. Worldwide online holiday sales are forecast to reach $19.5 billion in 2000, a 85 percent increase over last year’s revenue, according to Gartner Group, Inc. Gartner says 1999 holiday sales totaled $10.5 billion.

“Explosive Internet growth over the last two years, particularly in regions beyond North America, means that many Internet users are now familiar enough with the medium to make online purchases,” said Astrid Van Dorst, senior analyst for Gartner’s e-Business Services. “We’ve witnessed strong demand for Western goods by the affluent in Asia and support by governments, retail banks, card companies, and national portals to ‘Webify’ their countries.”

North America will continue to account for more than half of online holiday sales in 2000, but other regions are beginning to catch up. Europe and Asia/Pacific are projected to grow 96 and 91 percent, while Japan and the rest of the world will increase more than 180 percent.

According to Gartner, both e-tailers and users learned their lessons last year when many consumers made their first online purchase, and many online stores were not ready for the large number of shoppers.

“In an effort to avoid stock outage, and long delivery times, consumers are likely to shop earlier as they shop more in 2000,” said Robert Labatt, principal analyst for Gartner’s e-Business Services. “Retailers have learned their lesson, too: They have spent the year implementing real-time inventory systems and are motivating consumers to shop earlier in an effort to deliver the best shopping experience possible to consumers and their children.”


Worldwide Internet Retailing Forecast
(Q4 2000, billions of US dollars)
Region Q4 2000 Q4 1999 Growth
Revenue Market
Share

(%)
Revenue Market
Share

(%)
North America 10.72 54.9 6.31 59.9 69.9
Europe 5.38 27.5 2.74 26.0 96.4
Asia/Pacific 1.60 8.2 0.84 8.0 90.5
Japan 1.31 6.7 0.46 4.4 184.8
Rest of World 0.52 2.7 0.18 1.7 188.9
Total 19.53 100.0 10.53 100.0 85.5
Source: Gartner Group

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