One-Third of Internet Users Have Made Online Purchases

Only 32 percent of Internet users have actually made an online purchase, according to The Internet Commerce Briefing by the Intermarket Group.

Nearly two-thirds (64 percent) of Internet users have used the Internet to research online purchases, but have yet to buy over the Internet, according to the report. The most frequently cited barriers to online shopping include product pricing (cited by 77 percent of individuals), potential return hassles (67 percent), concerns about credit card security (65 percent), and personal privacy issues such as worries about junk email (58 percent). Difficulties in navigating a merchant’s site were cited as a barrier by 35 percent of individuals who have yet to make an online purchase, and 48 percent of those who have purchased something online. One-in-four buyers also complained about the amount of time it took to receive their orders.

Barriers to Online Purchasing
Pricing 77%
Potential return hassles 67%
Credit card concerns 65%
Privacy issues 58%
Navigation difficulty 35%
Time to receive orders 25%
Source: The Intermarket Group

While a sizable gap exists between the number of online shoppers and buyers, Intermarket Group found that the average visitor/buyer conversion rate of 2.7 percent among leading online merchants approximates the conversion rates of their offline direct response competitors.

A majority (61 percent) of these online merchants reported conversion rates of 2 percent or less while 5 percent reported rates in excess of 6 percent.

Among publicly held online merchants, the companies most effective at converting shoppers into buyers during the first quarter of 1999, along with the estimated amount invested to acquire each new customer include: ($20.40), ($27.60), ($29.30), ($32.30), and ($42.00).

According to the report, the low-cost competitors include several online booksellers and auction sites, while companies in the financial services sector generally invested the most to acquire each new customer.

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