Online Shoppers Lured by Low Costs, Free Shipping

Online shoppers still want guaranteed security and easy-to-use sites, but keeping costs down, especially with free shipping, is among the most effective means of enticing Internet users to return to shopping sites, according to research by Cyber Dialogue.

According to the survey of intensive Internet users, the leading categories that users found very important in prompting return visits were guaranteed transaction security (85 percent), price discounts (79 percent), free shipping (76 percent), ease of finding items (69 percent), and a prominently posted delivery and shipping costs policy (67 percent). At the other end of the spectrum, users found the availability of other shoppers’ opinions (14 percent), the ability to personalize information and receive updates (23 percent), and one-click shopping (30 percent) among the least important.

Overall, free shipping impacted the decision of 90 percent of online adults who made holiday gift purchases in 1999. Even the lure of brand names wilt when compared to the promise of free shipping, with more than 63 percent of online users indicating they would prefer to shop at a site offering free shipping over one with well-known brands.

“A clear majority of online shoppers are most interested in simple, easy-to-understand characteristics like low prices and free shipping,” said Qaalfa Dibeehi, a senior analyst at Cyber Dialogue. “Currently, consumers appear to understand cyber-shopping in something similar to catalog shopping terms. This is not to discount the importance of online-specific innovations, however, but the popularity of free shipping and low prices can’t be underestimated when building a site that understands its online visitors.”

What does this mean for online marketing tools such as email updates and personalization? A study done in April of 1999 in the UK by Fletcher Research found that Internet users who personalize and configure Web pages are more likely to make online purchases than those who do not. Fletcher found that 68 percent of Web users who had personalized a site made a purchase online, compared to the 28 percent that had not used personalization features.

Another study done in April of 1999 by Cognitiative Inc. found that sales-oriented email is disliked so much that one-third of the consumers surveyed avoid the vendors that send it. Only telemarketing rated as more intrusive than email as marketing measures go.

Cyber Dialogue’s study also examined the past and future behavior of online shoppers. More than 73 percent of the survey’s respondents indicating they planned on increasing their online purchasing during 2000, indicating increased importance of driving return visitors to shopping sites.

Other Cyber Dialogue findings include:

  • Women expected to spend on average $271 during the holiday season, but actually spent an average of $468
  • Men expected to spend an average of $381 during the holiday season, but actually spent an average of only $206
  • 60 percent of online users who made a holiday order contacted customer service via email, compared to 36 percent by phone and 17 percent through live online service

Cyber Dialogue’s findings are from the firm’s January 2000 Omnibus, an in-depth survey of more than 1,000 adults drawn from Cyber Dialogue’s database of intensive online consumers.

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