Online Shoppers Remain Wary

Fears that online merchants will not have desirable items in stock or will deliver too late for the holidays will force a majority of online holiday shoppers to spend less than 10 percent of their holiday budget online, according to research by Jupiter Communications, but America Online Internet says shoppers will spend more in 1999.

Jupiter’s research found that many of the 20 million holiday shoppers it expects online in 1999 will favor merchants they bought from in the past. Jupiter polled more than 1,300 US online shoppers in late November and found the majority will act conservatively when it comes to allotting money for online shopping. More than half (51 percent) of the respondents said they would spend less than 10 percent of their total holiday shopping budget online.

“We expect that consumers are going to spend around $6 billion this holiday season, representing significant growth over previous years, but we need to put this in perspective. The amount is still only a small percentage of what they expect to spend over the holiday season,” said Fiona Swerdlow, a senior analyst with Jupiter. “Consumers are risk averse to gambling with the success of their holiday shopping.”

Familiarity with the retailer has everything to do with whether a consumer will buy, Jupiter found. Fifty-one percent of the respondents indicated that site recognition and trust are leading determinants in selecting online merchants to buy from. Thirty-nine percent said they would buy from online merchants whose stores or catalogs they had bought from offline. Of online shoppers, 37 percent said they would buy from online retailers they had bought from in the past.

Established merchants could lose the holiday battle,” said Jupiter analyst Ken Cassar. “Their greatest challenge is living up to expectations that consumers have toward their brands. Nailing the basics, such as site performance, inventory, fulfillment management, and customer service becomes more crucial than ever.”

Jupiter has advised its online merchant clients not to employ the same price-driven tactics of customer acquisition, including discounts, deals, and free offers. New promotional efforts should establish and/or reinforce the credibility of their online brand. Online retailers should focus on guarantees, dependability, and security, Cassar said.

A study by America Online and International Communications Research found that 78 percent of Internet shoppers say they plan to spend the same or more money online this holiday season compared to last year. The study, which focused on consumers who have shopped online in the past six months, also found that 75 percent of Internet shoppers intend to shop online this holiday season, and 42 percent expect to do all of their holiday shopping online.

Convenience remains the No. 1 motivator of online shopping, according to the AOL study. Forty percent of Internet buyers said they would rather shop online than at the mall, and 60 percent report shopping online in their pajamas.

The study also found that 70 percent of e-shoppers shop online exclusively from home, while 22 percent shop from both home and work and 7 percent shop online exclusively from work. Almost half of the respondents have researched products online before buying them at local brick and mortar stores. Nearly 60 percent of Internet shoppers say Internet shopping helps them locate hard-to-find products not available in nearby stores.

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