Internet shoppers are three times more likely to buy items offline than online when browsing for items on the Internet. The fact that people are shopping online but buying offline has a slew of implications for advertising strategy.
A 3:1 Offline Buying Ratio
The Strategis Group recently polled 302 Internet shoppers about their online purchasing habits. One question asked was, “What percentage of goods and services for which you shop online do you actually purchase over the Internet?” The mean was 15 percent. When shoppers were asked about what percentage they buy at a store or over the phone, the answer was 43 percent.
Complete results of these and related questions were published last week in Internet User Trends: Mid-Year 1999. This ratio is similar to the 3:1 ratio found in the previous Internet User Trends study, although there has been a slight movement in the ratio toward more online purchasing.
More than two-thirds of Internet users shop at offline stores about as often as before, and some even shop more frequently. Hype notwithstanding, stores are still where most commerce happens.
It Depends On The Item
The Strategis Group asked Internet shoppers what they had purchased online and offline as a result of Internet advertising, in a separate poll published in Advertising on the Internet: 1999.
Some 7 percent of offline purchasers had purchased cars offline due to Internet ads. Among online purchasers, however, only one brave soul fessed up to buying his wheels online.
Clothing is more apt to be purchased offline also, perhaps due to the desire to “try it on” and because of long-established habits of buying via catalogs.
Books and software, however, show a different trend, as online shoppers are more likely to close the deal online. Why? Logistics are part of the reason, and perceived risk is another. There is little risk in buying a book online, but paying $20,000 for a car without kicking the tires can cause heartburn.
Who’s going to buy your product? Men are more apt to complete the transaction online, as are people who use the Internet both at home and at work.
A variety of other demographic, behavioral, and psychographic factors also have an impact. There’s no substitute for doing proper market research so you can anticipate the reaction to your ads.
Purchasing behavior is a valid means of segmentation. Thirty-four percent of all online shoppers never buy online. Many are concerned about having their credit card information stolen in cyberspace and others are just uncomfortable with online purchasing.
The bottom line is that unless you want to write off 21 million shoppers, you need to appeal to this segment as well, directing them to your toll-free number or to the nearest store where your goods are available.
The Distribution Chain
You need to remember your place in the distribution chain. If you are advertising the Sears Back-to-School Sale, the key is to get the message out about those 20 percent discounts. Which a banner can easily do, and click-throughs are just icing on the cake. If you’re Buy.com and you can’t get them to your site, then you’re in deep trouble.
Steps to Take
- Don’t panic if your click-through rate is low. Online shopping is more likely to result in offline purchasing than online sales. Besides, the click-through rate is even lower for billboards, print, and television. Perhaps 99 percent of those viewing your ad will not click on it, so the best bet for most companies is to clearly state your value proposition up front and burn your brand image into the viewer’s memory. Tactics such as building curiosity are better suited to companies that depend on the web for sales.
- Do your research. It pays to know in advance the probable impact of your ads offline and online. The nature of the product, segmentation, and your channels of distribution will provide most of the answer to this question.
- Think logistics. Be up front about where and how your product is available. It isn’t too radical to put your 1-800 number next to the value proposition on your banner ad. Giving easy access to the address of the nearest dealer of your products may be a smart way to build sales, too.
Despite the phenomenal growth of the Internet, the bricks-and-mortar stores are usually the place where sales happen or don’t happen. Marketers who play to win should let this current reality inform their marketing decisions.