As online shopping becomes more mainstream, the face of the online consumers, the ways they use the Web to shop, and the products consumers buy online change on a monthly basis. About the only thing you can be sure of is that once you think you understand the online retail landscape, it changes.
Eleven million more US consumers will take the e-commerce plunge in 2000, pushing online retail spending beyond $38 billion, according to a report by Forrester Research. The result of this impressive growth is an online retail world where buyer profiles and product categories are vastly different from one year ago, and somewhat different from just a few months ago. It used to be you could spot an online shopper a mile away. Not anymore.
“When we started surveying online consumers three years ago, Web buyers were a homogenous group consisting of affluent males who used the Net to purchase software,” said Christopher Kelley, associate analyst at Forrester. “As new Web shoppers — who increasingly resemble the offline population — become more comfortable shopping online, their Net spending habits will mirror those currently seen with experienced Web shoppers.”
According to Forrester, two factors will promote the growth of the online retail market in the next year. First, Web buyers are confidently shopping across new product categories, with the most money being spent on researched products, including travel, computer hardware, and consumer electronics. Second, although the core of online shoppers are generally male, younger, and more affluent than the online population as a whole, the new Web buyer is more likely to be female, younger, and less affluent than more experienced online shoppers — for the first time, more than half of new buyers are female.
As for those who don’t buy, the fear of releasing credit card information remains the single most significant factor for online consumers who don’t buy on the Net. Nearly half of online consumers in the US and Canada have caught the e-commerce bug, but 52 percent of online households do not shop online due to fear of stolen credit card information and the distribution of personal information.
Another sign that online consumers are becoming more mainstream comes from the publications they read.
“Online shoppers are no longer just techies who sit around reading Wired all day long,” Kelley said. “Instead, the top three magazines they subscribe to include Reader’s Digest, TV Guide, and Better Homes and Gardens.”
Forrester also found that while consumers embrace new shopping options, they expect a stream of innovations, reasonable prices, and promotions to keep coming. Experienced Web buyers embrace online auctions, drawn in by the fun of bidding and the possibility of acquiring a great deal. Ninety-four percent of online shoppers are also concerned with unreasonable shipping prices, with 44 percent having abandoned an online shopping cart due to shipping costs.
Online consumers have opened their inboxes to marketing, with 95 percent of Web buyers receiving offers or promotions via email, according to Forrester. Online coupon and promotion companies lead the email marketing race, filling the greatest number of inboxes of online shoppers and nonbuyers alike. Although consumers receive marketers’ email, a full 32 percent of email targets delete most marketing messages before even reading them.
A survey done by Yankelovich Partners for Productopia found that 93 percent of online consumers have researched products online, and 85 percent have purchased a product online. According to the study, consumers say it is very important to find information across a broad range of product categories at a single site. For consumers who are searching for product information online, 88 percent say that it is somewhat to very important to have all the information available from a single source. Among users who have researched online for product information, 86 percent are somewhat to very likely to purchase that product online.
But the Web is also changing the way consumers shop offline. In 2005, US online consumers will spend in excess of $632 billion in offline channels as a direct result of research that they conduct on the Web, according to Jupiter Communications. That amount dwarfs the $199 billion that consumers will spend on the Internet. Web-impacted spending, which includes both online purchases and Web-influenced offline purchases, will exceed $235 billion this year and reach more than $831 billion in 2005. Consumers who are online represent a large and growing portion of US consumer spending: all told, US online users will account for 75 percent of all expected US retail spending (both online and offline) in 2005, up from 43 percent in 1999.
The NRF/Forrester Online Retail Index, done in conjunction with Greenfield Online and the National Retail Federation found online sales patterns for the month of April 2000 following a pattern similar to what would be expected by traditional offline sales, further proof that online shopping is being used by mainstream consumers for mainstream products. The arrival of spring saw increases in online sales among sporting goods, tools, gardening products, apparel, and footwear sales.
“The same cold weather in April that contributed to the soft retail sales as reported by the US Department of Commerce may have helped fuel the increase in online sales, as consumers opted to avoid the weather outside and shop from the comfort of their own homes,” said David Cooperstein, research director at Forrester. “Consumers are also cleaning out their closets and replacing last year’s spring and summer fashions by shopping online. Our data shows that spending on apparel and footwear grew from $175 million in March to $223 million in April.”
According to the index, total spending in April reached more than $3.2 billion, which is an increase of $281 million over March, with the average spent per customer growing from $252 in March to $256 in April.
|April/March 200 NRF/Forrester Online Retail Index|
|Health and Beauty||$112,117||$122,206||0.92|
|Tools and Garden||$44,454||$28,735||1.54|
|Number of Shoppers||12,865||11,959||1.08|
|Average Spent per Consumer||$256.18||$252.04||1.02|
About the index:
The NRF/Forrester Online Retail Index measures, on a monthly basis, the growth and seasonality of online shopping based on data collected from online shoppers. The Index is based on 5,000 responses to an online panel fielded by Greenfield Online during the first 10 business days of each month. The monthly panel is weighted to Forrester Research’s Benchmark Panel, which surveyed nearly 90,000 US and Canadian members of a consumer mail panel developed by NPD Group. Data was weighed to represent the North American population demographically.
Nurcin Erdogan Loeffler, head of strategy and innovation, Vizeum China, outlines the seven ways businesses can future proof their digital strategies.
Chief marketing officers have shared their views on technology, innovation and how they see their roles transforming into the near future at an ... read more
Every brand would love to see its hashtag trending on social media, but what if it’s for the least expected reason? Should you ... read more
Businesses near ‘PokeStops’ are enjoying a huge surge in footfall due to the popularity of Pokémon Go, according to our first major ... read more