Three Million New Internet Shoppers for Christmas

Three million new shoppers will make their first online purchase by the 1999 holiday season, according to a survey by NFO Interactive. The survey found that the new shoppers are taking to the Internet because of promises of privacy, discounts, real-time customer support, and the ability to return a product to a brick-and-mortar facility.

The study “Online Retail Monitor: Branding, Segmentation, and Web Sites” shows that the shoppers joining the ranks of online purchasers (as opposed to window shoppers) will push the number of actual online shopping households over 27 million.

“The upcoming holiday shopping season provides an excellent opportunity for online retailers to cultivate their market share,” said Tim Washer, Director of Research for NFO Interactive. “The key will be to win first-time shoppers by ameliorating privacy-related concerns and providing more attractive discounts, and then convert them into site-loyal customers. An easy check-out and fulfillment experience will be critical.”

Nearly 80 percent of Internet window shoppers say deeper price discounts will entice them to purchase online. Privacy assurances, ease of product return, and real-time customer support will also influence online purchasing decisions, the study found.

Drivers of First-Time Internet Purchases
Driver Percent
Deep price discounts 80.0%
Assurance of privacy 66.7%
Returns to brick
and mortar locations
24.6%
Real-time
customer support
11.6%
Gender of First-Time Buyers
Women Men
56% 44%
Ages of First-Time Buyers
Age group Percent
under 30 14.5%
30-39 25.4%
40-49 29.7%
50-59 21.0%
over 60 9.4%
How Consumers Find E-Commerce Sites
Type URL directly 60.0%
Bookmarks 48.1%
Search engines 42.2%
Banner ads 14.0%
Source: NFO Interactive

According to the study, the online shoppers who will buy online for the first time this holiday season are Internet savvy, and while they haven’t purchased online yet, they have typically researched an average of four of five product categories online, including apparel, consumer electronics, computer hardware, and software and music.

The new shoppers are somewhat evenly divided along gender lines (56 percent women and 44 percent men) and are surprisingly diverse in age. Almost 30 percent are in the 40-49 age group, and one-quarter are 30-39. More than half (55 percent) have household incomes over $55,000. The new shoppers enjoy shopping offline, but have spent as much time online as shoppers who have already purchased something via the Net.

The NFO study also reports that 60 percent of online consumers who have already purchased from a Web site arrive at destination retail sites by typing in the URL directly, while 48.1 percent use bookmarks, and 42.2 percent go through search engines. Fully 14 percent of buyers report they were led to site where they made a purchase via banner ad.

“Brick-and-mortar merchants have a great opportunity to use their stores to promote their Web sites and their Web sites to promote their stores,” Washer said. “Our research is clearly confirming the importance of this symbiotic relationship between retailing channels.”

Shoppers that look but don’t buy spend about 8 hours per week on the Internet, compared to 11 hours per week spent by buyers. The buyers also spend at least five more hours per week watching network television. Both the lookers and shoppers spend more than six hours per week listening to the radio.

“Although Internet media claim a larger share of the consumer’s attention span, traditional media and conventional store-based merchandising still have a tremendous impact on the behavior of online shoppers,” Washer said.

Data just released by E-BuyersGuide.com found that online retailers acknowledge the increasing importance of online customer satisfaction are prepared to spend money to improve it. A survey of attendees at the eRetailing 99 conference and members of the Massachusetts E-Commerce Association shows that 80 percent of e-tailers feel they need to improve online customer satisfaction.

Nearly half (49 percent) of those surveyed said they plan to spend significantly more on customer satisfaction research over the next year. Thirty-one percent said they will likely commit more than 5 percent of their market research dollars to have 24×7 access to real-time information on customer satisfaction on their own Web site. Twenty percent of e-tailers responded that they find data collected by a third party most reflective of a consumer’s true experiences and buying plans, and 12 percent already use third parties to collect this data. Forty-seven percent said they conduct their own research on online customer satisfaction through Web site surveys and data mining.

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