FYI
28 October 1998: While online commerce continues to grow in popularity among the US online population, a study from Jupiter Communications and NFO Interactive shows that those who have yet to make purchases online are still hesitant to initiate transactions, citing price, not payment security, as a primary concern.
The research results showed a significant 35% of the US online population did purchase a product or service in the last year and were very satisfied with their shopping experience. Almost 95% of those "buyers" reported that they plan to shop more online in coming months. However, the remaining 65% of the online population, which Jupiter segments as "browsers" (those that visit commerce sites but did not make a purchase) and "non-shoppers" (those who neither browse nor shop online), were less likely to make an initial purchase soon.
A total of 45% of the browsers and 84% of non-shoppers said they were unlikely to begin buying online in the next year.
The Jupiter/NFO study suggests that one of the main reasons for the reluctance of the nonbuying US population to purchase products or services online is the barrier of price. More than 77% of online browsers and 64% of non-shoppers state that greater discounts online will spark buying behaviour. Indeed, among the browser population, lower prices emerge as the single most important "change driver" to spur purchasing.
"Aggressive pricing on select items will get customers in the door, and is a crucial step to help win the next phase of the customer acquisition battle," said Evan Cohen, group director, Data Research at Jupiter. "Vendors shouldn't slash prices across the board, but strategic discounting will help commerce players to convert non-buyers into online purchasers."
Although lowering prices may help many transact online, it should not be the only outcome that online marketers depend on. Consumers are increasingly relying on online information sources to drive their off-line purchases. In fact, consumers ranked "researching products and services" as the third most popular online activity. In many cases, online consumers have indicated browsing for information about products that have historically not had strong sales success online, including cars (48.7%), housewares (36.2%), clothing (35.9%), and consumer electronics (35.8%).
The Jupiter/NFO study also reported that online user demographics provide a rich environment for potential widespread online shopping. The demographics of the online population are more attractive than the national average in a variety of metrics that are important to retailers. For instance, 43.1% of online US households earn over $60,000 per year, while just 23.6% of total US households earn more than that amount. In fact, 65% of all online households maintain incomes that exceed $100,000.
The Jupiter/NFO study also showed near parity in the number of women online (45%) and a disproportional% of online households with children (41%) compared with the national average for the US (35%)
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