***FYI...'Study reveals dramatic shifts in consumers' online buying attitudes'...
<<[July 20th 1999]
Cognitiative, Inc., has released findings from its most recent Pulse of the Customer focus group and e-panel research. The findings reveal dramatic shifts in mainstream consumers' and businesses' buying attitudes, reflecting an increased integration of e-activities in the daily lives of Americans as well as signalling the cannibalisation of sales through traditional channels such as catalogues and retail stores.
Top line findings from this quarter's research:
•Products/services most frequently bought online by consumers: travel (75%), books (69%), computer software (63%), gifts (58%), and music (48%)
•Products/services most frequently bought online by businesses: computer software (71%), books (60%), computer hardware (54%), office supplies (47%), and travel (40%)
•More than 80% of consumers and businesses predict that they will increase the number of Web sites from which they buy over the next six months
E-Commerce Hits Main Street
A notable trend uncovered in the research is the integration of the Web into respondents' normal daily activities. The activities the average e-customer performs on the Web are expanding both in terms of depth and range. As the Web becomes more integrated into the lives of a larger proportion of the population, traditional consumer market segments are emerging in the online environment, such as price sensitive/comparison shoppers, convenience shoppers, and recreational shoppers.
"In the earlier days of the Web, online purchasers tended to be more affluent, more highly educated segments of the population. Recently, however, we are noting a rapid adoption of the Web among mass market consumers," said Laurie Windham, CEO and president of Cognitiative, Inc. "The implications are significant. Market segments distinguished by consumers' behaviour and preferences are emerging in e-business. A 'one-value-proposition-fits-all' Web strategy will not successfully capture the opportunities in the market."
Channel Cannibalisation
Another key trend revealed in the research is the changing behaviours regarding the sales channel from which consumers and businesses buy. Consumers and businesses alike predict that they will be buying more online over the next six months -- to the detriment of other sales channels. The research shows that close to 20% are now buying less from printed catalogues due to their online buying activities. Similarly, 13% report to be buying less from retail stores, and another 13% are buying less from both catalogues and retail stores.
A deeper look at the findings reveals some critical purchase patterns. Catalogue sales appear to be the most vulnerable to cannibalisation from e-commerce sites because the benefits of buying through catalogues and buying online are very closely aligned. In fact, the top reasons why consumers and businesses buy from either of these outlets are: convenience (92% online; 70% catalogues) and costs savings (54% online; 42% catalogues).
Despite the apparent similarity in benefits, there are some distinct differences in benefits of these channels. Respondents perceived catalogues to have better visual presentation of products, due to quality of printing, context provided by the typical catalogues photography, and depth of products that are easily viewed by flipping through a catalogues. Catalogues are seen to provide better product selection as compared to Web sites.
By contrast, due to current bandwidth constraints, Web-based graphics are still slow to load, and "flipping through pages" and viewing a range of products is not as easy as with a printed catalogue - a disadvantage that will disappear, as higher bandwidth is available and embraced by the mass market.
By the same token, Web sites are seen to offer several key advantages over catalogues. There is a perception that products are cheaper when bought through the Web and that product availability information is more up-to-date on the Web than when buying through catalogues. But the primary advantage the Web has over any channel is timesavings -- 83% of respondents report this as a top benefit of doing e-commerce as compared to 49% who consider this a key benefit of catalogue shopping.
According to the Pulse of the Customer research findings, retail stores are also being impacted by e-commerce. Retail storefronts continue to serve a distinct purpose in the lives of respondents, particularly for big-tickets items that require demonstration and service to successfully complete the transaction, as well as for products that require a tactile experience such as some clothing, fragrances and food. But for products that are routine, commodity/staple items, respondents report an increased preference to buying online.
Hybrid Channels
Catalogue and retail enterprises should seriously and quickly offer e-commerce alternatives, as well as continue conducting business through traditional channels. Customers describe the ideal scenario as a hybrid-retailing model -- one where merchants offer customers the option of online, catalogue or storefront shopping. Companies who offer this range of alternatives are predicted by customers to be the retailers who will win and maintain customer loyalty.
"Customers in our research strongly advise top management in their favourite cataloguers and retail stores to get serious about e-commerce," says Windham. "The factors that traditionally determine channel loyalty such as fair prices, convenience, and quality product selection are quickly becoming the key benefits associated with e-commerce. Retailers must make products available via the channels from which customers want to buy. They must also define value propositions for the traditional channels that complement the newly emerging Web based outlets." >>
sellitontheweb.com
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IMO, DELL is on track to become a true e-commerce powerhouse -- consider how effectively it is integrating its online and offline marketing and support efforts. Hmmm.....DELL is so far ahead of the competition that its not even funny <G>.....Of course there's always room for improvement...!!
Best Regards,
Scott |
