Nielsen//Netratings Sets the Sites for the 1999 E-Commerce Holiday Season
Analysts Offer Advice On How to Help E-Tailers Turn Surfers Into Spenders This Holiday Season
NEW YORK--(BUSINESS WIRE)--Oct. 18, 1999--With more than half (55%) of Internet users surfing e-commerce sites, how will e-tailers gear up and capitalize on the all-important holiday season?
According to Nielsen//NetRatings (NYSE:NMR), convenience, quality, personalization and branding are keys to successful business on the Internet.
''Internet sites that will score big with holiday shoppers this year are those with well-known brands, and that offer speed, quality and value,'' says Allen Weiner, vice president of analytical services at NetRatings. ''One of the consistent Internet marketing findings is that online buyers aren't driven by price. Convenience and value rule.''
According to the Nielsen//NetRatings e-commerce research, timing is critical for the online shopper. ''Even though the Internet has the potential to help consumers take advantage of 'the best deal in town','' says Weiner, ''the fact is that most Internet-shoppers do not take the time to comparison-shop online before they buy.''
One good example of this is the number of Internet shoppers who purchased an airline ticket from one of the top travel sites: delta-air.com, previewtravel.com, priceline.com, southwest.com, travelocity.com and travelscape.com. Of all of these shoppers, only five percent went to another travel site to compare prices before buying.
''This online airline ticket example really demonstrates an online shopping trend that is occurring all over the Internet,'' says Weiner.
''Since pricing may not be a significant consideration for online shoppers, the successful e-commerce sites will be the ones who develop the 'out-of-the box' strategies that turn surfers into spenders,'' says Weiner. ''That's why it is critical that e-tailers use their core technology to give customers a personalized shopping experience.''
For example, collaborative filtering is a technology that offers recommendations based on similarities in user preference compared to other users. Online marketers with personalized sites, such as CDNow, enjoy a markedly higher rate of converting shoppers into buyers than non-personalized sites like Beyond.com.
Says Weiner, ''Filtering technology is one reason sites like Amazon and Drugstore.com had purchase conversion rates of 8.3% and 7.9% in August whereas sites like Reel.com and J. Crew lagged with conversion rates of 3.5% and 3.4%.'' (Recall #reply-11629639)
So one might ask, does brand matter on the Internet? ''Brand is definitely an important factor,'' says Weiner. ''Our research indicates that the consumer will go to the branded site they know best. Although the prevailing theory used to be that Internet consumers were fickle, basing purchasing decisions on price, the emerging consensus is that brand recognition plays a key role in the success of e-commerce.''
Of the top e-commerce sites in August, some are brick and mortar companies, such as Barnesandnoble.com, Microsoft.com or Ticketmaster.com, while others are strictly online companies, like eBay.com, eGreetings.com or Amazon.com. The one thing they all have in common is a strong brand. In fact, all of the top five e-commerce sites in August were strong, national brands.
Many online companies are seeking offline marketing tactics to promote their brands on the Internet. This is evident as radio, television and print media are all enjoying increased boosts in advertising thanks to dot.coms eager to raise awareness, build traffic to the site and establish a strong online brand.
For example, online companies spent $72.6 million on television ads in June 1999, a $67 million jump from June 1998, and almost $19.5 million on radio ads, more than a $8.6 million increase from 1998.
With over 1.6 million more shoppers visiting e-commerce sites in August, the Nielsen//NetRatings e-commerce crystal ball indicates that e-commerce will continue to grow as the holidays get closer. ''While raw traffic isn't the only indicator of success,'' says Weiner, ''this holiday looks to be promising for e-commerce sites.''
''Both established and up-and-coming e-tailers have an enormous opportunity to tap into the strong base of existing e-commerce users,'' according to Weiner. ''The key will be for these sites to focus less on pricing, and more on personalizing and branding their e-commerce products and services.''
About Nielsen//NetRatings
Nielsen//NetRatings, the audience measurement service from Nielsen Media Research and NetRatings, Inc., collects data from more than 33,000 panelists as they surf the Internet at home. The Nielsen//NetRatings panel is the largest media research sample of at-home Internet users currently being measured in real time. Nielsen//NetRatings uses unique technology capable of measuring both Internet use and advertising to provide the most timely, accurate and comprehensive Internet usage data and advertising information in the industry. For more information, please visit nielsen-netratings.com.
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