VOL. 111 | NO. 59 | Wednesday, March 26, 1997
Study shows Web shoppers more
than doubled in the past 18 months;
gender gap begins to narrow
By CAMILLE H. GAMBLE
The Daily News
An increase in Web users actively shopping on the Internet is among the key findings of a new demographic survey released this month by CommerceNet and Nielsen Media Research.
Thirty-nine percent of all Web users have searched for product information online prior to making a purchase, compared to 19 percent in the fall í95 study.
The spring í97 release of the CommerceNet/Nielsen Media Demographic and Electronic Commerce Study also reveals continued growth in the number of people in the United States and Canada using the Internet and World Wide Web more than doubling in the past 18 months accompanied by a significant narrowing of the gap between the number of male and female users.
At the same time, the population-projectable survey designed to gauge public acceptance of the Internet, the Web and online services in North America shows a lack of trust in the security of electronic payments as the leading inhibitor preventing people from actually purchasing goods and services online.
But in spite of the roadblocks, the survey indicates that the Internet has moved beyond the question of who will use it to questions about who will buy and sell products and services.
ìOur survey pinpoints a number of challenges and opportunities for businesses as they propel the Internet from a simple communications medium to a viable platform for consumer shopping and purchasing,î said Randall Whiting, president and chief executive officer of CommerceNet. ìWhile the numbers confirm that the Internet has become an established shopping vehicle, clearly changes in technology, product offerings and perceptions are needed before most people will want to buy online.î
Robert Staub, vice president of sales and marketing for Memphis-based LunaWeb, said business owners also are hesitant about offering online ordering as an option on their Web sites.
Staub said LunaWeb has a client in Miami who owns a tool shop. He was hesitant about people ordering online.
ìWe went ahead and put it on there for him at no charge to show him that it would work,î Staub said. ìHe was getting orders that were two and three times what the average order would be.î
This is the same client who now wants to put his entire catalog online, he said.
ìBefore, his customers were buying a drill or a big-ticket item. When we put his whole catalog online, they can order the drill bits or accessories. So instead of a $300 sale, heís got a $400 sale,î Staub said. ìAnd he does not spend the money sending out catalogs.î
Most businesses which now offer online ordering have Web sites with secure and non-secure servers. Staub said many people who order online are choosing the non-secure server, which shows their trust in the system. He said it is more risky to leave a credit card number at a restaurant than to use it to order a product online.
Ken Russell, vice president of ISDN Net, an Internet service provider based in Nashville with offices in Memphis, said several changes will have to occur before people feel confident about ordering online.
Some of these changes include using clearing houses to make payments online as opposed to credit cards. Clearing house companies like First Virtual Corp. are teaming up with merchants who sell online. The clearing houses are responsible for making sure their clients only purchase from reputable merchants. In addition, the consumer has the confidence of letting the clearing house handle the money which has already been placed in an account.
Russell said people in the future will also need the confidence that they receive from their local newspaperís advertisers when it comes to Internet commerce. He said 65 percent of all advertising dollars are spent on local newspaper advertisements. People know they can look in the Sunday paper to find sales on all type of products.
ìWe do not have that sort of vehicle online,î Russell said. ìWe are going to see the ability for people to go to local sites for local news.î
Although many people are still hesitant to order online, the study found that the population of Internet users has more than doubled since the first fall 1995 study. According to the latest results, 23 percent of all persons over 16 years of age in the United States and Canada have used the Internet during the past month and still have access today. The study in fall í95 showed that only 10 percent had used the Internet during the three months prior to the survey. Increased use of the World Wide Web is also dramatic more than doubling from 8 percent using the Web during the three months prior to the survey in fall 1995 to 17 percent using the Web during the month prior to the most recent report.
As in earlier surveys, this study indicates that Internet users tend to be professionals or managers to a greater extent than the total population.
However, Internet use is becoming more mainstream. In the fall 1995 survey, 50 percent of Internet users were professionals or managers. While this number dropped to 39 percent for the most recent survey, it is still well above the average 25 percent in the United States and Canada.
Shopping is one of the most popular activities on the Internet, and the number of people who shop and buy products on the Internet is growing. A majority of Web users 73 percent spend some portion of their time online searching for information about a specific product or service. More than half of these users 53 percent have searched specifically when making a purchase decision. This is a significant increase over the findings in the fall 1995 survey, when 55 percent of all Web users used the Web for shopping and only 35 percent prior to an actual purchase.
According to the survey, Web shoppers still outnumber online purchasers. Of all Web users, 15 percent or approximately 5.6 million people have used it to purchase a product or service online.
ìThe combination of increased general usage and growth of shopping as an activity, paints an extremely promising future for electronic commerce,î said Stacey Bressler, vice president of marketing for CommerceNet. ìThis confirms the value proposition for companies planning to use the Internet as a marketing tool.î
The CommerceNet/Nielsen Media survey was based on telephone interviews with people 16 years or older from randomly selected households in the United States and Canada during the months of December and January. Sampling techniques and a weighting methodology were employed to ensure that the pool of more than 6,600 respondents would be population projectable to more than 220 million people in the United States and Canada and reliable as a benchmark for planning purposes, according to Neilsen.
ìThe electronic commerce statistics found in the current CommerceNet/Nielsen Media study make it the first to offer hard numbers that begin to measure the viability of the Internet as a medium for buying and selling,î said David Harkness, senior vice president for planning and development at Nielsen Media Research. ìWe believe these findings will have a far reaching impact on the electronic commerce industry.î
The spring 97 survey also indicates a clear narrowing of the gender gap on the Internet. According to the survey, of all Internet users in the target group using the Internet in the past three months, 58 percent are male, down from 66 percent in the 1995 report. But when it comes to shopping and buying, larger differences exist. Males are more likely to search for product information online and are more likely to make purchases. Computer hardware and software is the leading category for attracting both shoppers and buyers on the Internet.
Nielsen Media Research, a Cognizant company, has headquarters in New York and offices in major markets across the United States and Canada. It is the producer of the Nielsen TV ratings and a provider of broadcast and cable television information services, both nationally and locally.
CommerceNet (www.commerce.net) is an association for promoting and building electronic commerce solutions on the Internet. Launched in April 1994 in Silicon Valley, Calif., its membership has grown to more than 200 companies and organizations worldwide.