E-sales for 2004 were estimated at $69.2 billion reflecting an increase of 23.5 percent over the previous year as reported by the U.S. Commerce Department. Researchers predict that online sales will double over the next few years.
Clearly consumers have accepted shopping online as a good way to find,
compare, and buy goods, and it’s apparent that buying from home with the click
of a mouse will continue to be an appealing way to do business. Searching for
product and service information currently ranks right behind e-mail and instant
messaging as a popular online activity, and more consumers are making the leap
from real world to internet world buying.
The Typical Online Shopper
The first online shopping wave included affluent, well-educated individuals
mostly in the 20-30 age bracket. Today, as more individuals jump on the
internet bandwagon, the profile of an online shopper reflects more closely the
average person on the street.
Though online shopping attracts a wide range of consumers, women have
quickly become the primary buyers in the e-marketplace. About 2/3 of all
shoppers are female. This, of course, reflects the bigger overall female
shopping population and also the input by women when it comes to making or
influencing purchase decisions.
A good portion of these female shoppers are married and have young children.
When women work and raise families, convenience becomes a prime concern. It’s
simply easier to sit and click from the living room than to load up the kids
and head to town. Children tend to like this new shopping arrangement better as
well.
Mentally picture a mom with coupons tucked in her purse, and you have a
pretty good mental image of the average to heavy online shopper. According to a
study conducted by professors at Brigham
Young University,
E-Value seekers (women with an eye for value) plunked down $376 during a single
holiday buying season with around 22% of all seasonal spending in the online
marketplace.
Once a person makes the online shopping leap, he or she is likely to
continue buying over the internet. In fact, many shoppers buy a good percentage
of goods online. If a book purchase goes smoothly, a consumer is likely to
consider buying other items. About 20% of online shoppers use click-and-buy
once per week or more, and this trend is expected to continue.
Advantages of Shopping Online
Online shopping is popular for a number of reasons:
Convenience - In a fast paced society, time saved by
searching, comparing, and buying online versus hitting the streets and browsing
the brick and mortar stores is immeasurable. It can take less than five minutes
to buy a grill online. Load up and visit the mall and it typically takes a
couple of hours to complete the same task.
Selection – Linking up to the world marketplace means a
mind boggling selection of goods and services. Almost any item a consumer can
imagine is available when the shops of the globe are as close as a computer
terminal. If you collect miniature nativity sets from faraway places, you’ll
find few options in any given store but a host of sets by clicking and looking
around online.
Savings – While consumers can drive around from store to
store to price compare, it takes a lot of time, energy, and organization to
nail the best deal. Checking online prices is as simple as clicking to the
various stores and looking around or logging in to a price comparison site
where the data is on one page.
Top online sites for comparison shopping (April 2005) as documented
by comScore:
Shopping.com
Shopzilla
Yahoo Shopping
NextTag
Shop.com
Froogle
PriceGrabber
Overall, customers are satisfied with online shopping with an overall
satisfaction rate of 80 as noted by Foresee Results in the 2005 Annual
E-Commerce report. The rate is somewhat lower than previous years perhaps
reflecting higher expectations on the part of the growing buying public. Early
buyers bought and crossed their fingers. Today online consumers expect and
demand top notch service.
Online Shopping Concerns
More people are shopping using the internet, and both new and old online
consumers are concerned about security issues. A survey conducted by Visa found
that 61% of active online shoppers and 83% of new or potential shoppers wanted
assurance that information was protected before buying online. Recent data
hacking and identity theft cases have raised red flags. Though it is important
to research online companies, to make sure that purchases are made on a secure
server (look for a lock icon on the tool bar) and to take great care in giving
out any personal or credit card data (avoid emails asking for private
data—those are usually spam scams), overall consumers are less likely to
experience financial breaches online than off.
In addition, the Fair Credit Billing Act offers pretty solid protection (for
credit card and NOT debit card users). In most cases, a shopper will not be
liable for more than $50 of unauthorized purchases made on a credit card. Some
credit companies write off all such charges. Be sure to check credit card
statements on a regular basis and look for any odd charges. If you suspect foul
credit play, call your credit card company immediately.
Other negatives noted by online shoppers include:
1. The most mentioned disadvantage to shopping online noted by shoppers is
that you can’t look at, touch, or try on items. This makes it difficult to for
shop for clothing in particular (though clothing is still a big segment of the
online market). Some sites offer various views and provide measurement tips,
but it’s simply hard to beat walking in and trying on a garment.
2. When an item doesn’t fit or doesn’t look as expected, returns can be a
hassle. Various online companies handle returns and refunds in different ways.
Polices may range from no-questions-asked and full refunds (including shipping
charges) to as-is and with no returns accepted. Be sure to read carefully
before buying and know the site policy on handling retuned merchandise.
3. Though the variety online is fabulous, selections at any given store may
be smaller than visiting the comparable (or same name) brick and mortar. If
you’re only hitting one known-name online site for shopping, then you’re likely
not getting the same selection offered offline. For example, your local
Wal-Mart will have more items available on-the-spot at the mega-store than
listed online.
4. Online shopping involves shipping, so purchases are not available
immediately. Most companies pack and mail out fast, but expect a week or so
between purchasing and actually getting the items. Most online venders do offer
expedited shipping, but getting items in a day or two or even overnight can be
quite pricey.
5. If you are a compulsive shopper, then online shopping makes it way too
easy to buy. The monthly (or yearly) budget can go all to heck with instant
credit and fast-as-lightening purchasing. Shopoholics will do best to avoid
online shopping.
Best Bets for Online Shopping
Most any item that can be bought direct can be a good bet for online
purchasing. When the middle marketing team is reduced (salespersons etc.), then
it’s more cost productive for companies to cut online deals. Oftentimes this
savings is passed along. Sites often offer price reductions, online coupons, or
other incentives like free shipping. Cost compare in town versus online, and
you’ll often save money.
Apparel/clothing is a popular market online followed closely by videos,
DVDs, CDs, and books. Home items and pharmaceuticals have continued to increase
in terms of sales. Electronics also rank high.
If you want to purchase a small item (in terms of weight), then you’re
likely to come out better going online. It doesn’t cost much to send a book to
your home. On the other hand, if you’re looking to buy a canoe, you may save a
few dollars, but you’re going to pay heft freight charges to get a bulky and heavy
purchase delivered.
Travel has been a booming marketplace online as destination and related
support companies have raced to provide everything needed for quick-click
traveling. From airline tickets and hotel rooms to show tickets and rental
cars, consumers can net up and compare prices and offerings. If you want to get
a seat for a Broadway show, you can pull up seating charts, find prices, and
read critic/consumer reviews of the productions.
Even consumers who opt not to shop online can research on the internet and
make better buying decisions. Research suggests that half of all online
shoppers research products prior to purchasing, and this option is open and
available regardless of the shopping medium. In other words, if you want to buy
a camera (regardless of where you plan or end up shopping) click online and
find product information as well as typical pricing.
Online Purchasing to Avoid
When you add middle men to the buy/sell equation, then you’re going to pay
for those extra individuals involved. A good example of online purchasing where
more rather than fewer sellers get a piece of the pie is the flower market.
Most online flower venders simply take the order, call the local flower shop
and then place the order. The other flower model tends to be using an overnight
carrier which again adds to the costs. Even if you’re ordering flowers
out-of-town, it’s cost effective to place a call directly to a flower shop in
the town where you want flowers delivered. Put the town and “flower shop” in
search if you don’t know any contacts in the area where you want to send
flowers.
Another market where online has been bumpy is the grocery segment. Some
online grocers reflect and represent the local market while others partner with
local groceries and delivery, but again the costs must be factored in. If an
outside company or group is contracting through the grocery store down the
road, you’re adding more employees to the buying chain.
In addition, when it comes to groceries, you’re looking at many items that often
have to be moved fast and may or may not ship well. Week old bread and smashed
tomatoes are simply not very appealing. On the other hand, beauty and pet items
sold under the grocery store umbrella can be appealing. It may be worth a few
extra cents to have bulk bags of dog food waiting on the porch.
Weight comes into play when considering off versus online shopping. If items
purchased are heavy, then transporting costs may offset savings or even greatly
increase the price paid out of pocket. If the onliner has a brick and mortar
store where items can be picked up or where delivery can be arranged, then some
high weight items can be selected with click-and-buy. If the refrigerator or
stove has to be carted across country, then likely the buyer will kick in some
big bucks to set up and seal the deal.
If arrival time is a key consideration, then online buying is a gamble.
Though online stores try to get items out fast and some even guarantee
delivery, it’s simply impossible to predict and control shipping. If a
heartfelt “sorry” and a coupon on a future purchase won’t make up for the item
being late, then avoid any buying that involves waiting for shipment. After
all, Christmas really isn’t Christmas with no gifts under the tree.
Online Shopping – Give it a Try
Many shoppers do appreciate online buying. It’s convenient to sit at home,
think over buying decisions, do research, cost compare, click buy-it and then
wait for items to arrive on the doorstep. In most cases, buying online means
solid savings as well. This is a recipe for success, and both buyers and
sellers have benefited by having the option to cyber shop.