Income appears to affect the likelihood of Internet buying. The study finds that more than 30 percent of respondents with household income of $75,000 or more, and 27.3% of respondents with income of $100K or more, expect to purchase over half of their holiday gifts online. In contrast, 11.9 percent of those who earn less than $20,000 expect to buy more than half of their holiday gifts through the Web; one-third of those making under $20,000 will not make any online purchases.
In addition to increased broadband access, one of the biggest growth drivers for online buying is "comfort level," according to Sarah Leary, VP of product marketing at Shopping.com. "If you have more disposable income, you feel more comfortable in taking the risk of buying a $20 book than would [someone with less income]," suggests Leary, adding: "Also, people with higher incomes do more shopping."
Credit card security and privacy concerns are deterrents, though. As noted in the study findings, 52.2 percent of participants count credit card information security as their greatest concern when buying online. More than 40 percent of respondents named personal information privacy as another Web shopping worry. Although the number of respondents who said that credit card security was a "great concern" is lower than that of BURST!'s October 2002 study finding that 61.3 percent of participants noted credit card security concerns, Chuck Moran, manager of market research at BURST!, opines: "I don't know if that will ever go away....Everyone is always going to know someone, or know someone who knows someone" who has experienced credit card fraud.
In all, 55.6 percent of participants in the study named the Internet as their primary source of information when evaluating and comparing products. And 42.6 percent of those people make their purchase online. But many survey respondents do not necessarily see the Internet as part of a closed shopping vacuum. More than one-quarter use the Web to find the closest store location to make a purchase. Over 66 percent go online to research and compare brands, and 54.7 percent do so to compare retailers and prices.
"Online shopping lets consumers be in four stores at once," explains Ellen Tolley, spokesperson for the National Retail Federation (NRF). The organization's 2003 eHoliday Mood Study found that 59 percent of retailers reported revenue boosts of 25 percent or more for the 2003 online holiday season. According to Tolley, the study also showed that 44.2 percent of consumers with household incomes above $50,000 purchased gifts online, compared to 32.7 percent of those with household incomes below $50,000.
More men than women (63 percent versus 47.9 percent) use the Internet as a primary information source for shopping, according to the BURST! study. But that doesn't necessarily mean that women are shopping less. Shopping.com's Leary notes that the site's audience has shifted in the past 18 months to include a higher concentration of women. With that, categories such as home and garden and jewelry and clothing have grown in popularity, overtaking men's favorites such as electronics and computers. While electronics and computer gear often require research, home, jewelry, or apparel purchases are driven more by taste than product research, says Leary.
According to the BURST! survey, which measured the responses of 4,700 Web users 18 years of age and older, respondents named online shopping concerns including shipping costs (32.1 percent), product quality (26.8 percent), Web site return policy (24.1 percent), product availability (18.6 percent), and shipping issues/delays (17.5 percent). "Usually the biggest hurdle for online retail is shipping," affirms NRF's Tolley, citing time and price considerations.
Despite Web shopping barriers, Shopping.com's Leary is "looking forward to this holiday season," predicting that growth in the industry will continue over the next five years until it reaches the level of print catalog sales.