• by Sarah Mahoney  @mahoney_sarah, December 17, 2007

With uncertainties about the economy creeping into more and more holiday purchase decisions, a new survey of online shoppers finds that price trumps all. About 43% of online shoppers said that a product's price is the most important factor in making a purchase in a poll conducted by Synovate of Chicago for Guidance, a technology advisor based in Marina del Rey, Calif. In addition, 18% named free shipping.

"Because newer online retailers can focus on market share and revenues and not profitability, they are an emerging threat for brick-and-mortar retailers," said Jason Meugniot, Guidance president and CEO. "Endless.com., for example, can give customers $5 for the privilege of shipping to them overnight. That makes it tough for a brick-and-mortar retailer, which may be generating less than 10% of growth online, to compete."

When the same respondents were asked to select their second-most important factor, 41% chose free shipping, and 24% named price. A much smaller number--just 8%--mentioned special promotions or coupons as the most important factor, 7% cited features such as recommendations or product reviews, and 4% said speed/efficiency of checkout is most important.

And that in-store pickup and return option, so highly touted by many retailers? Just 1% said that this is most important to them.

While it's no surprise that the economy is driving such bargain-hunting, there were some surprises--including who's buying and who's not, said Meugniot.

Nearly 19% of the total sample said that they don't buy anything online (22% of men and 16% of women.) That's significant, since all the 1,000-plus poll participants are online. Those most likely to rank price as No. 1 are from the highest income brackets: 53% of those earning $50,000 to $75,000 named price as the top factor, compared to just 37% of those earning less than $25,000. Those in the South (46.5%) place greater emphasis on price than those in other regions.

Eggheads seem to go for free shipping. Nearly 26% of those with graduate degrees ranked free shipping first, compared with 14% of those with high school or less education.

While price may currently be top-of-mind with many shoppers, and retailers should certainly be mindful of the demand for lower prices and free shipping, "increasingly, it's becoming clear that consumers want multi-channels--a store experience, an online experience, and maybe a catalog experience," Meugniot said. "Retailers need to offer consumers as many ways as possible to understand and experience their products" in a compelling manner, he added.