For further information: Lynn Franco
(212) 339-0344
The Conference Board
For Release Monday November 22, 1999 at 10 a.m. ET Release #4522A
INTERNET BUYING INCREASING AMONG U.S. CONSUMERS
But Three-Fourths Are Yet To Buy On-Line
Nearly a quarter of all U.S. households bought something over the Internet during the past year, with the majority of single purchases averaging less than $100.00, according to a new survey released by The Conference Board.
The survey was conducted for The Conference Board by NFO Research, Inc., an NFO Worldwide Company (NYSE:NFO) of Greenwich, Connecticut. It was based on a representative sample of 5,000 households.
"While Internet buying is climbing, three-fourths of all consumers have yet to make a purchase on the Net," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "This latest survey shows that virtually all the traffic is coming from young people and the affluent. While privacy and security issues are clearly keeping many consumers off the Net, these issues will resolve over time and marketers will effectively penetrate this vast but still untapped market."
Younger households were more likely than older households to have made an online transaction. So were consumers in the more affluent brackets, compared with poorer households.
BOOKS, CDs, AND COMPUTER GEAR BIGGEST LURES
Consumers mostly favored entertainment items, making books, CDs and computer accessories the top sellers over the Internet. These items are relatively inexpensive; a substantial proportion of survey participants said their biggest single purchase was under $100.00.
When asked about purchasing further via the Internet, a large percentage of survey participants cited security and pricing issues as major barriers to additional electronic purchases. For those individuals yet to break the e-commerce barrier, security and privacy issues were cited as the key deterrents.
"Smart companies are already working to clear these hurdles," Franco notes. "The big drive is to convert traditional shoppers into on-line buyers and to transform novelty buyers into repeat customers."
Study highlights:
AGE FACTORS
-- Householders age 25-34 are the most likely online shoppers, with more than 40 percent having made such a purchase.
-- The 35-44 age segment is the second largest market; about a third of these householders have bought online.
-- Householders in the 65-and-over group are least likely to shop online; less than 10 percent have made such a transaction.
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-- Affluent householders, those earning in excess of $50,000, tend to spend well-above average. More than 40 percent have purchased via the Internet.
-- The second largest e-commerce market is the $35-$50,000 income bracket. More than a quarter of householders in this middle-income group used the Internet to make a purchase.
REGIONAL FACTORS
-- More than 30 percent of householders residing in the Pacific region claim to have shopped online over the past year.
-- New Englanders ranked second; almost 30 percent of householders in this area had engaged in e-commerce.
-- Householders in the West South Central ranked lowest on the shopping scale; only 18 percent of these residents had shopped online.
WHAT PEOPLE ARE BUYING
-- The "hottest buys" among consumers were books: approximately 45 percent of all respondents have bought at least one.
-- Computer hard/software was the second most popular item among consumers, with more than 30 percent having purchased a computer-related item.
-- The third item most likely to find its way into consumers' shopping baskets were CDs, purchased by more than 25 percent of shoppers.
-- Travel, though fourth, also enjoyed popularity among consumers. Nearly a quarter of consumers have made a travel related purchase via the Internet.
HOW MUCH MONEY IS BEING SPENT
-- Consumers are rather conservative Internet spenders. About one-third claim their largest purchase totaled less than $50.
-- An additional 33 percent have spent between $50 to $199 on net purchases.
-- About 8 percent were at the more extravagant end of the scale. These householders spent in excess of $1,000.
WILL CONSUMERS BE REPEAT BUYERS?
-- To become frequent buyers, consumers want better prices. More than 60 percent claim that the price of goods plays heavily in their decision to make another online purchase.
-- Improved security ranked as the second issue consumers tackle in their decision to buy or not to buy online. Nearly 55 percent feel this is an important issue.
-- Third, but still a substantial stumbling block, is navigation. Nearly 40 percent of respondents would like greater ease in finding their products.
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