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Survey: E-Commerce to Double by End of 1998

Results from a new survey by Forrester Research, Inc. reveal that the amount of North American consumers investing and shopping online will jump from 5% to 10% by the end of this year.

The late 1997 survey of 120,000 North Americans also indicates that those in low-income households are expected to join the online bandwagon, thereby increasing the number of potential e-commerce consumers.

"We're seeing a real paradigm shift in that PC ownership today is defined by one's attitude toward using technology and not based on income," said Josh Bernoff, the report's author and principal analyst in Consumers & Technographics Strategies at Forrester. "Mass marketers must prepare for a much more economically diverse on-line community."

Participants in the survey were segmented by technology motivation, attitude toward technology, and disposable income. Consumers were then further broken down into groups according to family, career, and entertainment.

The numbers indicate that 43% of households own one or more PCs, and 25% of those households are online. This was also the group that scored highest in income, technology optimism, and frequent PC use.

The survey also showed that only 39% of low-income optimists currently own PCs, and of those, 23% are online.

However, the decline in PC prices and keen interest in home budgeting, educational software, and the Internet will boost PC-owner penetration to 49%, with 29% of those owners predicted to be online by year's end, Forrester reported.

On the retail front, the bad news is that consumers who lack money and PC experience aren't ready to take the online shopping plunge.

Who then makes up the new breed of online shoppers and investors? Three groups emerge: those who claim they are ready to buy online, online stock-trackers, and customers who do their banking on the Net.

"As consumers move on-line, mass marketers must develop strategies that intercept this audience as it does," said to Bernoff. "Mainstream consumers will concentrate their early on-line activities on research. Consumer electronics, real estate, and home improvement sites should deploy deep informational sites to meet this need. Banks, grocery stores, and discount retailers need to invest in a simple user interface and scale economies to satisfy less-sophisticated, price-sensitive customers."