Barriers Hamper Rise of Online Shopping

According to a recent study by The Boston Consulting Group, Internet users
are rapidly becoming Internet shoppers, but purchase failures, security
fears, and service frustrations are rampant.

Winning the Online Consumer: Insights Into Online Consumer Behavior
discloses that 57 percent of Internet users have shopped for, and 51 percent have
purchased goods or services online. The typical online purchaser completed
10 transactions and spent $460 over the last 12 months.

Yet 28% of attempted purchases failed, and four out of five consumers who
have purchased online experienced at least one failed purchase attempt over
the same period.

The failures resulted from technical problems consumers encountered with the
sites, difficulties in finding products, and logistical and delivery
problems after the sale.

“Retailers tend to think of the North American online market as fairly
homogeneous, but current online consumers actually fall into three groups,
each with a distinct set of demographics, behaviors, and attitudes,” said
David Pecaut, Senior Vice President and Global E-Commerce Leader of BCG.

“We identified three waves of online adopters, distinguished by the length
of their time online, as well as their distinctive activities and purchasing
patterns.”

The first wave of online consumers, the Pioneers, are the 23.2 million users
who have been online for three years or more and now comprise 29 percent of the
online population.

The 39.6 million Early Followers have been online for more than one but less
than three years and represent almost half of the current online population.

The First-Of-The-Masses are the most recent consumers to go online, having
made the leap only in the last year, representing 18 million users or 22 percent.

The report concludes with five key lessons for online retailers:

  • Help the mass market move online by removing access barriers and
    compromises consumers encounter in the online purchasing process.

  • Get on the consumer’s shortlist of top five bookmarks. Over 75 percent of
    Internet users maintain a set of bookmarks, and 43 percent always use them to
    access sites.

  • Engineer a flawless, end-to-end purchase experience that delivers on
    consumer expectations from first contact through to the arrival of the
    product in the home.

  • Target and clinch the heavy purchaser, the group of consumers who will
    drive the business and deliver the greatest value. Online shopping is
    highly concentrated, with 5 percent of the online population accounting for 40 percent of
    all transactions.

  • Cross-leverage online and offline channels. Retailers operating offline
    and online cannot separate the two channels in the minds of consumers.

The study, which included focus groups, one-on-one interviews, and surveys,
was based on research with 12,000 consumers in the United States and Canada
conducted by BCG in the fourth quarter of 1999.

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