More Users, Less Trust

Although they’re growing in number and spending, consumers report greater distrust and shopping less often online, according to NFO Worldgroup — a finding that has important implications for e-tailers and marketers.

Comparing U.S. consumers from the fourth quarter of 2001 to the third quarter of 2002, the researcher found that more Americans — 61 percent — are going online, as opposed to 59 percent at the end of 2001. More consumers also surf the Internet daily (35.3 percent versus 33.7 percent).

Despite the growth trends, fewer Internet users say they have overall trust in the medium. According to the study, consumers who said they trusted the Internet declined from 26.7 percent at the end of 2001 to 25.5 percent in the current survey.

On the plus side, however, satisfaction showed a one-point increase (40.1 percent to 41.1 percent)

Surprisingly, with the exception of financial transactions, fewer Internet users trust that their personal information will be safe when engaging in specific online activities — indicating that marketers and e-commerce players could benefit from efforts to improve consumer confidence in privacy and security.

Levels of Satisfaction and Trust
  Extremely satisfied with the following online activities Trust that personal information will be safe when doing the following online activities
  Q4 2001 Q3 2002 Q4 2001 Q3 2002
Personal communication 36.5% 39.9% 24.1% 22.9%
Personal research 26.6% 31.7% 23.7% 23.2%
Purchasing products 24.0% 24.9% 21.9% 21.2%
Financial transactions 25.5% 32.2% 27.5% 31.5%
Playing games 28.1% 29.0% 29.7% 29.9%
Work-related activities 25.8% 28.6% 25.7% 25.3%
Source: Consumer Internet Barometer

The research, culled from a quarterly mail survey of 5,000 male and 5,000 female heads of household, also found that there are fewer online consumers who have made at least one Web purchase during third-quarter 2002, compared to 2001’s holiday season.

But consumers increased the amount of money they spent, particularly for products in the $251-to-$500 range — which rose from 14.8 percent to 16.3 percent — and in the $1,00-and-over category, which increased from 4.9 percent to 6.8 percent.

“The rise in average spending per individual, coupled with the increase in traffic as the holiday season approaches, should help boost online sales in the coming months,” said Lynn Franco, director of the Consumer Research Center for The Conference Board.

Spent more than $250 online in the past 3 months
Online frequency Q4 2001 Q1 2002 Q2 2002 Q3 2002
Daily 30.9% 36.0% 33.3% 33.9%
Several times a week 22.5% 26.1% 24.7% 24.7%
About once a week 16.7% 13.4% 18.2% 20.4%
At least monthly 14.7% 21.0% 15.9% 22.3%
All households 27.8% 32.1% 30.0% 30.9%
Source: Consumer Internet Barometer

The study also found that there was an increase among consumers who primarily used the Internet for personal research (19.2 percent, up from 18.7 percent in fourth quarter), purchasing products (2.8 percent versus 2.6 percent), and work-related activities (18.1 percent, compared to 17.3 percent earlier).

NFO Worldgroup also recoded a decline in personal communication (36.4 percent, versus 39.2 percent) and playing games (4.0 percent, compared with 4.1 percent).

Christopher Saunders, senior editor, contributed to this story.

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