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Study: Net retailers need to retarget

InfoWorld
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By Paul Krill

(IDG) -- Internet retailers need to reassess marketing, address credit card security fears, and make the online experience less challenging technologically, according to a study detailed this week by Brigham Young University.

The attitudinal study, which surveyed 1,738 households earlier this year, also categorized online shoppers and non-shoppers into eight different groups, ranging from fearless "Adventurous Explorers" to "Fun Seekers," who use the Internet for enjoyment but are unlikely to buy anything on the Web.

A major impediment to growth in online shopping remains concern about the security of entering credit card numbers online, the study revealed. Some 38.3 percent of respondents checked off the response, "Just like me," to a query about how well they fit the description of someone who does not want to give their credit card number to a computer, according to a co-author of the study, Bill Swinyard, professor of business management at Provo, Utah-based Brigham Young University's Marriott School of Management.

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Another 15.4 percent said the description was a quite a lot like them, while 20.3 percent said it was somewhat like them. Only 10.4 percent said the description was not at all like them, and 14.5 percent said it was not much like them.

Entering credit card numbers online triggers panic in the hearts of many online shoppers, Swinyard said. Other fears include failure to trust online vendors, fear of misdirected merchandise or receiving the wrong items, or having to return merchandise. "But nothing surpasses credit card fear," Swinyard said.

"There's some obvious things e-tailers can do and are not doing successfully [to combat this fear]. That is to do some on-site things to provide assurances," Swinyard said. These assurances could include confidentiality and delivery guarantees and privacy assurances, he said.

Online retailers also could nurture customers comfortable with online shopping and encourage them to persuade friends and family to shop on the Internet, Swinyard said.

The study also showed it is pointless to target marketing to people who are "computer illiterate" and those who avoid shopping online, he said.

Another impediment to online shopping, shipping charges, could be addressed by online vendors occasionally offering free shipment, Swinyard said. "But the last thing you want to see happen is for e-retailers to include their profit margins in the shipping charges," Swinyard said.

The study grouped online shoppers and non-shoppers into the following categories (with percentages of respondents fitting each category following in parentheses}:

  • Shopping Lovers (11.1 percent): Frequent online buyers who will continue to buy on the Web and encourage others to do so.


  • Adventurous Explorers (8.9 percent): Shoppers who believe online shopping is fun.


  • Suspicious Learners (9.6 percent): Those who are reluctant to purchase online more often and are frequently held back because of lack of computer training.


  • Business Users (12.4 percent): These are people who use the Internet primarily for business purposes, do not view online shopping as a novelty, and are not usually champions of the practice.


  • Fearful Browsers (10.7 percent): "Window shoppers" who could become a significant buying group if fears of credit card security, shipping charges, and buying products sight-unseen could be overcome.


  • Shopping Avoiders (15.6 percent): Persons with an appealing income level, but who do not like to wait for products to be shipped to them and like to see products in person first.


  • Technology Muddlers (19.6 percent): Users who face computer literacy hurdles and are not excited about increasing online comfort levels.


  • Fun Seekers (12.6 percent): The least-wealthy and least-educated market segment, who see entertainment value in the Internet but are frightened of buying online.
  • The study, which was funded by IBM and JC Penney, found that 35 percent of households buy clothes online, 28 percent buy books and magazines, 23 percent buy music, and fewer than 10 percent buy flowers, tickets, or pay for travel.

    Users like the Internet because it allows for previewing of products and getting reviews, provides the convenience of home delivery, and removes the hassle of driving, according to the study.

    Trust of Internet retailers also proved an issue. Some 13.2 percent of those surveyed checked off the response, "Just like me," when asked to describe themselves in relation to someone who just does not trust Internet retailers. Another 10.6 percent said the description fit them quite a lot, and 29.5 percent said the description fit them somewhat. Sixteen percent said the description was not at all like them, and 29.7 percent said it was not much like them.

    For the study's purposes, shoppers were defined as male or female heads of households with home Internet access who had made an online purchase from November to December 2000. Online non-shoppers included in the study had the same characteristics, except for the requirement of having made a purchase.








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