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Online Shopping: Frictions, Frustrations, and Fixes Presented to the Information Technology & Innovation Foundation February 22, 2008 John B. Horrigan, PhD Associate Director for Research. If you had an internet connection, why wouldn’t you shop online? - PowerPoint PPT Presentation
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Online Shopping: Frictions, Frustrations, and Fixes
Presented to the Information Technology & Innovation FoundationInformation Technology & Innovation FoundationFebruary 22, 2008
John B. Horrigan, PhDAssociate Director for Research
ITIF, February 2008 2
• If you had an internet connection, why wouldn’t you shop online?
◘ Based on national random digit dial survey of 2,400 adult Americans conducted in August & September 2007
ITIF, February 2008 3
Trends: internet use & online shoppingTrends: internet use & online shopping
0
10
20
30
40
50
60
70
80
2000 2001 2002 2003 2004 2005 2006 2007
Internet use
Buy product online
Broadband at home
Retail e-commerce revenues(in $B quarterly)
ITIF, February 2008 4
Reasons to think people would embrace online shopping
• Convenience– 78% of internet users either agree (53%) or
strongly agree (25%) that it is.
• Saves time– 68% of internet users either agree (47%) or
strongly agree (21%) that it does.
• Get bargains– 49% of internet users either agree (39%) or
strongly agree (10%) that it’s a place to find bargains.
ITIF, February 2008 5
Barrier to online shopping• Worries over security
– 75% of internet users agree (39%) or strongly agree (36%) with the proposition that they don’t like sending personal or credit card information over the internet
• Frustration– 43% of online users have experienced frustration
over difficulty in finding information while shopping online
• Complicated– 26% of internet users agree (22%) or strongly
agree (4%) that online shopping is complicated.
ITIF, February 2008 6
For the most part, people clear hurdles to For the most part, people clear hurdles to shopping onlineshopping online
Two-thirds of internet users have bought something online
Four-fifths of online users turn to the internet for research about products they are thinking of buying
One-quarter of online users, on typical day, do some sort of activity online connected to shopping online
ITIF, February 2008 7
Trends in online shopping Trends in online shopping (% of Americans who have ever (% of Americans who have ever boughtbought a product online) a product online)
05
101520253035404550
2000 2001 2002 2003 2004 2005 2006 2007
ITIF, February 2008 8
Researching potential purchases Researching potential purchases (% of Americans who, on typical day, do research on a product online)(% of Americans who, on typical day, do research on a product online)
0
2
4
6
8
10
12
14
16
2000 2002 2004 2005 2007
ITIF, February 2008 9
Aggregate numbers shield variations within Aggregate numbers shield variations within the online populationthe online population
• Older Americans– Don’t see the convenience or time-saving benefits
to online shopping
– Don’t see internet as a source of bargains
– Only somewhat more likely to see risks to sending personal information over the internet
• Low-income Americans– Very likely to see the risks to online shopping
– Not too likely to see the benefits to online shopping
ITIF, February 2008 10
Buying products online -- by incomeBuying products online -- by income
58
30
63
49
73
59
8379
0
10
20
30
40
50
60
70
80
90
LT $25K $25K-$60K $60K-$100K GT $100K
% of online population% of general population
ITIF, February 2008 11
Share of internet users, by income, who Share of internet users, by income, who strongly agreestrongly agree that they don’t like sending that they don’t like sending credit credit cardcard information online information online
0
5
10
15
20
25
30
35
40
45
LT $25K $25K-$60K $60K-$100K GT $100K
ITIF, February 2008 12
Share of internet users, by income, who Share of internet users, by income, who strongly agreestrongly agree that online shopping is that online shopping is saves timesaves time
0
5
10
15
20
25
30
35
LT $25K $25K-$60K $60K-$100K GT $100K
ITIF, February 2008 13
What factors have biggest impacts on What factors have biggest impacts on online shopping?online shopping?
• Security:– If people weren’t worried about security of transactions,
levels of online shopping would be 7 points higher, i.e., 73% vs. 66%.
• Convenience:– If skeptics came to see the convenience of online shopping,
levels of online shopping would be 3 points higher, i.e. 69% vs. 66%.
• Time-saving:– If more people saw online shopping as a time-saver, levels
of online shopping would be 2 points higher, i.e. 68% vs. 66%.
• Technology:– Getting broadband to the final quarter of home internet
users with dial-up would means levels of online shopping would be 6 points higher, i.e., 72% vs. 66%.
ITIF, February 2008 14
Why does it matter?Why does it matter?
• It takes a lot of time to be poor.
• Significant “consumer surplus” benefits of e-shopping.
ITIF, February 2008 15
What to do?What to do?
• Better marketing by industry
• Digital literacy
• Better broadband more & faster