The in-home shopper
In order to understand all there is to know about in-home shopping and the Internet, we must first take a look at who exactly is doing the shopping and how many of these shoppers already exist.
According to research by a Stamford, Connecticut-based company, @Plan, 24 percent of Web users are actively shopping online today. That sounded like a pretty high number to me at first, but when I stopped and thought about it, and looked at some of the research, I began to realize that this percentage was right on target. People are using the Internet to shop for airline tickets, stocks and mutual funds, computer hardware, car rentals and books. The possibilities are endless if you are in a shopping mood.
Consumer spending in general in the United States totaled more than $5 trillion in 1997 and will continue to grow in the foreseeable future. According to the Strategis Group's most recent findings, this represents a tremendous opportunity for online merchants and Internet payment system vendors.
In 2002, 30 percent of Internet users, or 18.3 million shoppers, will order or purchase goods and services over the Internet on a regular basis, a figure more than triple the six million Internet users who frequently or occasionally shopped online in 1997 (Visa, 1996). Currently, 25 percent of Internet users have shopped online while 12 percent have conducted a banking transaction over the Internet. Depending on the frequency and intensity of these consumers' online shopping habits, the total online marketplace could be valued at anywhere from $4.5 to $17.9 billion in 2002 (1996).
Estimated percentages of daily Internet shoppers
(Statistics obtained from Strategis Group, Inc. 1998)
On-Line Purchasing Conversion
This conversion rate,or willingness to shop on-line, is even higher for younger consumers: 77 percent for consumers under 25 years of age, and 67 percent for consumers aged 26 to 34.
Those that have the ability to get on the Internet have made an online purchase in the last 12 months
(Strategis Group, 1997)
A number of studies have been done on the in-home shopper. The in-home shopper belongs to a higher-than-average socio-economic group, measured by education, income and occupational status of the head of the household (Gillett, 1970). The in-home shopper is also less conservative than the non-shopper (Darian, 1987). This shopper is more willing to take risks and try new things. He or she is also more cosmopolitian than the non-shopper (1970).
Another interesting factor is age. The Yankelovich Partners in 1996 reported that mail-order catalog shoppers tend to be younger than non-shoppers. The findings show that the typical Internet user is a male aged from 20 to 40 (GVU, 1994). The typical Internet user still is male, however women have now taken up about 32 percent of the market.
Benefits and Disadvantages
The benefits of in-home shopping are pretty straight forward to all of us. In-home shopping offers convenience, meaning you can shop 24 hours a day with no walking, waiting or dressing involved. There is a wide product assortment, products are fairly unique and personalized, you have a geographically larger shopping area, reasonable price and descriptive product information.
It is natural to think that the above benefits apply to Internet shopping as well. These benefits do apply and the Internet offers others as well. These include lower prices, comparison shopping, speed in finding items and shopping as a recreational activity and not a chore.
In-home shopping does have some disadvantages in relation to in-store shopping. One major disadvantage is the risk perceived by the consumer. The inability to physically inspect a product, to make comparisons, and delivery delays all put the consumer at risk. Another disadvantage is the lack of the benefits of in-store shopping, such as diversion from routines of everyday life, sensory stimulation, social experiences, and comparison of goods (Darian, 1987).
As mentioned above, Internet shopping is very much like conventional in-home shopping from catalogs or mail orders. One could easily think that Internet shopping would be affected by the same factors as conventional in-home shopping. However, the rapid development of the Internet and the profile of the Internet user lead us to believe that there may be some other things that explain Internet shopping behavior too. Let us not forget these factors that explain Internet shopping behavior:
1. Experience in conventional in-home shopping methods
2. Use of the Internet (experience, frequency of use, duration of session)
3. Work in the computer branch
4. Convenience factors
5. Uniqueness of the products sold on the Internet
6. Perceived risk
7. Desire to experiment
A Shopping Medium ~
Survey Results ~
Shopping Sites ~