NEW YORK, December 19, 2000 – Online purchasing and browsing are directly influencing consumer spending in traditional stores, according to a new Accenture study. Internet users in the US estimate that they will spend just over $300 online and an additional $300 in bricks-and-mortar stores as a result of online shopping.
“This holiday season, a Web site ceases to be a nice addition or an experimental marketing channel for leading retailers,” said Angela Selden, Accenture Retail practice managing partner, North America. “Instead, as eTailers claim a significant share of the consumer wallet for gift purchases, it has become an imperative.”
The battle for consumers’ holiday dollars will be fueled by record numbers of shoppers who indicated they will be purchasing gifts online this holiday season. According to the research:
“We’re no longer looking at a slow-growing trend,” said Selden. “For the first time, retailers who haven’t created a compelling Web destination may be blindsided by stiff competition from the Internet this holiday season. Next year, the damage could be devastating. We believe that, for retailers, the die is now cast. To be successful, you must be a winner both off- and on-line.”
These findings support those of a recent Accenture Supply Chain study, which found that the frequency of failed attempted purchases over the Internet has dropped to one-third of the 1999 rate. Additionally, the study showed that last year’s service level gaps between eTailers, traditional Retailers and Catalogers are either closing rapidly or have closed completely.
Trusted Names, Compelling Sites Win
The research also finds that holiday shoppers are not frightened away by the high profile demise of several consumer-focused dot-coms (56 percent expressed no concern at all). Indeed, consumers said that past success with Internet holiday shopping and faith that this season holds the same promise is keeping them online. Asked about their online shopping during the 1999 holiday season, the vast majority (87 percent) say they were very or somewhat satisfied with that experience, and only three percent of respondents cite poor experience as a reason not to shop online this year. But almost one-half (47 percent) say they will only shop on Web sites they can trust.
The six retail Web sites shoppers said they anticipate using most frequently are a mix of traditional retailers with online offerings and Internet-only sites: Amazon.com, eBay.com, Barnes & Noble.com, ToysRUs.com, Yahoo! and J.C.Penney.com.
For the first time this year, online holiday shoppers expect to purchase more toys than books. According to the survey, the top five categories in which respondents plan to make purchases online this season include:
Toys (31 percent) Books (29 percent) Clothing/apparel (24 percent) Music (25 percent) Electronics (17 percent)
While more than half of the respondents (55 percent) already have gift ideas in mind and will use the Internet to find exactly what they want, many will go to the Web seeking ideas. In fact, 65 percent report that they most often find the retail Web sites they use through search engines, and 38 percent say they do so by randomly surfing the Internet.
“Web sites that are not compelling have now met the ghost of Christmas past,” commented Jeff Luker, Accenture retail practice managing partner, North America. “For traditional retailers, this provides an additional opportunity and threat: the means to shape consumers’ shopping lists – but only through capturing their interest and attention. This will require understanding their shifting needs and values. For example, our research indicates that banner ads, which were highly effective last year in attracting first-time shoppers to a site, have dwindled in effectiveness. In fact, only 22 percent of survey respondents cite banner ads as an influence in their use of the Internet for shopping this holiday season, but that is the same percentage who cite word of mouth as an influence. Thirteen percent of respondents mention TV and billboards, and six percent cite news reports. A retailer whose site fails to understand such trends and respond with innovation will find that the holiday season simply will not meet expectations.”
According to the research, barriers to Internet use appear to be falling. When respondents were asked why they would not shop online last season, they said that Web sites require too much information for purchases. That reason is far down this year’s list, following the general concerns of privacy and security – an indication that shoppers have become more familiar and comfortable with the process.
In large part, it is the ease of holiday shopping online that drives consumers to the Internet. Top reasons cited for shopping and/or purchasing gifts online include: Top reasons cited for not shopping and/or purchasing gifts online include:
Top reasons cited for not shopping and/or purchasing gifts online include:
While price is not a top-tier factor, once online, respondents consider it key in selecting an online retailer (41 percent of respondents cited finding lower prices over the Internet as a reason for shopping online) and as a basis for comparison shopping (63 percent said they would use the Internet to compare gift prices).
The Advent of Wireless
In what is perhaps another opportunity for retailers, wireless device usage for holiday gift purchase is making its debut this year. According to the survey, only two percent of respondents used a wireless device, such as a cell phone or Personal Digital Assistant, to shop for and/or purchase gifts in 1999. That number increased to six percent this year, and one quarter (nearly 27 percent) volunteer that, if wireless devices offered the accessibility and product selection of the Internet, they would consider using them to make eCommerce purchases. Another 47 percent are not sure whether that would boost their receptivity to mobile purchasing.
“This is the next battle for leading-edge retailers to differentiate their business and capture the customer,” commented Luker. “We believe that, as consumers become increasingly comfortable with mCommerce, the numbers of shoppers using wireless devices will expand dramatically. mCommerce holiday shopping will be a greater factor next year, and retailers need to begin planning now for that shift.”
The survey, fielded by Accenture in November 2000, was conducted among 1,967 U.S. residents 18 years of age or older who have shopped for products and/or services over the Internet. The survey was conducted entirely online.