As Nasdaq sputters along in dot com shame, a few million
dogged Internet consumers have ignored the crash. They
continue to happily buy away. The good-news story is not
popular with business writers, but Web retailing continues
to grow seemingly unaware that the online mall is crashing
down around them as they choose garden tools, sell sports
cards and order vacation packages. Things aren't perfect.
There has been somewhat of a dip since Christmas, but I
think most Net retailers can live with a post-holiday slump.
Retailers have weathered after-Santa blues since the English
switched from wassailing to kids toys in the mid-1800s.
We decided to take a look at recent reports on Internet retail
sales just to see if the Net stock gloom was blunting the
steady expansion of online commerce. We found some softening
in the rate of growth, but we certainly didn't find any
contraction in consumer behavior. The shrinking effect right
now seems limited to the number of dot coms rather then the
number of consumers. In fact, if you subtract the bizarrely
heightened expectations for the Internet, its growth is
coming along just fine. By any standards other than the
Net-boom mentality, Internet expansion continues to be
fairly spectacular.
Net buyers hit ten quarters of continuous buying
Greenfield Online reported that for 10 consecutive quarters,
60 percent of U.S. Online consumers have made at least one
purchase on the Web within a 90-day period. And 28 percent of
these shoppers have clicked on Internet ads while shopping.
Not surprisingly, those with an annual income of $50,000 and
above are more likely to purchase goods (81 percent) than
those whose income is below $50,000 (64 percent). Women on
the Net buy at a slightly higher rate (74 percent) than men
(71 percent). The top categories of goods continues to be
books and CDs, followed by clothing, toys and computer
software.
Rich buyers seek service basics online
Forrester Research looked at the shopping habits of rich
consumers, those with investable assets of $1 million or
more, and found that these shoppers are more interested in
strong, basic service than they are in virtual exclusivity,
extravagance and entertainment. "Affluent shoppers have been
buying longer, feel more comfortable buying, buy more
frequently and, of course, spend more money," said Ekaterina
O. Walsh, a senior analyst at Forrester. "They buy online for
the same reasons that all online buyers do and care about
price and positive experiences with Web stores." Forrester
recommends that sellers of luxury goods should concentrate on
purchasing ease and a convenient return process.
Visitor traffic dips
PC Data Online found that traffic to leading ecommerce sites
declined about 4 percent in February following an 18 percent
seasonal drop in January. Goldman Sachs analysts cited
port-holiday seasonality, a slowdown in the rate on new
consumers adopting ecommerce, and slower overall consumer
spending as the factors in the slower month-by-month growth
of Internet retailing. However, this year's figures are up 63
percent over last year. Hey. Did anybody see that? I'll say
it again. We're up 63 percent over last year! Some blues.
Features that will keep your sales growing
Consulting giant PricewaterhouseCoopers released a survey that
identified the site features that are most likely to capture
sales. The research found that with the exception of search
capabilities and close-up product views, most Website
features are never used by the majority of Internet shoppers.
The search function is overwhelmingly the top feature used by
consumers, with 77 percent saying they have used search
functions while shopping.
Other site features such as wish-lists and personalization
were found to be less important to shoppers. As a side note,
we found a study by the International eRetail Association
that listed wish-lists as a tool that works well for building
loyalty, so go easy on making assumptions based on Internet
studies.
The take-away on all of the recent information about Internet
retailing is that it continues to grow rapidly in spite of
the gloom that fills the business media. To paraphrase Mark
Twain, the rumors of the death of retail ecommerce have been
greatly exaggerated.
