Most Internet Shoppers Still Don't Buy Online, Study Says

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Nearly three-fourths of purchases researched online are completed at bricks-and-mortar stores or on the telephone, according to a new mid-year, July 1999 study on Internet user trends by the Strategis Group, Washington.

About 43.1 percent of browsed products are bought offline, compared with only 15 percent bought online, an improvement over the previous survey period of November 1998, when 15.1 percent of browsed products were bought offline and only 11.6 percent purchased on the Internet.

"While e-commerce is growing feverishly, it remains a fact that most Internet users have never actually completed a transaction online," said Jeff Moore, Internet analyst at Strategis, which polled 502 Internet users and 500 non-users for the latest study.

But the percentage of consumers who claim they have never bought online has fallen to 30.2 percent in mid-1999, from 59 percent in the same period last year and 39.4 percent in November 1998.

Consequently, the number of Americans with online-buying experience rose to 42 million in mid-1999, up from 27 million last November.

More than 60 percent of all Internet users, or 61 million shoppers, now browse online for products and services, up from 54 percent -- or 45 million shoppers -- in November 1998.

The survey also showed that 71.2 percent of home-and-work users browse online, compared with 56.8 percent of home-only users and 41.4 percent of work-only users. The figures for the same profiles in end 1998 respectively were 68.9 percent, 49.5 percent and 38.9 percent.

People are getting more comfortable with the Web and more knowledgeable about it, Moore said. "The constant stream of e-commerce advertising has also had an impact. The next trick, however, is to get people to complete the transaction online," he pointed out.

"As more and more people get that first online purchase under their belt, e-commerce will soar," Moore said. "Security is another major issue, as nearly half of all Internet shoppers have canceled a transaction in the past due to security worries.

"The biggest worry is that their credit card information will be intercepted in cyberspace. Online retailers should do everything possible to reassure customers about shopping security and also provide an alternate means of purchasing, such as a toll-free number."

Men were marginally more open to browsing online for products, slightly more likely to conclude the purchase on the Internet, and spend more money online, according to the study. Ten percent of men every week bought a product on the Internet, compared with 4 percent of women.

Aggregate national spending online by males each month was an estimated $1.9 billion. The same figure for females was nearly 70 percent lower at $700 million. Monthly spending over $400 was excluded in the survey.

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