*Study: 28% of Online Shopping Attempts Thwarted

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Though Internet users are quickly turning into shoppers, purchase failures, service frustrations and security concerns are still prevalent, according to a study released yesterday by The Boston Consulting Group.

Fifty-seven percent of the surveyed Internet users shopped online, and 51 percent actually bought goods or services. The typical online buyer completed 10 transactions and spent $460 over the past 12 months. However, 28 percent of the Internet purchases were unsuccessful, with 80 percent of consumers experiencing one thwarted purchase effort.

"In a sense, there's significant pent-up demand that is still not being fulfilled by the online sites," said David Pecaut, senior vice president and global e-commerce leader of BCG in Toronto.

Most of the purchase failures stem from trouble with locating products and post-transaction logistical and delivery problems.

Conducted in fourth-quarter 1999, BCG's "Winning the Online Consumer: Insights Into Online Consumer Behavior" report polled 12,000 online and offline consumers in the United States and Canada.

The report also dispels another notion - that the North American Internet market is homogeneous. Pecaut said his company identified three online user groups, each distinct in terms of behavior, attitudes and demographics.

The first batch of 23.2 million users is dubbed "pioneers." They have been online for more than three years and account for 29 percent of the online population. Next are 39.6 million "early follower" users who have been online for one to three years. They are almost 50 percent of the Internet population.

In the third instance, BCG calls the most recent converts to Internet usage "the first of the masses." This group of 18 million users, or 22 percent of the Internet population in North America, went online only in the past year.

As time passes, the Internet population looks more and more like the mass market, BCG said. Not surprisingly, all three groups prefer the Internet for communication, not commerce.

More than 80 percent went online for communication like e-mail and information hunting. Only 2 percent of those surveyed said they were motivated to shop online.

Sites need to recognize that the average user is not that experienced from a computer point of view, Pecaut said. Sites have to be extremely intuitive and simple to use for success with consumers.

"In effect, the sites have to reflect the fact that shoppers are amateurs," Pecaut said, "and are looking for sites that appeal to that level of capability."

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