Study Finds E-Commerce on the Decline

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In one of the first studies to find e-commerce on the decline, Greenfield Online cited that the amount of consumers shopping and purchasing online is down compared to last year.

Its Digital Consumer "Shopping Index VIII" study found the number of consumers shopping online decreased 8 percent compared to last year when 86 percent of the respondents said they were participating in e-commerce. This was an all-time high. This year, those that made purchases fell from 74 percent to 70 percent.

Despite the drop off, there is no reason to panic, said Gail Janensch, spokeswoman for Greenfield Online, a research firm in Wilton, CT. "Eighty-six percent was the highest percentage recorded. That was a zenith; we shouldn't read a tremendous amount into it."

A good indicator for e-commerce vendors was that the number of online shoppers who intend to purchase more in the future rose to 59 percent, up 1 percent from last year.

From a marketing standpoint, the study found that advertisements with a free offer were most likely to bring a consumer to an online merchant's site according to 67 percent of respondents. Discount prices, 47 percent; contests, 43 percent; and brand names, 39 percent, also influenced consumers' behavior.

The top three reasons respondents shopped online: to save time, 60 percent; to avoid crowds, 47 percent; and to find the lowest price, 46 percent.

The biggest obstacle to shopping online changed significantly. In previous years, respondents cited the fact that they couldn't touch and feel a product as the No. 1 reason.

This year costly shipping charges were the chief culprit behind consumers' disdain for e-commerce, according to 51 percent of the respondents. "That is a shift," said Janensch. "Consumers may have been spoiled by a holiday season where e-commerce sites desperate for business rescinded those charges."

Consumers prefer merchants that have both an online and offline presence, according to 43 percent of the respondents; although, only 9 percent had actually made an online purchase and returned it offline. "We certainly see a consistent message that brand name and the places that have a real bricks-and-mortar location seem to be favored by consumers," said Janensch.

There was a strong shift in what consumers are purchasing online as computer hardware fell out of the top five most popular items for the first time. The top five items were books, 26 percent; CDs, 24 percent; computer software, 18 percent; health/fitness/beauty, 14 percent; and clothing, 14 percent.

The health category made its first appearance in the top five. This could be reflective of the growth of women buyers, as 68 percent of women surveyed purchase online compared to 71 percent last year, when there was a 7 percent gap between men and women.

The survey also found that auction sites have actually grown more popular as 44 percent of respondents said they participate in online auctions compared to 40 percent last year.

Greenfield Online surveyed 3,000 experienced Internet users -- the average respondent has been online for three years -- in April 1999 and April 2000 for its Digital Consumer Study.

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