Study: 21 Percent Online Don't Buy

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BURLINGTON, VT -- A study to understand use of the Internet by catalog customers commissioned by the New England Mail Order Association via Millard Group, Peterborough, NH, revealed that 54 percent had Internet access, and of that number, only 21 percent have purchased products online.


These and other findings were revealed yesterday at the annual NEMOA fall conference 1999 here. The study was presented as an attempt to begin to gauge the impact of online commerce on the offline catalog world. Many catalogers consider the Internet a threat to traditional sales channels. Future research is recommended by Millard to estimate the rate of increase or decrease in specific findings and to provide additional measurement of spending patterns by consumers.


Current mail order customers - 4,500 each - of 12 member catalogs, including Chadwick's of Boston, J.Jill, Rue de France, McFeely's Square Drive Screws, Paragon and Plow and Hearth were contacted by phone in June 1999.


Of those consumers who did not purchase online, security and privacy were overwhelmingly their biggest concern, which illustrates issues that have plagued the online commerce world don't seem to be disappearing anytime soon. John Hayes, executive vice president, J. Jill Group, and a member of the NEMOA board, urged members to continue to "support and be part of" the DMA's stand on clear privacy policy.


Separately, an informal survey of response rates for catalogs vs. online of NEMOA members indicates those numbers are comparable. A median of $580 spent per year by customers is still larger than the online number- $380 - but the trend indicates catalog purchases will decrease while online is expected to increase. It's not yet clear whether growth will continue at current levels. There is also the question of how the 2 mediums feed each other and how they might work in combination to drive customers to purchase or not and in which channel the final purchase occurs.


Catalog marketers seem well aware that shopping habits are changing and affecting mail order as well as retail, according to Hayes, despite the large numbers who don't have Internet access. The association intends to provide ongoing intelligence to catalog marketers regarding the effect it will have in the offline arena. Catalogers currently might maintain an edge simply due to penetration. "If half our catalog customers didn't have access to their mailbox, we'd be in big trouble," he said.


"We plan to continue this kind of research," said Hayes. He added the most important thing to be aware of is that expertise doesn't exist yet. "It's such a new and fast changing environment, that I don't think there is a lot of expertise because there's not a lot of results yet (regarding long term historical data on spending trends)."


One NEMOA member said the study poses many open-ended questions. "It's a really good base line," said Cathy Murphy, senior account executive at list company Fasano and Associates, San Diego, CA. "More information needs to be collected so we can continue to stay on top of this business."
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