Merchants -- Not Consumers -- Are Blocking E-Commerce, Study Says

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A new study of regular Internet consumers found that Web surfers are more than ready to buy online. It's merchants who are sending prospects away in droves.


In half-hour telephone surveys of 1,000 people over age 21 who are online at least one hour a week excluding e-mail, NetSmart, New York, a marketing research and consulting firm, reported that 70 percent of them said they have made online purchases and that 81 percent of them use their credit cards online.


"The bottom line is that security is becoming a nonissue," said Bernadette Tracy, president of NetSmart.


However, 83 percent of "hot prospects" report having left Web sites out of frustration with navigation, downloading, dead ends and lack of interactivity.


"People are looking for ease of navigation, and this is one of the failing points of Web sites across the board," Tracy said. Too many Web sites "get cute" on their home pages rather than offer straightforward navigational information. "People want a road map, not a treasure hunt."


Of those who reported buying online last year, NetSmart said, the average shopper bought nine products and spent $475. The study reported mixed findings for catalogers. It warned that 20 percent of computer users who reported making purchases online said they were doing less print catalog shopping. However, 75 percent reported having made a purchase from a catalog site.


"[Catalogers] are using their Web sites almost like a flier when they should be offering a vast selection," Tracy said.


According to NetSmart, 95 percent of consumers report visiting catalog sites expecting a vast selection and products available only online.


"People are coming to sites with high expectations," she said. "You've got to make sure you don't disappoint them."


According to the study:


* 93 percent of online catalog shoppers are motivated by round-the-clock shopping.


* 91 percent expect superior and more detailed information.


* 83 percent indicated being motivated by instant gratification.


* 81 percent catalog shop online because it's fun.


New-product and merchandise updates are crucial to online catalogers, Tracy said, and recommended dating catalog sites like a monthly magazine to drive repeat visits.


NetSmart also concluded that high-ticket item manufacturers are ignoring the impact the Internet has on retail sales. Sixty-two percent of the interviewees said online information directly influenced their buying decisions. Fifty percent said the Internet is the first place they go when planning a major purchase.


"People go online with a specific thing in mind, but not a specific brand," she said.


As for online surveys, 74 percent of those interviewed said they are willing to fill one out if it will expedite future visits.


The study also offered insights into banner advertising. According to NetSmart, five keys to increasing banner click-throughs are:


* Brand names -- 56 percent of those interviewed said brand names have powerful impact.


* Bright colors -- according to NetSmart, they make banners pop and can double click-throughs.


* The word "new" -- 52 percent reported it is highly motivating on banner ads.


* Discount offers -- 46 percent said they are highly effective.


* The words "Click here" -- they tell novices it is a banner and serve as a call to action.


The study predicted that 1999 will be the year of online banking and investing as 61 percent of respondents reported having visited financial-services Web sites. According to NetSmart, 13 percent reported that they already bank online and 12 percent said they already invest online.

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