Despite the presence of major retail store brands in their market, consumers in coastal cities like New York, San Francisco and Boston shop on the Internet more often than their landlocked counterparts.
A new Online Shopping Cities report by Dulles, VA-based Internet service provider America Online Inc. said coastal cities also dominate the offline retail market.
“Certainly they're online more because there are centers of technology literacy in those areas, but why they're more active in the shopping area may have more to do with their overall habits in terms of shopping and as consumers as opposed to specifically online habits,” said Katherine Borsecnik, ex-president of AOL Interactive Group and now a consultant.
San Francisco topped the list. Consumers there research products they're considering buying an average of 24.6 times monthly and spend an average of $225.20 monthly on 5.2 purchases. New Yorkers research a bit more, 24.9 times monthly, and spend $221.10 on 5.2 purchases.
On the list in descending order are Sacramento, CA; Los Angeles; Boston; San Diego; Seattle; Portland, OR; Baltimore and Washington, DC.
“Some of these mid-sized cities clearly are connected, and they're significant players in the overall e-commerce picture,” Borsecnik said.
The survey analyzed regional shopping behavior based on the average number of times consumers research or buy products and services monthly and the average amount spent.
AOL's Digital Marketing Services Inc. arm interviewed 6,976 consumers older than 18 through OpinionPlace, a research site jointly marketed with American Airlines. The survey was conducted Aug. 28-Sept. 30.
Based on the survey, online shoppers spend about $200 a month. Fifty-seven percent of the time they are buying for themselves and the rest for gifts. Online shoppers ages 18-19 spend an average of $136 per product, compared with $111 spent by people older than 50.
Interestingly, the survey found that nearly all respondents do most of their shopping from home, not work. The ratio was 95:5. This contradicts other research showing shopping from work is on the rise because of faster office Internet connections.
The survey's findings may scare retailers with a lot vested in bricks-and-mortar infrastructure. There is the loss of foot traffic and fixed overheads like rent and staff salaries. Add to that the lost opportunities for sale of multiple items or impulse buys.
But Borsecnik said the rise of online shopping was not necessarily bad for retailers. Their sites are improving, and consumers are familiar with their brand and return policies.
“The estimate is that for every dollar consumers actually expend online, online influences through research and things like that an additional $5 in the local economy offline,” Borsecnik said.
