Friday, December 29, 2000

Average U.S. Internet User is 41 Years Old

There's a perception that Internet users are young and technology-savvy, but research from Gartner Group, Inc., shows that the average U.S. Internet user is 41 years old. This research shows the average user is gender neutral, married, with 2.81 children, employed, has an income of $65,000 and uses a PC at work. Gartner's findings showed that 70 percent of all Internet users started using the Internet in 1998 or earlier.

As Internet retailers prepare for the rush of online holiday shoppers this year, Gartner analysts said it is important for these retailers to understand who will be the people making purchases on the Internet. Gartner projects worldwide online holiday sales to reach $19.5 billion in 2000, an 85 percent increase over last year's revenue.

At the end of 1998, 108 million U.S. adults used the Internet. Today, 127 million U.S. adults use the Internet. Eighty-six million U.S. adults shop on the Internet, and 58 million users have made a purchase on the Internet within the past three months.

"Instead of being concerned with the age of a person making a purchase on the Internet, retailers should focus on the Internet expertise of the user," said Ann Marshman, vice president for Gartner's e-Business Services. "Internet users with more than three years' Internet experience are twice as likely to have purchased online than Internet users with a year's experience. This is good news for e-commerce as e-consumers experience will only increase over time."

Internet buyers tend to be time-deprived and use technology and electronic products for time management.

"Online buyers care more about saving time than money," Ms. Marshman said. "Two out of three buyers don't perceive Web prices to be lower than prices in stores or catalogs. E-consumers buy for convenience. The Web is all about catering to the customer so stickiness, as a Web strategy, should be deployed very carefully."

Gartner recommends that Internet retailers prepare to support consumer Internet access through three primary devices: the PC, cell phone, and television. While PDAs and Internet devices may be more popular in the future, only 3 percent of U.S. adults own a PDA.

"Consumers will increasingly toggle between platforms. Internet retailers must understand why consumers are using the Web and how the Web is used in conjunction with other business channels or Internet access channels," Ms. Marshman said.

Direct Marketers Report More Efficient Web Operations
Results of a recent Direct Marketing Association (DMA) study found that the vast majority of U.S. marketers (94 percent) have Web sites and more than half (51 percent) conduct e-commerce transactions online.

According to the study, "The DMA's State of the Interactive eCommerce Marketing Industry," approximately one-third (34 percent) of respondents indicated that their average dollar amount per transaction was $99 or higher, while 42 percent of companies reported online revenues for their Web business at $200,000 or more.

"The best techniques for Web marketing are still being decided as standards and protocols about best practices for marketing and advertising continue to emerge," said H. Robert Wientzen, president & CEO, The DMA. "Marketers now have a better understanding of e-commerce dynamics and how they can scale their Web applications to maximize profits synergistically."

Proving that the Internet has no borders, 93 percent of companies indicated that they accept online transactions from outside the U.S., with Canada, the U.K., and Japan being the largest international markets. In addition, nearly two-thirds (65 percent) indicated transactions from international customers represented up to 10 percent of their total transactions.

Fifty-five percent of companies indicated cost savings, and 46 percent cited increased revenues as the primary benefits of using Interactive media. The report also found that respondents considered marketing/information -- targeted mostly to baby boomers -- to be the primary purpose of their Web site. Sales/e-commerce among consumer Web site targets had a far greater perceived purpose (68 percent) than business-to-business (42 percent).

Conducted by The DMA in cooperation with the Association for Interactive Media (AIM) and the Internet Alliance (IA), the study profiles how more than 400 companies involved in direct and interactive marketing are making a profit on the Internet -- and how high that profit is; how they use returns on investment (ROI) to measure profits; how they excel at driving Web traffic - both online and offline; and how they set up and use banner ads and hyperlinks, structure budgets and respond to privacy concerns.

News Tidbits (appears every day on the front page)
- What if you had to pay in order to link to another company's Website? According to Wired, the Albuquerque Journal is charging Webmasters "$50 for the right to link to each of its articles." The charge is being implemented by iCopyright.com who the Albuquerque Journal has an agreement with, even though a senior editor claims he doesn't know about the $50 charge. If the Albuquerque Journal or iCopyright.com ever challenged a Website linking to its articles and not paying the $50 fee, the lawsuit results could have vast implications throughout the Web as most Websites provide links to other sites as a courtesy and service.