Monday, January 22, 2001

Online Shopping Grows, But Satisfaction Slips

While more Internet users shopped for and purchased holiday gifts online this year than they did in 1999, nearly one-half reported at least some dissatisfaction with their online shopping experience. A recent survey conducted by PricewaterhouseCoopers indicates that while the convenience of shopping online lured more holiday shoppers out of the malls this year than last, the percent of online purchasers reporting total satisfaction with their purchases slipped from 1999 levels.

They Came, They Shopped, They Bought
Nearly eight out of ten of Internet users shopped online for gifts during the 2000 holiday season - up from 69 percent in 1999. This year, 74 percent of online gift shoppers actually purchased gifts online, up from 67 percent in 1999.

While these increases are good news for online retailers, holiday shoppers still did most of their gift shopping and purchasing at brick-and-mortar stores this year - often taking advantage of the extensive promotions, deep price cuts and bargains available during one of the most promotional holiday seasons in recent memory.

Sales Up; Satisfaction Down
" However, online retailers should not be too quick to celebrate the increased rate of online gift shopping in 2000," commented Mary Brett Whitfield, Columbus-based Director of the PricewaterhouseCoopers E-Retail Intelligence System. "Getting online gift shoppers to return in the New Year is crucial to their success," she continued.

Online holiday gift purchase satisfaction slipped slightly in 2000 as compared to 1999, and in fact, nearly one-half of all online gift shoppers this holiday season reported at least some dissatisfaction with the online shopping experience.

The most commonly mentioned areas of dissatisfaction with online shopping included merchandise out of stocks, excessive page load times, and products not available online. The biggest sources of dissatisfaction with online gift purchases were gifts not arriving on time for the holidays, not receiving adequate e-mails regarding order status, and having to pay extra to ensure that orders arrived on time.

A bright note is that online shoppers are not easily discouraged from shopping online. Survey results indicate that more than eight out of ten online gift shoppers that encountered problems were not deterred from online shopping. In fact, one out of ten continued shopping the site despite the problem(s), and seven out of ten abandoned the site for another online shopping site or returned to the same site to resume shopping later.

Convenience Still Reigns
Price concerns took a back seat to convenience factors when Internet users shopped online this holiday season. In fact, less than one third indicate that they shopped online because lower prices were available or because they received special promotions to purchase at online shopping sites.

The most frequently cited reasons Internet users shopped online include:

- I can shop anytime day or night.
- It takes less time to shop for products at online shopping sites compared to stores.
- It is easy to research product information.
- I dislike dealing with the number of people at malls/stores during the holidays.
- I can order gifts for people and have them delivered to their homes.
- It is easier to shop for products at online shopping sites compared to catalogs.
- Access to brands, products or stores not available where I live.

The Holiday Mall Attraction
Although online gift shopping and purchasing are increasing, some Internet users are still attracted to the hustle and bustle of shopping at stores during the holiday season. Survey results indicate that Internet users still did most of their holiday shopping - 60 percent - at stores, while online shopping sites captured just 26 percent of Internet users' holiday shopping activities.

This is an advantage that multi-channel retailers with online operations have over pure-play e-retailers. Among Internet users who did not shop online for gifts, 44 percent indicate that they didn't do so because they enjoy shopping at malls/stores during the holiday season. More than one-third of non-online gift shoppers indicate that their refusal to pay shipping and handling charges and concern with difficulty returning gifts to online retailers contributed to their decision not to shop for gifts online.

Online Shoppers' Budget Crunched
In 2000, just 58 percent of online holiday gift purchasers stated that they spent a larger share of their total holiday budget online compared to 79 percent in 1999.

"As online gift purchasing becomes more common, more and more online gift purchasers will reach their threshold for share of gift purchasing done online compared to other formats," commented Whitfield. "As more purchasers reach this threshold, the percent reporting spending a larger share than the previous year will slow," she continued.

Internet Radio Audience Grows From Holiday Lows
MeasureCast, Inc., the first company to provide Internet radio broadcasters with next-day audience size and demographics reports, announced today that the Internet radio listening audience continued to grow during the second week of January. Meanwhile, New York talk radio station WABC-AM held on to the top spot in the MeasureCast Internet Radio Top 25™ ranking for the week of January 8.

Internet radio listening for the week of January 8 was up over the first week of January. Overall, the Total Time Spent Listening (TTSL) for this week's top 25 stations grew 46 percent over last week. This week's top five stations - ranked in exactly the same order as they were the week of January 1 -- saw a combined increase in TTSL of 38 percent week over week. Internet-only broadcaster Radio Margaritaville saw its TTSL increase 57 percent over the previous week, while WABC-AM experienced a 42 percent increase.

Other facts from this week's MeasureCast reporting for 474 stations include:

- The top formats in Internet radio were Talk Radio, followed by News/Talk, Classic Rock and Contemporary Hit Radio/Top 40
- 15 percent of all on-line listening occurred between midnight and 6:00 a.m. PST
- 33 percent of listeners were located in the West, while 32 percent were in the South
- 23 percent of listeners were from outside the United States, primarily from Canada, the United Kingdom, and Japan.
- While Monday, January 8 saw the greatest number of on-line listeners, Thursday, January 11 saw people tuning in to Internet radio longer than any other day of the week.
- 27 percent of Internet radio listeners were aged 25-34, followed by 35-44 year olds (25 percent), 18-24 year olds (19 percent), and 45-54 year olds (17 percent).

News Tidbits (appears every day on the front page)
- The Internet is being partially blamed for the power problems in California that has caused rolling blackouts to occur almost daily over the past week. According to USA Today, "Experts estimate that Internet-related computers, telecommunications and networking devices siphon 3% to 8% of the nation's electricity. The worst culprit: "server farms" that house rows of computers that run Web sites and other business operations. One server farm can hog 10 megawatts — enough electricity for 10,000 homes."

Return to January 2001 News Archive