Friday, January 26, 2001

Online Retail Still Entices Customers Despite Turbulence

In the midst of dying dot-coms and a bearish stock market, consumers continue to shop online, largely unfettered by the market woes that face many online retailers. According to a new Technographics® Report from Forrester Research, Inc. (Nasdaq: FORR), shoppers won't abandon online retail because eCommerce gives consumers power -- the ability to perform or act effectively. The power offered by the Web includes three main elements: convenience, confidence, and control.

"Rumors surrounding the demise of eCommerce have been greatly exaggerated -- in fact, they are dead wrong," according to Christopher M. Kelley, analyst at Forrester Research. "While the number of tech-related pink slips increases, consumers continue to flock to the Net without regard for the pain faced by online retailers. Ninety-eight percent of Web buyers say they will continue to shop online and 65% won't alter their spending at all."

Shoppers' attitudes about eCommerce and their online buying behaviors underscore how fundamental convenience is to the ongoing success of the channel. Time-deprived consumers don't have enough free time to fight for a parking space or wait in line to make a purchase. Rather than searching the aisles for a lawn mower at the neighborhood Sears, it takes seconds to type "lawn mower" in the search box at sears.com. This convenience led 52% of Web buyers to use the search function on a retailer's site.

However, convenience alone is not enough to sustain eCommerce. Online retail will remain popular because the Web has given consumers confidence, increasing the power that consumers have at their disposal. Forrester found that 65% of Web buyers who spent more than $100 on their most recent purchase comparison-shopped before they bought. The Web aids this process -- price comparison and retailer-rating tools are a click away for every consumer.

Emboldened by the convenience and confidence consumers have when shopping online, Web buyers have taken their power to another level -- they exert control over their online shopping. The control consumers wield takes various forms.

Consumers use functions like a site's customer support and tracking to maintain control of their entire purchase process -- 14% of Web buyers did so during their most recent online purchase. Consumers also expect companies to give them control of their personal information -- 60% of Web buyers want the government to ensure that consumers can determine how the collected information is used.

For the Report "Why eCommerce Won't Die," Forrester conducted a mail survey of 10,536 American and Canadian online households that are members of NPD's mail panel. We also drew from Forrester's Consumer Technographics 2000 North America Benchmark Study of 80,887 American and Canadian households.

Work Broadband Connections will Double
The number of people with access to broadband connectivity at work will more than double from 24 million in 2000 to 55 million by 2005, according to a new report released today by Jupiter Research, the worldwide authority on Internet commerce. Jupiter analysts, however, warn that companies offering broadband applications to the at-work audience will continue to face constraints even as overall corporate broadband penetration rates increase.

"Although the projected increase in at-work broadband access means a much larger audience and greater appeal to advertisers, employees with access to broadband are not a panacea. Jupiter foresees some enduring technology-related constraints because the average connectivity speed of individual users on shared networks will remain roughly equivalent to today," said Joe Laszlo, senior analyst at Jupiter Research. "Companies deploying broadband content and applications must tailor their offerings to fit the time of day and usage constraints that affect at-work audience behavior patterns. This means short-form content, unobtrusive applications and programs that will appeal to the at-work multi-tasker."

Key findings and forward-looking analysis from the new Jupiter Research Broadband & Wireless Report include:

- Jupiter analysts believe that the projected increase in the at-work broadband audience signals the rise of the "multimodal" consumer - the segment of the online audience that uses the Internet across several different access mediums, including dial-up at home, broadband at work and wireless devices in between. According to the report, companies targeting "multimodal" consumers now face the challenge of delivering the right content or application to the right device at the right time.

- Although only 57 percent of 42.7 million at-work Internet users currently make use of high-speed connectivity in the workplace, Jupiter analysts expect 87 percent of employees with Internet connectivity to be using a broadband connection by 2005 (U.S. only).

- As broadband usage in the workplace doubles, Jupiter analysts predict that at-work dial-up access will drop significantly from approximately 18.5 million individuals in 1999 to 8.1 million in 2005.

- Even though 24 million individuals access the Internet through broadband connections in the workplace, only 8.6 million use broadband in the home.

" As broadband penetrates the workplace and becomes a more mainstream technology in the home, expect to see a sizable overlap between the broadband home and work audiences," Laszlo said. "Companies that aim to reach the work broadband audience should consider how they can extend their services to remain useful beyond the workday - these are the companies that will come out on top."

At-Work Broadband Report Methodology & Definitions
The Jupiter "at-work" broadband projections study focused on the penetration of broadband access within U.S. companies. Jupiter defines broadband as Internet access speeds of at least 256 kbps, therefore excluding ISDN services. The definition also requires persistent connectivity, or access without substantial delay in dialing up or establishing a connection to an ISP. Jupiter derived the field of companies using broadband access from government and industry studies as well as consumer research. In order to develop base year estimates and build forecasts for at-work broadband users, Jupiter combined data from primary research, secondary data and qualitative analysis.

News Tidbits (appears every day on the front page)
- The battle between eToys and etoy is continuing. This time, in a surprise move, it is etoy that is suing eToys for trademark infringement. The complaint, filed by etoy, states that eToys is infringing on its trademark by closely imitating etoy for advertising and selling. The complaint further alleges that etoy, which deals in the art realm, has been in business online much longer than eToys. The two companies have been battling for years with many of the court actions brought by eToys against etoy.

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