OVERVIEW/DISCUSSION

In May 1999, Esearch sent out a third in a series of surveys on online buying habits. Of the nearly 1,000 respondents, nearly all (86%) indicated that they had made some sort of online monetary transaction (with a sample size of 1,000 the margin of error is +/- 3.5%). These findings show increased usage and momentum of the Internet for monetary transactions – in 1997 52% indicated they had made an online monetary transaction and in 1998, 70% indicated they had. Most respondents have made transactions for product/services with a full 96% of respondents indicating this type of monetary transaction.

The fear of the Internet being an unsecure purchasing medium seems to be waning. When asked if they’d be more likely to purchase online if the payment information was taken offline via a toll free number, only 20% of respondents indicated a system like this would be appealing. One-third of this 20% group had not made an online purchase.

While the Internet is the ultimate international medium, only 18% of respondents indicated they had made a purchase from a site abroad. A full 43% indicated they would purchase from a site abroad but hadn’t yet done so. And, 39% indicated they wouldn’t purchase from a site abroad.

Internet shoppers have indicated a level of price sensitivity and the type of products they are likely to shop for online. Most (56%) expect a 20-30% discount over standard retail when buying a product (book/toy) with a $30 retail value. Only 4% of respondents indicated they wouldn’t shop for this type of item online. The discount expectations are similar with higher priced items (camera with a $500 retail value) with 52% indicating they would expect a 20-30% discount over standard retail. More people (14%), however, wouldn’t shop for this type of item online. When asked about shopping for an insurance policy with a retail value of $1,000 – only 37% expected the 20-30% discount with a full 31% indicating they wouldn’t shop for this type of item online.

Product returns don’t seem to be a big issue with online shoppers. 26% of respondents had attempted a return with only 2% indicating they were not successful. Of those who have returned a product, 74% indicated it was quick and easy. 6% indicated their return was impossible and they ultimately kept the item.

When asked if they’d ever attempted an online purchase but didn’t complete the transaction for a specific reason, most had. 14% had abandoned a transaction because they couldn’t find the check out area; 12% had abandoned a transaction because they couldn’t find a return policy; 16% had abandoned a transaction because the site didn’t take credit cards; 20% had abandoned a transaction because the site didn’t look professional; and 41% had abandoned a transaction because the site was too slow.

The most important attribute in securing online purchases is a clear and prominently displayed security policy (50%). This is followed by the ability to pay with credit cards (20%) and an easy to find returns policy (11%).

QUESTIONNAIRE

1. Have you conducted a monetary transaction on-line (i.e. paying a bill, banking, purchasing a product or service, gaming)?
   
   • 86% Yes
   • 14% No
     
     
2. If yes, have you (check all that apply):
   
   • 28% paid a bill (that would otherwise have been paid via snail-mail),
   • 37% utilized on-line banking services,
   • 17% used an online brokerage service,
   • 96% purchased a product or service
   • 43% purchased via a web auction
   • 11% played a game (which required/resulted in a monetary transaction)
     
     
3. Would you be more likely to purchase online (place orders for products/services) if the payment information was taken offline (via a toll free number where you entered your financial information by voice and/or touch-tone):
   • 20% yes, a system like that would be very appealing and would likely increase my online purchases
   • 80% no, this wouldn’t have an affect on my online buying habits
     
     
4. Would you consider making online purchases through web sites located abroad (not in your own country)?
   • 18% yes, I’ve made online purchases from sites that are abroad
   • 43% yes, but I’ve haven’t made any purchases from international sites
   • 39% no, I wouldn’t consider purchasing from sites that are abroad
     
     
5. Presuming you were to shop online and were looking for a book or toy with a retail value of US$30.00. What would expect/be willing to pay for this book through an online transaction, as opposed to traditional retail?
   
   • 10% $30 (I don’t expect discounts when shopping online)
   • 18% $27-$29.00 (I expect about a 10% discount when shopping online)
   • 36% $24-$27.00 (I expect about a 20% discount when shopping online)
   • 20% $20-$24.00 (I expect a 30% discount when shopping online)
   • 11% <$20 (Things must be greatly discounted for me to purchase online)
   • 4% Price isn’t a consideration, I wouldn’t shop for this type of item online.
     
     
6. Now presume you were to shop online for a camera with a retail value of US$500.00. What would expect/be willing to pay for this camera through an online transaction, as opposed to traditional retail?
   
   • 6% $500 (I don’t expect discounts when shopping online)
   • 15% $450-$500.00 (I expect about a 10% discount when shopping online)
   • 30% $400-$449.00 (I expect about a 20% discount when shopping online)
   • 22% $350-$399.00 (I expect a 30% discount when shopping online)
   • 13% <$350 (Things must be greatly discounted for me to purchase online)
   • 14% Price isn’t a consideration, I wouldn’t shop for this type of item online.
     
     
7. Now presume you were to shop online for automobile insurance with a retail value of US$1,000.00. What would expect/be willing to pay for this insurance through an online transaction, as opposed to working with a traditional agency?
   
   • 8% $1,000 (I don’t expect discounts when shopping online)
   • 14% $900-$999.00 (I expect about a 10% discount when shopping online)
   • 23% $800-$899.00 (I expect about a 20% discount when shopping online)
   • 14% $700-$799.00 (I expect a 30% discount when shopping online)
   • 10% <$700 (Things must be greatly discounted for me to purchase online)
   • 31% Price isn’t a consideration, I wouldn’t shop for this type of item online.
     
     
8. Have you ever returned (or tried to return) an online purchase?
   
   • 24% yes, I successfully returned a purchase
   • 2% yes, I tried to make a return but was not successful
   • 74% no, I haven’t made or tried a return
     
     
9. If you’ve made (or attempted) a return of an online purchase, how did the experience compare to returning products from a retail location (please select the one most appropriate answer)?
   
   • 74% it was quick and easy
   • 16% it was difficult determining the return process
   • 1% the company didn’t have a return policy
   • 6% it was impossible and I ultimately kept the item
     
     
10. Have you ever attempted to make an on-line purchase but didn’t complete the transactions for one (or more) of the following reasons (please check all that apply):
    
    • 14% Couldn’t find the check out area
    • 12% Couldn’t find a return policy
    • 16% The site didn’t take credit cards
    • 20% The web page looked unprofessional
    • 41% The web page was too slow
    • 44% No, I haven’t encountered any of these
      
      
11. If you were to shop online, what is the one most important attribute that a site must have to secure your business (check only one):
    
    • 7% Prominently displayed check out area on each page
    • 11% Easy to find returns policy
    • 50% A clear and prominently displayed security policy
    • 20% The ability to pay with a credit card
    • 6% A professional looking web page
    • 6% A relatively fast loading web page
      
      
12. IF YOU HAVEN’T purchased anything on-line, why not (check all that apply)?
    
    • 17% Haven’t "shopped" on-line
    • 0% Haven’t been solicited or visited a site where it’s available
    • 47% Don’t trust internet security
    • 28% Don’t trust or know the companies making the offer
    • 34% Not comfortable with returns issues
    • 22% Don’t have a credit card
    • 21% Not my style (I don’t buy catalog)
    • 11% Takes too much time
    • 16% Poor resolution of graphics (can’t see what I’m buying)
    • 24% Other

GENERAL CONCLUSIONS

The Internet is gaining momentum and acceptance as a medium for monetary transactions. Fear of the Internet being an unsecure purchasing medium is waning although having a clear and prominently displayed security policy is the number one attribute a sight must have to secure business (50% of respondents indicated this was the most important site attribute for securing their business).

Shoppers are indicating price sensitivity for items that can be purchased through standard retail with most expecting a 20-30% discount. As price and item uniqueness goes up, discount expectations go down – and so does the number of people who would consider making the purchase online.

Purchase returns don’t seem to be a big issue with Internet shoppers. 24% of respondents had successfully made a return and 74% of these rated the experience as quick and easy. Only 2% of respondents had attempted a return but were not successful. 12% of respondents had abandoned an online purchase because they couldn’t find a return policy.

About Esearch

Esearch is an Internet market research firm specializing in data collection via email. The company has a database of thousands of individuals willing to participate in on-line surveys, including complete demographic information on all panelists. Individuals interested in becoming an Esearch panelist or companies interested in on-line research should visit www.esearch.com or email esearch@esearch.com.