The USC Annenberg Center for the Digital Future examined online shopping and consumer behavior in its 2014 Digital Future Report. You’d think that by now everyone is shopping online, but the report offers surprises amongst the obvious. Younger shoppers are impatient. Prices still matter. People don’t like sales tax. But showrooming helps retailers as much as it hurts.
The report offers data from 2000 to 2013, and divides its respondents into three main categories, and sorts their responses accordingly: those who don’t use the Internet, Internet users who shop online, and Internet users who don’t shop online.
That’s Still Just a C+
In 2013, 79 percent of Internet users said that they made online purchases. That’s the highest number in the study’s history, rising from a low of 40 percent in 2002. That group of online shoppers reported spending an average of $101 per month online, another high for the study and a noteworthy increase from $88 in 2012. Clothes were the online purchase reported most frequently, at 68 percent; more than 50 percent of online shoppers also bought gifts, books, travel and electronics/appliances.
Asked what could make them spend more, 64 percent of online shoppers said lower prices. That was the most popular response, though most would surely say the same about brick and mortar shopping, too. More than 60 percent also cited faster delivery, cheaper shipping, and no sales tax. Age was a significant factor in answering that question: 100 percent of those under 18 wanted faster shipping, compared to only 44 percent of shoppers 55 and older. These younger buyers were also significantly more interested in having more choices, more user reviews, and avoiding sales tax than were those over 18.
People Still Worry About Security and Privacy
In all, non-users are more concerned about the security of their online shopping data than Internet users, and users who don’t shop online are more concerned about it than those who do.
Only 7 percent of those surveyed had no fears at all for their safety of their personal data while shopping online, while 42 percent had some concern, and 52 percent were very/extremely concerned. Internet non-users were much more likely to be very or extremely concerned about the safety of buying online: 43 percent of non-users said they were very concerned, compared to only 22 percent of users.
In 2001, the number of people who said they’d be somewhat concerned about credit card security while shopping online has grown from 23 percent in 2001 to 44 percent in 2013. In a way, though, that’s good news: as it grows, the number of people very/extremely concerned falls. For 2013, that number is down to 47 percent, from 71 percent in 2001. It was slightly lower in 2012, though—the increase perhaps a temporary response to high-profile data breaches like those at Target and Home Depot.
E-Tail vs. Retail
Nine percent of online shoppers report a large reduction in brick-and mortar shopping; another 51 percent admit to some level of reduction. But 39 percent of online shoppers say that they’re still spending as much in stores as they ever did.
One practice unpopular with retailers is showrooming, browsing products in a store only to inform a subsequent online purchase. Over two-thirds of 2013 Internet shoppers, 67 percent, admitted sometimes doing so, while 10 percent said they do it regularly. Of these two groups, 18 percent admitted to purchasing the item online even before leaving the store. And of that group, only 24 percent bought from the retail store’s online site, while 76 percent purchased from another online vendor.
In a bit of good news for retailers, though, reverse showrooming is a real phenomenon, too. The same 67 percent of online shoppers said they sometimes research items online before buying in a store, while 16 percent report doing so often.
What the Survey Missed
Online vendors spend a lot of money on improving their site loading times, because the longer you have to wait, the less likely you are to make it all the way to checkout. One slow-loading site is just an annoyance, but when they’re all slow, it’s a problem. If you’ve been frustrated with your online shopping experience, maybe you’re the one who needs to make the upgrade. Shop for a faster plan and all your shopping will get faster.
Photo By Fosforix/Flikr In addition to writing for this blog, I spend a lot of time writing for the advertising world, particularly online advertising. That means I’ve probably unintentionally helped creep you out before as you surf the web, thanks to an advertising practice known as retargeting.
Even though retargeting is extremely common in online advertising, this particular danger was recently discussed at AdAge, it seemed like something that those outside the advertising industry should know about.
We’re Not Trying to Be Scrooges
Here’s how retargeting works. You visit a website to learn about a product, but you don’t buy it. Google keeps track of the sites you visit, and often shares that information with advertisers who are eager to sell you the items you search for. Now we know the exact items you’re interested in, which means we can make the ads on all the sites you visit more relevant. So in case you weren’t aware, no, it’s not a coincidence when you see ads for products you were just looking at.
Retargeting is in advertisers’ best interests, and advertisers like to think it helps you, too. But what if the holiday gift items you’ve been shopping for appear repeatedly in ads when your family uses your shared computer? They may get wise to you. Sorry about that.
We’re Not the Only Ones to Blame
In addition to the advertising problem, most browsers also now offer auto complete and history features, which can give away the sites you visit. The more frequently you visit those sites, the more likely the browser is to suggest them. So when your loved one types “T” to go to The Local Paper’s website, your browser may just reveal that you’ve been spending time on Tiffany’s site.
What You Can Do About It
Fortunately, there are a couple easy ways to preserve your holiday surprises. The first is to do all your gift-related searching using your browser’s privacy mode. Doing so will make all the sites you visit during that session invisible to anyone else using that computer. Here’s an example of how it works in Firefox, though every browser now offers a similar feature.
It’s Probably Not Too Late
If you forgot to enable privacy mode, you can go back and clear your recent browser history after your shopping is done. But that leaves a sort of trail, as auto-complete won’t work at all, and users will have to re-enter passwords on sites they frequent. And that can look suspicious to the tech-savvy, so if you get called on it, just tell the truth: “Honey, Chrome/Firefox/Internet Explorer/Safari wanted to spoil your Christmas. Can’t let that happen.”
What’s On My Wish List
No one likes ads, but if anything you’ve read here helps you out during the holidays, do me a solid and just click on one ad, any ad, and we’ll call it even.
Something that should be on everyone’s wish list is a faster Internet connection. No matter how hard someone is to shop for, shopping gets a little easier when it gets a little faster.
Image by Daniel Foster/Flickr There’s no doubt online commerce has changed the way we buy and sell, and thanks to the innovative thinkers behind several new ecommerce startups the landscape of retail therapy continues to evolve and change to provide more options, more convenience and better service. Both merchants and shoppers are benefitting from products that make it easier to connect people to the things they need and love.
Here are four up-and-coming commerce startups making a big splash in the world of buying and selling.
Situating themselves as the ecommerce website builder of choice for small and mid-sized businesses, Bigcommerce has been making news as the go-to company for increasing retail sales and service online. For stores hoping to differentiate themselves from big online marketplaces like Amazon, Bigcommerce provides everything from website design and secure shopping carts to experienced marketing gurus who help launch both brand-new startups and seasoned veterans into new levels of ecommerce success.
Featuring complete integration with eBay, Bigcommerce stands out in the world of ecommerce business support for its unique understanding of the online marketplace. Highlights of their store designs include the ability to offer drop shipping, pre-ordering and back-ordering and even on-demand shopping comparisons to ensure shoppers are getting exactly what they want for the price they want to pay.
As of March, the Australian-based company had raised $75 million and with a client base of more than 50,000 merchants in over 130 countries, Bigcommerce feels ready to take on Amazon when it comes to providing online retail services to smaller retailers.
What makes Bigcommerce different is the chance for small businesses to build brand recognition and a loyal customer base, which doesn’t really happen on powerhouse sites like Amazon. Bigcommerce may be championing the little guy, but they certainly seem to be growing into a force to be reckoned with.
Their slogan, “Subscribe is the new shop,” says it all. OrderGroove is a fast-growing startup that offers subscription commerce solutions to retailers across the web. Subscription services have become a staple of modern commerce and can be the key to brand loyalty and sales growth. The goal of OrderGroove’s services is to help companies convert casual shoppers into loyal subscribers who make more frequent purchases and spend more annually.
Not only does this serve retailers and other online merchants, but it also makes life simpler for the consumers who benefit from the convenience of subscription services that help them keep their cupboards (and closets) stocked for less. The experts at OrderGroove have the knowledge and technology needed to ensure customers deliver a subscription program that works.
And retailers are noticing because OrderGroove currently powers over 75 brands including L’Oreal, Lot18 and Jockey. The company, which started in 2008, saw tremendous growth from 2011 to 2012, tripling its client roster and experiencing 430% revenue growth year-over-year. In November 2012, OrderGroove raised $7 million from Fung Capital USA and additional investors including former Walmart.com CEO Raul Vazquez.
Those investments seem to be paying off. OrderGroove was recently recognized for the Most Innovative Use of Tokenization at the 2014 Paymetric Customer Innovation Awards, and continues to add to its list of clients.
Being a musician is often more of a side project than the way to pay the bills, but passionate musicians still want to be able to upgrade equipment, collect rare instruments or just change it up every once in a while – without breaking the bank. That’s something online retailer Reverb understands. This unique marketplace connects sellers and buyers in a specialized community where musicians can get more for items they sell and pay less for items they purchase.
In addition to being exclusive to the world of music, Reverb understands that many instruments and the musicians who play them have a story to tell. One of Reverb’s advantages over other sites like eBay is the time they take to really cultivate and tell the story rather than just posting a generic description along with a price tag.
And speaking of price tags, Reverb’s transaction fee is only 3.5% compared to 10% on eBay and 15% on Amazon. But even with Reverb taking a much lower cut, the site still did over $1 million in sales on just 3,500 transactions, according to a cover story in “Music Inc.”
Those kinds of numbers have started grabbing attention. In late 2013, the startup gained the attention of some celebrity admirers who liked what they saw so much they decided to invest. Rick Nielsen of Cheap Trick joined up with a cadre of other investors, including David Lowery of Camper van Beethoven fame, to the tune of $2.3 million.
Affirm is attempting to fill some of the credit holes left in the wake of the recession with their flexible pay-over-time options that don’t rely on traditional credit. In fact, Affirm isn’t a credit card – it’s a way to buy that new TV or laptop and spread out the payments without slapping down plastic or getting high interest in-store credit.
Founded by one of the minds behind PayPal, it’s not surprising that CEO Max Levchin has come up with another way to cchange the face of finance. Affirm’s main product is Split Pay. Split Pay lets shoppers divide their online purchase into three monthly payments. Affirm pays for purchases immediately and bills customers for the balance in accord with the product selected.
To use Affirm all consumers need to do is click the Affirm button at checkout, enter identifying information and Affirm will make an instant approval decision. Affirm doesn’t use FICO credit scores, instead they calculate risk based on a range of factors that include the cost of items being purchased and personal data gleaned from sources including social media.
The formula seems to be working, as the company has piqued the interest of investors, raising $45 million from venture capital films in the past year. By providing alternative ways for consumers to manage their cash flow and giving retailers more options, Affirm hopes to help commerce return to the days where trust and relationships were more important than credit scores.
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