You’ve tried to stoke your Internet sales, but despite your best efforts, they just aren’t growing all that much. And you know e-commerce in general is more robust than it’s been in years. What are you doing wrong?
Most probably, nothing. Despite all the hoopla about online shopping, a substantial portion of American consumers just aren’t ready to buy online, reports a new study by Forrester Research. Twenty-eight percent of online shoppers — meaning 50% of all North American households — haven’t actually bought anything over the Web. There are three main reasons for this, according to Forrester analyst Carrie Johnson:
- Credit-card security fears
Credit-card fraud isn’t nearly the major problem it’s been cracked up to be: It accounted for just 5.4% of all Internet fraud complaints in 2004. But it is the top sticking point for consumers — 62% of online shopping holdouts (including a majority of all demographic segments except males younger than 35) say they don’t want to give out their personal financial information online.
- Preference for offline experiences
As 55% of online nonbuyers make abundantly clear, there’s no substitute for touching things and seeing them in person before purchasing them. Twenty-four percent of Forrester’s survey respondents prefer to research products and services online and buy them in a brick-and-mortar store.
- High shipping costs
Although nearly 60% of online merchants offered free shipping this past holiday season, the high cost of delivery apparently continues to deter online nonbuyers, 22% of whom cite this as the reason for not making Web purchases.
E-merchants shouldn’t despair just yet, says Johnson. “Although consumers point to specific issues like credit-card security and shipping fees, the bottom line is that they just aren’t comfortable with technology,” she notes in the Forrester report. But, she points out, during the next 10 years remaining a Luddite will be nearly impossible. “Consumers will find themselves immersed in technology everywhere they go, forcing them to warm up to the idea that technology can improve their lives….The average U.S. citizen will find herself interacting with the Web in the physical world every day, ultimately translating into home Web and technology use as well.” Besides, the need for a hard-to-find item, an out-of-state or overseas purchase, or a customized product will eventually force even diehards to shop on the Internet.
In the meantime, merchants can do their bit to sway consumer attitudes. Johnson recommends winning the trust of technophobes by playing up site elements such as help features, control of personal data, and speed, and by clearly addressing security and privacy concerns.
It will also pay to court a hitherto ignored shopping segment: young females. Companies mistakenly continue to target males 18-35 years old, already the most enthusiastic online shopping segment, whereas they could be winning over young females who will soon control most of the household spending. “By launching teen microsites with incentives to shop online,” Johnson says, “retailers can draw these shoppers in, appeal to their slim wallets, and convince them of the benefits of shopping online over time.”