Forrester study says users ready for e-commerce

By Published on .

New data from Forrester Research predict a wave of lower-income consumers will be "e-commerce ready" by the end of the year, but they won't all be ready to shop online.

For consumer marketers, the study has important implications. Certain segments, such as travel and finance, should be investing in electronic commerce efforts now, while mass marketers should be focusing more on research and product information on their Web sites, said Forrester.


The March study, the first one to be released from Forrester's new Technographics service, reveals that while only 5% of North Americans now make purchases online, 10% will conduct transactions over the Internet by yearend.

Forrester's Technographics service segments consumers by their attitudes, incomes and approaches to using new technology. For example, high-income, career-oriented technology optimists are called "fast forwards," while low-income, family-oriented technology optimists are called "digital hopefuls."

"This is one of the first studies of its size that actually uses attitudes toward and familiarity with technology as a key segmenting device," said Rishad Tobaccowala, president of Leo Burnett Co.'s Giant Step interactive agency, a Forrester client who has been briefed on the Technographics results.

"What this [study] says is how you consume and what your reaction to the medium is are almost as important as what you think of the product," added Mr. Tobaccowala.

Based on a mail survey of 120,000 respondents in November and December, conducted with researcher NPD Group, Forrester found that not only will the percentage of online shoppers increase this year, but their demographics will shift from elite to mainstream. The survey had a margin of error of 1%.


By the end of the year, 50% of North American households will own PCs, up from 43% in 1997, and 29% will have an online connection, compared with 25% in 1997. Key electronic commerce issues for marketers are security, advertising and Web site development concerns, according to the study.

"If you are an airline or investment company, our study has clear implications that you have to move now to get Internet commerce ready," said Josh Bernoff, principal analyst of new media research at Forrester.

The study found that airline tickets, which currently rank third behind software and books for online purchases, rank No. 1 on the list of desired products among consumers who have not purchased online but say they want to.

However, while certain industry segments should be moving aggressively into e-commerce, mass marketers such as Kmart Corp. and Procter & Gamble Co. don't need to rush into providing transactional capabilities on their sites, according to Forrester.

"While the study shows a surge of new lower-income online users, people will not start doing transactions immediately," said Mr. Bernoff.

He said package goods and other mass marketers should focus on making research and product comparison information easier to access on the Web. The findings are consistent with Advertising Age's 1997 Interactive Media Study (AA, Oct. 6), which found 90.5% of Web users look for product information on a company's home page, while only 34.5% shop for products.

The main obstacle to electronic commerce is still security, the Forrester study found. Forty-nine percent of prospective Internet shoppers said fears about credit card transactions keep them from shopping online.

"Our belief is that someone [for example, credit card companies] must step out and put out advertising and public relations about how the Internet is a safe place to do business," said Mr. Bernoff.

He added that while MasterCard International and Visa USA are now working on security standards with the SET (secure electronic transactions) protocol, "There is no visible, $10 million campaign saying it is safe to conduct business on the Internet. There is an opening for a financial services company to come up with a brand that represents Internet safety and brand sites," he said.


Lynn Carpenter, director of Web site marketing for Netscape Communications Corp., said Netscape last week had talks with the Better Business Bureau about working with the organization to help it explore measures relating to security and credibility of companies on the Internet.

As to what Netscape is doing to market security awareness, "My marketing challenge is to create an awareness campaign around the individual services on Marketplace," she said. She added that based on a November survey of its Netcenter members, 57% had made a purchase over the Web with a credit card.

Copyright March 1998, Crain Communications Inc.

Most Popular
In this article: