Price Holds Back Non-Shoppers

While online commerce continues to grow in popularity among the 60-plus-million online population, a study from Jupiter Communications and NFO Interactive shows that those who look but don’t buy (browsers) remain hesitant about making purchases online. The study shows that browsers cite price, not payment security, as a primary concern.

The study showed a significant 35 percent of the online population did purchase a product or service in the last year and were very satisfied with their shopping experience. In fact, almost 95 percent of those buyers plan to shop more online in coming months. However, browsers and “non-shoppers” (those who neither browse nor shop online), were less likely to make an initial purchase soon. A total of 45 percent of browsers and 84 percent of non-shoppers said they were unlikely to begin buying online in the next year.

The study shows that one of the main reasons for the reluctance of the nonbuying population to purchase products or services online is the barrier of price. More than 77 percent of online browsers and 64 percent of non-shoppers state that greater discounts will spark online buying behavior. Among the browser population, lower prices emerge as the single most important “change driver” to spur purchasing.

“Aggressive pricing on select items will get customers in the door, and is a crucial step to help win the next phase of the customer acquisition battle,” said Evan Cohen, group director, Data Research at Jupiter. “Vendors shouldn’t slash prices across the board, but strategic discounting will help commerce players to convert non-buyers into online purchasers.”

The consumers studied ranked “researching products and services” as the third most popular online activity. In many cases, online consumers have indicated browsing for information about products that have historically not had strong sales success online, including cars (48.7 percent), housewares (36.2 percent), clothing (35.9 percent), and consumer electronics (35.8 percent).

The study also found that online user demographics provide a rich environment for potential widespread online shopping. The demographics of the online population are more attractive than the national average in a variety of metrics that are important to retailers. For instance, 43.1 percent of online US households earn over $60,000 per year, while just 23.6 percent of total US households earn more than that amount.

In fact, 65 percent of all online households maintain incomes that exceed $100,000. The Jupiter/NFO study also shows near parity in the number of women online (45 percent) and a disproportional percent of online households with children (41 percent) compared with the national average (35 percent).