Persuading Shoppers to Shop More
The comScore study asked shoppers a question that many merchants would like to ask their customers: what factors would persuade shoppers to shop more online?
Although the answers depend partially on how experienced a user is, the relative importance of the factors tended to be the same across all users. (See Figure 5)
Heading the list are two perennial favorites: protection of credit card information against fraud, and reasonable shipping and handling fees. A closely related rationale, "assurance of the privacy of my personal information," is the fourth biggest reason. In short, online shoppers need to feel their data will be kept confidential.
As to why shoppers shop online, most survey respondents listed "convenience" as the main reason. Note that the following three reasons, "compare price," "window shop" and "lower price," are essentially the same thing: Online shoppers are aggressively looking for a good deal.
Surprisingly, more than 20 percent of respondents say they shop online "because it's more fun." If this figure gets any bigger, it will surely strike fear into the hearts of many mall-based retailers.
Big vs. Small?
The analysts from comScore discussed whether the tendency of shoppers to visit more sites prior to purchase is more beneficial to the small or large retailer.
"One argument is that any time the primary consideration is price, then scale is critical — look at Wal-Mart as the perfect example," Mudd says. "So maybe long term the larger one wins."
However, "if consumers continue to increase the use of search engines, whether Web searches or product search engines, that trend opens up the marketplace to those who specialize in one product to deliver a price advantage," he adds.
The bigger players are getting better at selling online, Mudd says.
"The bigger, multi-channel retailers have sort of woken up to the importance of marketing to consumers online in a thoughtful way, and as a result have seen substantial increases in the past two years," Mudd observes. In particular, the 2004 holiday season was "the first one where they were very consistently executing in terms of their online selling practices."
Whether this trend will continue at the expense of smaller retailers is hard to say, Mudd notes.
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| Figure 5 |
Beyond Price
Although some of the data in the comScore study points to price as the key factor driving online shopping, Mudd notes that there are larger factors involved. "I don't want the conclusion from this [study] to be that the Web will be a price-only game."
While it will become "more and more important" in certain categories to be price competitive, "there are so many other attributes that consumers care about when they search for a product."
One of these is trust — whether the e-tailer will deliver a high quality product, reliably, while protecting sensitive shopper data. Additionally "the brand equity of the retailer," is key, Mudd says. This seems to favor well-known brands like Circuit City over lesser-known sellers.
Shipping costs are also a critical factor. "In every survey that we ask consumers about what holds them back online, shipping price is always one of the top issues, if not number one," he says.
"A lot of a consumers go into the shopping process thinking 'the first thing I need to find is a way to get this shipped to me for free.'" Many shoppers "are willing to make a compromise on the price of the product in return for free shipping," says Mudd.
James Maguire is a contributor to ECommerce-Guide.com. His column appears every Monday.
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