Hooked on Net Shopping

SAN FRANCISCO (03/10/2000) - Once a consumer is drawn into shopping online for a particular product category, two thirds of their spending in that category will go to Internet companies, according to a recent study by ActivMedia Research.

Shoppers spent an average of US$312 per month online across ten retail categories, compared with offline monthly spending of only $144 for the same items, the study finds. Although only 14 percent of respondents said they had ever made an online investment, they spent the most money on the Web--a monthly average of $557, verses $223 offline.

Fully 83 percent of Net shoppers have made personal-interest purchases--groceries and health and beauty products--online, according to ActivMedia. Some 59 percent of online consumers have bought computer and electronics equipment over the Web.

The study's results are based on an online survey of 2248 Net users who have made at least one online purchase in the last year.

ActivMedia predicts online retail sales will double to $109 billion this year, up from $53 billion in 1999, with computers and electronics purchases accounting for 32 percent of the total. Travel and entertainment categories will garner an estimated 22 percent, or $11.6 billion, this year. Online retail sales will swell to two thirds of a trillion dollars by 2005, according to the study.

Although experienced Net shoppers are apt to spend more online than offline in particular categories, they are not necessarily spending at the same Net firms.

ActivMedia warns that while companies are busying themselves creating brand awareness and enticing shoppers to buy, the success of an online retail firm is driven by customer loyalty. A satisfied customer is not always a loyal one, says ActivMedia: To ensure repeat business from customers, Web firms must "delight" their customers. Only 20 percent of respondents reported having ever received such an emotional response from a Web site.

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