Customers turn to the internet to buy services

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By: Wise Marketer Staff |

Posted on June 3, 2002

Consumers are increasingly turning to the internet to research and initiate transactions with service-based businesses, according to a new study from Respond Networks.

The research demonstrates that companies and consumers are increasingly using the internet to buy and sell services. While several research firms and companies have analysed consumer behaviour with respect to products, the report presents an detailed analysis of service-based activity on the internet. Respond's analysis is drawn from its network of buyers, sellers and business partners which, added together, are able to reach nearly 50% of the internet audience.

Key findings
Consumers have long used the internet to purchase commodity items such as books, CDs and familiar retail products. However, according to Respond, they have only recently embraced it for transactions that require a high level of personal service. The research estimates that services industries represent 66% of the USA's total gross domestic product (more than US$2.5 trillion in the year 2000, according to the US Department of Commerce). The report highlights the internet's emergence as a powerful channel for service providers to use to reach new customers and capitalise on the vast services market opportunity. The report's key findings include:

  • Requests for services (as opposed to hard goods) now account for around 60% of all online requests for quotes (RFQs);
  • The number of requests for services has increased by 180% in the past 14 months;
  • More than 15% of all consumers looking for products and services on the web fall outside of any metropolitan area, showing the wide reach of the internet and its ability to eliminate borders and geography as access barriers.
  • Hotels & motels, car insurance and property rentals are the most frequently requested services, accounting for more than 13% of all requests;
  • Of the fifty most often requested service categories, only three are technology-related: internet service providers (ISPs), DSL providers, and pagers;
  • Ten of the top fifty service categories are travel-related, reflecting the huge growth in online travel services in recent years;
  • Six of the top fifty service categories are insurance-related, reflecting widespread acceptance and trust in seeking insurance providers and rates online;
  • Some of the more surprising categories to reach the top fifty include massage therapy, dog breeders, tattooing and piercing, event and wedding planners, divorce lawyers and dentists;

Lyn Chitow Oakes, CEO of Respond, says, "The internet is a great resource for consumers to research and purchase specific types of services, from insurance and mortgage brokers, to travel and real estate agents. It presents a great opportunity for smaller, regionalised businesses to market and sell their services. As consumers continue to turn to the web as a primary channel for buying services, we expect that this trend will continue to grow."

Respond Networks develops and provides request-driven lead management solutions, facilitating online consumer requests since 1998. In that time, more than one million requests and three million responses have been generated by the Respond Network, which includes more than 50 partners including InfoSpace, Lycos, Martindale-Hubbell, Qwest, VeriSign and Verizon.

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