Consumers say they are willing to spend more during the holiday shopping season but only if retailers offer free shipping and exclusive online incentives, according to the 'Consumer Internet Barometer', jointly produced by The Conference Board and TNS.
More than 90% of consumers said free shipping would serve as an incentive to spend more online during the holiday season, and more than 65% said that special offers or deals not available in stores would boost their online spending. Half of holiday shoppers said they would be willing to spend more if the merchandise offered was available exclusively online. An equal proportion said that the ability to return items to a store would drive them to shop online more often. Finally, 35% said that free return postage would increase their online holiday purchases.
According to Lynn Franco, director of The Conference Board's consumer research centre, "Consumers are clearly willing to increase their online holiday purchases, but only if retailers are willing to offer holiday bargains online that are better than - or different from - those they are offering in stores. If retailers want to increase their share of the online market then free shipping, exclusivity, and bargains are sure ways to get consumers to order more online."
Spending online vs. offline
When it comes to holiday spending, consumers said they were saving their bigger purchases for in-store shopping. Only 5% of online households planned to spend more than US$500 online during the 2006 holiday season, while 30% planned to spend less than US$100 online.
Conversely, 22% of online households planned to spend more than US$500 in stores, while 16% planned to spend less than US$100 in stores. And, for the 2006 holiday season, books, movies, and clothing were at the top of consumers' online shopping lists.
Online customer types
The Consumer Internet Barometer segments respondents into five self-selected online shopping categories (those being: die-hard, bargain hunter, traditional shopper, last-resort shopper, and hurried shopper).
- Die-hard shoppers
The number of shoppers who prefer online shopping to store shopping has increased overall during the past three years. Die-hard shoppers accounted for 17% of consumers who had made an online purchase in the previous three months, up from 12% three years before.
- Bargain hunters
Bargain hunters remain the most common type of online shopper, as more than 40% of online shoppers are self-proclaimed bargain hunters. Bargain hunters were, however, much more common three years earlier when approximately 45% of consumers classified themselves as such.
- Traditional shoppers
Traditional shoppers, who occasionally shop online but prefer the familiarity of bricks-and-mortar stores, account for about 16% of online shoppers, and are the third most common type of internet shopper.
- Last-resort shoppers
Last-resort shoppers, who buy online only when products are unavailable in stores, rank fourth on the list and represent 15% of online shoppers.
- Hurried shoppers
Hurried shoppers are those who buy online only when time is limited. This group has decreased in size and represents only 11% of online shoppers.
Gender gap reduced
In the past, bargain hunters were more likely to be men than women, but now almost as many women as men are scouring the internet for bargains. Some 40% of women and 43% of men are self-proclaimed bargain hunters, compared with less than 40% of women and nearly 50% of men three years before.
However, among the internet die-hards, traditional shoppers, and last-resort shoppers, very little behavioural difference was noted between the men and women.
For both genders, the most frustrating aspects of shopping online were: shipping charges, not being able to physically handle merchandise, and having to give out credit card information.