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October 1997
Understanding the Internet Consumer As the e-commerce world develops and matures, the profile
of the Internet buyer is beginning to take shape. However, little is known
about these this new market of online consumers; who they are; what and how
often they purchase on the Internet; how much they spend; what they wish to
purchase and what their attitudes are towards buying online. These questions,
that are now being raised by marketing and advertising managers are addressed
by the Australians NetBuyers Report which I recently authored. The results from the survey conducted in June by APT Strategies
of 650 internet users immediately after they had purchased a product or
service from various online merchants. Budding e-commerce enthusiasts should note that the buyer
profile closely follows that of the general user: a greater proportion of males
than females, aged between 25 and 44 years whose average income is $50,000 to
$70,000 per annum. One of the reasons for the incidence of makes is that they
tend to be drawn more into technical pursuits such as using computers and
being employed in Information Technology related areas. Increasingly, school children are exposed to the Internet
at an early age and students are well versed in the research potential of the
Internet by the time they reach University. Yet, the results show that it is
the older age groups that predominantly participate in e-commerce
activities. Why is this so? Younger Internet users are lower income
earners hence cannot afford to buy the mostly non-essential good sold through
the Internet. Software, travel services, computer equipment,
entertainment, books and CDs and are key items purchased over the Internet
which all require sufficient disposable income which younger people may be
lacking. Once into the late 20's,
income starts to creep over $40,000 per annum, especially for those with
tertiary qualifications, and once into the thirties it reaches over $50,000
and beyond. Many of these higher earners are very busy, working long
hours to earn their salaries, and playing hard after work. These Internet
users are "cash rich, time poor" and are looking for better ways of
doing things, including the sometimes mundane activity of shopping. The convenience of the Web draws . Cash rich, time poor. Netbuyers The report highlighted convenience as being the
significant reason that Netbuyers purchase goods online. It's the convenience of finding
information on the goods and services through a Web site, rather than having
to get hold of a brochure or talk to a sales person. It's the convenience of selecting and
buying necessities such as groceries via a website in 15 minutes, instead of
having to make the weekly pilgrimage to the supermarket, especially when its
raining ! It's the convenience of selecting a seat and booking a
ticket to the Smashing Pumpkins concert or the Swans playing the Cats at the
SCG. Who wants to wait in the queue
at 6am to get the best tickets? It's the convenience of reading a book review online that
you've been meaning to get, but just didn't find the time to get to the
bookshop. Once you've read the review, you can buy it without leaving your
house.
Interested in travelling overseas? The Internet is a ready source of
information on the big trip providing information on travel destinations and attractions,
flight details, package tours and hire cars.
Once these details are sorted out then the bookings can be made
online, sometimes at a discount compared to travel agents. Online banking is becoming more popular and the major
banks have realised the potential with St George, the Commonwealth Bank, and
Westpac all providing online account access and transfer facilities. ANZ has a site under construction and the
National is aiming to catch up. There
are many online share trading sites such as E*Trade and Commonwealth
Securities that are opening new doors to existing investors that want to
avoid broker's fees, and new investors that have never even considered using
a broker. Software and computer equipment are very popular purchase
items as they are necessities to access the Internet. Software is unique in that the product can
actually be delivered over the Internet allowing instant gratification. Music is similar as songs can be sampled
via the Internet using sound compression systems such as mp3, then purchased
online. One day when the technology
is established, whole albums will be available from the Internet. Netbuyers prefer Australian sites One of the great fears is that the Internet will enable US
based global retailers to take business away from Australian businesses. In
fact, Australian businesses are holding their own as half of the Australian
NetBuyers are buying from US based websites.
Concerns with physical delivery costs and timeframes from
overseas websites, sales tax implications, faulty goods and warranty returns
are key reasons why Australian Internet consumers prefer to buy from their
own country. Asia is not well represented in the e-commerce game,
indicating that Australia is well placed to take advantage of potential opportunities. Netbuyers want familiar brands and retailers There is still a lot of insecurity about buying over the
Internet and Australian Netbuyers have confirmed this by indicating that they
prefer to buy existing known brands from known retailers. A strong brand provides reassurance of purchasing a
product over a new medium such as the Internet. This is good news for
marketers that have invested in their brand presence, but it doesn. t mean
that new brands, with the appropriate investment, can. t eventually achieve
the same results. Australian Netbuyers are looking for websites that can
provide information on their products and services to support the purchase
decision. They don. t want to have to
wait to get this information, hence efficient website design and construction
are important to reduce the download time and speed of transactions. Finding NetBuyers to visit your e-commerce website is
vitally important. The primary source of information on electronic shopping
sites seems to be the World Wide Web itself, particularly from information
portals such as search engines and indexes like Yahoo, Yellow Pages and
Netscape's Netcaster. Print media is
also a useful source with the traditional electronic media not faring as well
due to their fast paced flow. The future I predict that
Australian Netbuyers will become more adventurous over time as they try out
the Internet to buy products and services that they would otherwise have
physically bought. As previously
mentioned, convenience will be a key driver for the adoption of online
services. Some of the routine tasks such as grocery shopping, paying
bills and banking are highly suited to online activity rather than physical
activity. Other purchasing activities requiring information are improved
through Internet delivery - travel is an ideal example where prospective
travelers can thoroughly research their intended destinations before
booking. There will always be products that where physical purchase
will be the preferred method - where the goods have to felt, sampled or
fitted, or where the face to face selling process needs to be retained to
provide the right amount of information or to instill confidence in the
buyer. Currently the Internet is restricted to approximately one
third of the Australian population aged 14 years and over that has sufficient
income to afford a PC and Internet access, or to those that are educated
enough to raise the priority for the need for access. As technology improves, the Internet will
be more universally accessible through technologies such as Web TV, where the
standard home television an access the Internet through a set-top box via
digital broadcasting. There is no doubt understanding the psyche and behaviour patterns of the Internet consumer is essential for e-commerce success and every effort should be made to capture your consumers profiles before, during and after they purchase from your organisations website For further information contact APT Strategies at info@aptstrategies.com.au |
