Consumer Behavior on the

Internet

Internet Marketing
Assignment for next week:
 On syllabus
 Choose an article.
 Choose a topic you want to know more
about.
 Worldwide Internet Users
 455 M have home Internet access, 292 M
“active” users (August 2004)
 U. S. 201 Million Total, 135 M active
(August 2004)
 www.nielsen-netratings.com
E-commerce Sales,
North America
 $42B 2000
47B 2001
78B 2002
113B 2003
(almost 80% of e-tailers were profitable )
 $144B predicted 2004
(6.6% of total retailing)
(Forrester Research 2002-2003-2004)
October, 2004
Internet-related behaviors and
online purchasing
 16% of online users are classified as “heavy”
searchers
 Heavy searchers spend 35% of dollars spent
online
 Broadband users spend 50% more than
narrowband users
 Broadband use and longer experience have
an “interactive” effect on amount of
purchasing
 (comScore, October 2004)
Worldwide Users
 In Europe, Middle East and Africa, Germany
dominates
 In Latin America, Brazil dominates
 In Asia Pacific, South Korea is first, Singapore
is second
 In Europe and Asia Pacific, heads of HH with
University degrees
 Except for US and Canada, the Internet
population is predominantly male
Worldwide Users
 Motivations for Online
Shopping

This research has been supported by grants from the CISE/IIS/CSS Division of the U.S. National Science Foundation and the NSF
Industry/University Cooperative Research Center (CISE/EEC) to the Center for Research on Information Technology and Organizations
(CRITO) at the University of California, Irvine. Industry sponsors include: ATL Products, the Boeing Company, Bristol-Myers Squibb, Canon
Information Systems, IBM, Nortel Networks, Rockwell International, Microsoft, Seagate Technology, Sun Microsystems, and Systems
Management Specialists (SMS).
Do you shop online?
 What are your motivations for shopping
online?
 Where (location) do you shop online?
 How do you choose a place to shop
online?
 When do you shop online?
 Goal of Our Study

 To better understand consumer

experiences online
 To see how consumers compare online
and offline shopping
 Ultimately, to develop a reliable/valid
instrument for measuring consumer
satisfaction/ quality ratings
Methodology
 Talk to consumers
 3 focus groups of MBAs/staff who buy
online
 2 focus groups of online buyers in OC
arranged by Harris Interactive
 4 online focus groups with Harris
Interactive
 What have we learned?
Themes:
 Goal-Oriented Motivations – Shopping to

acquire products
 (3/4 to 4/5 online purchases)
 Time spent at e-commerce sites? <5 min/visit,
29 sec/page

 Experiential Motivations – shopping to

shop
Goal-Oriented Motivations
 Accessibility/Convenience
 Selection
 Information Search
 Lack of sociality

Outcomes Desired: Freedom and Control

Selection
 Can pursue specialized interests/
hobbies
 Can locate products not available close
to where lived
 Can find special sizes, special items
Convenience/Accessibility
 24/7 accessibility perhaps most important
aspect of convenience
 Don’t have to walk or drive store to store
 Strongly related to freedom and control
 Ease of use, simplicity of making transactions
are important
 Shop anywhere, anytime, in any condition….
Information Search
 A major motive for using net, both for
surfing and shopping
 Consumers want to find relevant
information quickly
 What’s important in designing for
information searchers?
Information Search
 Avoid clever “killer website” features
 Good search function/multiple, easy to
understand categories
 Product representation in graphics and
text
 Easy to use “intuitive” organization
 Information increases freedom and
control in online shopping environments
Information Search
 More consumers buy offline as a result
of online search than actually purchase
online – “Cross channel shopping”
 Major reasons? Need to look at item
first and/or talk with salesperson
Sociality
 Lack of people viewed as positive by online
shoppers
 Included salespeople, spouses, and crowds
 Frustration with salespeople was multi-
dimensional – unmotivated, uninformed,
pressure, obligation: “I need them but not as
much as they think I need them.”
 Back to control and freedom!
Sociality
 However, must answer customer
questions
 Customer service and delivery service
allay some perceived risks of online
shopping
Results of Goal-Oriented
Behaviors
 High involvement, low commitment “nibbling”
and “snacking”
 Can shop in shifts
 Not disappointed if don’t buy
 Easy to find another site if current one
disappoints
 No pressure
 Many sites save abandoned shopping carts
 Shopping online from work
 Are consumers more impulsive on- or offline?
Experiential Motivations
Are we having fun yet?
 Browsing much more likely offline

 Desirable because experiential shoppers

are more impulsive, spend more

 Behavior: More time spent on site,

more pages accessed

 Outcome desired: FUN
Experiential Motivations
 Hobbies, ongoing interests
 The fun of anonymous shopping
 Auctions
 Searching for discounts, low prices
Experiential Features
 Online Customer Reviews
 Fun design features that users can
choose to use or not
 Appeal to impulse buying motives –
special deals, other product suggestions
Experiential Features
 Make frequent updates, mark anything
“new”
 More open to sociality, community,
content
Relative Percentages?
 Of the most recent online purchase
made, 71% were goal-oriented and
29% were experiential
 Experiential behavior more likely at
auction sites
 Women more likely than men to report
experiential shopping behavior
 Likely changes by product category
Conclusions from this Study
 Need to analyze visitors’ motives for shopping
at your website and determine how many are
shopping to shop or shopping for product
acquisition
 Goal-oriented consumers want to find what
they want easily and make the transaction
quickly and easily; they like anything that
improves their freedom and control
 Stickiness? Immersiveness? Content?
 Sites can be designed that appeal to goal
focused and experiential motivations
Results apply to shopping
only?
 Behavior at content sites?
 News?
 Sports news?
 Dating sites?
 Gaming sites?
 Implications for advertising?
So who shops online anyway?
 Best predictors: technology optimism
and time starvation

 Buyers also spend more hours online a

week than non-buyers and have been
using Internet for longer
Forrester’s “Technographics”
Segments population into 10 segments
based on:
 Attitude toward technology (polarized)

 Income (use 40K as a cutoff between hi

and low) (surprisingly 40% of affluent

are technology pessimists)
 Motivation to use technology(career,

family or entertainment)
 Consumer Technographic Segments,
US (Forrester Research)
Primary Motivation
Career Family Entertainment

Technology
Optimists Fast Forwards New Age Mouse Potatoes
High Income
12% Nurturers 8% 9%

Techno- Digital Hopefuls Gadget Grabbers

Low Income Strivers 7% 7% 9%
Technology Handshakers Traditionalists 8% Media Junkies
Pessimists High Income 7% 5%

Low Income Sidelined Citizens (28%)

Adoption
 Early adopters: fast forwards, new age
nurturers and mouse potatoes (29%)
 Mainstream: As much as two years
behind early adopters; techno-strivers,
digital hopefuls, gadget grabbers,
handshakers, traditionalists, media
junkies (43%)
 Laggards: Sidelined citizens (28%)
Early Adopters
 Fast forwards – high income, motivated by
career needs, own lots of tech, surgical
shoppers, not price-oriented
 New Age Nurturers – high income, motivated
by family and community; maybe most critical
group; more credible opinion leaders than
“fast forwards,” they set trends; more price-
oriented than FF
Early Adopters
 Mouse Potatoes: Use tech for fun, visit
sports sites, adult entertainment, look
up movie info, play online games, more
likely male, less likely to have children,
median age 40 and high income; buy
on impulse and convenience, not price-
oriented
Mainstream
High income pessimists:
 Handshakers are career-oriented

 Traditionalists focus on family,

community
 Media Junkies, like fun but not tech

(when they do buy online, it’s usually

books)
High Income Technology
Pessimists
“Demographically, the pessimists look just like
the optimists – middle aged, well-educated,
family householders. High income pessimists
like to drive Jeeps, Volvos and Toyotas, just
like high income optimists. What’s more,
high-income consumers share tastes in
media. Both like newsmagazine shows and
major sporting and entertainment events.”
--Mary Modahl, Forrester Research
Mainstream
Low Income Technology Optimists
 Tend to be young – “techno strivers” (career

oriented) or “gadget grabbers” (fun oriented

 Groups quite diverse, male and female, 23%

minorities; engage in online activities

 Don’t earn much because just starting out

 Single, college-educated, white collar

Mainstream
Low Income Optimists
 One more group: Digital hopefuls – a

very large group of family-oriented

retirees using the Internet to stay in
touch
Winning Mainstream
Consumers
 Like clicks and mortars businesses:
“once mainstream consumers realize
they can do business equally well
anywhere, they often choose the
electronic channel.
 Advertise on TV where mainstream is
half of the audience
Sidelined Citizens
“These consumers are pessimistic about
technology. Even if they could afford a home
PC, most probably wouldn’t buy one. And if
they had a PC, it is unlikely that these
consumers would use it for online shopping…
fewer than 50 percent of Sidelined Citizens
use the automated teller machines at their
bank for making deposits and withdrawals.
That technology is free, and it has been
around for more than 20 years.”