Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
While increased Internet use has resulted in a proliferation of Internet shopping, the online marketplace is still plagued by consumer confidence issues. According to the findings of the latest e-commerce study by The Boston Consulting Group (BCG), purchase failures, security fears, and service frustrations remain a serious concern for online customers.
The report, “Winning the Online Consumer: Insights into Online Consumer Behavior,” is based on research with 12,000 consumers in the United States and Canada conducted by BCG in the fourth quarter of 1999. The research included focus groups, one-on-one interviews, and surveys, and also focused on consumers’ use of the Internet for personal reasons, at home or at work.
According to the study, over half (57%) of today’s Internet users have shopped online, and 51% have purchased goods or services online. The typical online purchaser completed 10 transactions and spent $460 online over the last 12 months.
Yet 28% of all attempted online purchases failed, says BCG, and four out of five consumers who have purchased online experienced at least one failed purchase attempt over the same period. These failures resulted from technical problems consumers encountered with the sites, difficulties in finding products, and logistical and delivery problems after the sale.
Detailed views
The BCG study also provides a detailed view of the online consumer, examining the demographics of the online population, the patterns and progression of online and e-commerce behavior, the activities and sites that engage online consumers, the relationship between online and offline purchasing, and a variety of other factors that drive current and future trends in business-to-consumer e-commerce.
“Retailers tend to think of the North American online market as fairly homogeneous, but current online consumers actually fall into three groups, each with a distinct set of demographics, behaviors, and attitudes,” said David Pecaut, senior vice president and global e-commerce leader of BCG. “We identified three waves of online adopters, distinguished by the length of their time online, as well as their distinctive activities and purchasing patterns.”
The first wave of online consumers, the Pioneers, are the 23.2 million users who have been online for three years or more and now comprise 29% of the online population. The 39.6 million Early Followers have been online for more than one but less than three years and represent almost half of the current online population. The First-of-the-Masses are the most recent consumers to go online, having made the leap only in the last year, and represent 18 million users or 22% of today’s online population.
With each successive wave, the online population is becoming more representative of the demographics of the mass market. While the demographics of Pioneers are consistent with the Internet-user stereotype of the young, male technophile, the Early Followers and the First-Of-The-Masses are increasingly female, mature, less educated, and less affluent consumers.
Communications first, shopping second
All three waves of online consumers use the Internet primarily for communication, not commerce. Over 80% of all Internet users went online originally for communication purposes, while only 2% said they were motivated to go online to shop.
For instance, Internet users spend 43% of their time online engaged in communication-related activities, primarily e-mail. Information gathering, representing 27% of online time, is the next most popular activity. And this trend is on the rise-within six months a typical Internet user will have increased time spent online by 15%. Increasingly, online activities are replacing offline activities, such as paper-based correspondence and long-distance telephone calls. Leisure and entertainment are also being replaced by Internet time.
Consumers who have had a satisfying first purchase experience online are likely to spend more time and money online. The satisfied first-time purchaser typically engaged in 12 online transactions and spent $500 during the past 12 months; the dissatisfied first-time purchaser spent only $140 on four online transactions.
Barriers to consumer online buying
Consumers identified many “compromises” or barriers to shopping online. Among both new and experienced Internet consumers, anxiety over credit card security was the main barrier to purchasing online.
Purchase process breakdowns were also a major irritant, as well as a deterrent to further online shopping. Twenty-eight percent of consumers who suffered a failed purchase attempt stopped shopping online; 23% stopped purchasing at the site in question; and 6% also stopped patronizing the retailer’s physical store.
“Online consumers are not a very forgiving lot, maybe because purchasing online is so new for most of them that they are in a constant state of evaluating it,” noted Pecaut. “The stakes are high for online retailers who do not deliver.”
About the report
The entire report is available for free download from the Boston Consulting Group’s Web site at http://www.bcg.com, or directly from http://www.bcg.com/consumer_promise/form.asp.
ISM names top 15 CRM software packages
Selections included in company’s eighth edition of The Guide to CRM Automation.
The eighth edition of “The Guide to CRM Automation” is out, and it names the top 15 customer relationship management (CRM) software packages for 2000.
According to the guide’s publisher, ISM (www.ismguide.com), the Top 15, listed in alphabetical order by vendor name, are: Applix iEnterprise v. 7.5; Clarify eFrontOffice; ClientXchange 2000; Janna Enterprise Suite v. 6.0; MarketForce v. 6.2; ON!contact Software’s Client Management Software (CMS) v. 4.5; Onyx Customer Center v. 4.5; PeopleSoft’s Vantive Enterprise 8.2; Pivotal eRelationship; POINT Information Systems’ TeamPOINT v. 4I; SalesLogix2000; Saratoga Systems’ Avenue v. 5.1; Siebel 99.6; update.com’s Marketing Manager v. 4.5; and Worldtrak v. 4.4.
The Top 15 selections were based on ISM’s testing of dozens of packages in its Software Lab in accordance with ISM’s 124 selection criteria, including 80 business functions, 32 technical features, and 12 user friendliness/support issues.
About the report
“The Guide to CRM Automation” is available in three versions. The User Version, which is a blueprint to successfully implement CRM automation and features reviews of ISM’s Top 30 software selections, including the Top 15 leaders, targets existing and new CRM users. The Vendor Version, which contains the core User Version plus CRM vendor strategies for market segmentation, distribution channels, pricing and promotion, targets software vendors, distributors, resellers, and systems integrators. The Consultants Version, which contains Top 30 and Top 15 software package reviews, targets consultants specializing in CRM automation.
All three versions of “The Guide” are available in print and electronic format at www.ismguide.com. For buyers of any version of “The Guide,” ISM offers an annual update subscription service for an additional fee.
For more information or to order “The Guide,” call 800-SFA-GUIDE or (301) 656-8448, or visit ISM’s Web site (www.ismguide.com).
SPEX evaluates sales force automation packages
Vendor-neutral analysis of industry leading packages reveals new CRM functionality for sales forces and integration with CRM backbones.
SPEX has released the latest component of its customer relationship management (CRM) series, a new evaluation kit of sales force automation (SFA) software packages, the backbone of most CRM solutions. The SPEX Sales Force Automation Kit is part of a CRM series including other SPEX evaluation kits such as Electronic Commerce, Enterprise Marketing Automation, and Customer Service.
The Sales Force Automation kit assists organizations that plan to streamline their sales functions and better manage their sales information. In addition to pricing, licensing, design, and architecture, the kit includes comprehensive evaluations of relevant features and functions including: user-friendliness, end-user personalization and customization; Web access; security administration; data management of customer and prospect files; sales cycle management for marketing; telephone calls and sales actions, opportunity, quotes, and order management; integration with other CRM components and back-office applications; and reporting and CRM analytics of key performance indicators.
SPEX evaluated the enterprise software packages listed below in its Sales Force Automation kit and issued a SPEXmark rating of each product’s functionality, user-friendliness, technology, and market strength. The ratings range from outstanding to insufficient and provide a bottom line assessment of the packages.
The ratings include Applix’s Applix iSales; Saratoga Systems’ Avenue; Baan’s FrontOffice; Clarify’s ClearSales; Oracle’s Oracle Sales; Pivitol Software’s eRelationship 99; Siebel’s Sales Enterprise; and PeopleSoft’s Vantive Sales.
About the report
The SPEX kit includes in-depth, side-by-side product comparisons and positioning graphs summarizing the functional strengths of the products evaluated by SPEX. SPEX evaluations can be customized to meet users’ specific needs, using the SPEX Compass, an Excel-based tool that provides the details of the scores used to build SPEX’s product positioning graphs. The SPEX Compass and all other SPEX evaluation materials can be downloaded from the Client Area of the SPEX web site.
Samples of SPEX software evaluation kits can be found at www.checkspex.com.
