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PRICE NOT KEY DRIVER AS MAJORITY CRAVE SERVICE AND TOTAL VALUE

Posted on November 24, 1999

      Sending a serious signal to online businesses and countering conventional wisdom, 25% of experienced Internet users said that banner advertising drove them to shop online, beating out newspapers or magazines ads (14%), television commercials (11%), radio spots (4%), and billboards (4%), according to a nationwide survey of nearly 1,500 experienced Internet users by Andersen Consulting.

      While most Web site banner ads are price-oriented, less than half of experienced web users cite price as the primary factor driving their web purchases, according to the survey. Instead, consumers rank convenience, time savings and site security as more meaningful factors in driving their online shopping.

      "Promoting rock-bottom prices won't ensure online purchases or repeat business. Savvy net consumers consider the full shopping experience - from first click to home delivery, said Mary Tolan, Andersen Consulting's Managing Partner, Retail. "Consumers want to be able to return merchandise, and they don't like paying for delivery, which suggests a new set of marketing messages. eTailers can choose to promote themselves to the death over decreasing prices, or they can deliver holistic services that provide real value to consumers and generate real profits," said Tolan.

      Retailers seeking to establish their online brand during this crucial holiday season, must provide superior customer service and unique value to attract and retain customers, the study suggests. For example, only 34% of online holiday shoppers will know exactly what they want to purchase when they go online this season, while 63% will have a gift idea, but will not know exactly what they want to purchase. Online retailers offering advice and personalized gift suggestions will be providing a sorely-needed service for online shoppers, boosting customer loyalty and expanding bottom line profits, the study noted.

      Respondents also said they plan to use online sites that have the following characteristics:

  • 80% plan to use sites that offer good value
  • 74% favor sites that provide ease of use and convenience
  • 65% want to shop at sites that have merchandise in stock and provide quick delivery
  • 64% will frequent sites that offer variety and an assortment of products

      The survey also identified the factors which deter online purchases. Beyond the often mentioned concerns of privacy and security, Internet users who have not bought online rated the following issues extremely influential reasons for shunning eCommerce:

  • 46% have a concern over returning unwanted goods
  • 44% enjoy the traditional brick and mortar shopping experience
  • 42% say web sites require too much information for purchases
  • 41% do not want to pay for delivery

      "eTailers are judged by their entire capability rather than just a cool web site or a slick ad campaign," Tolan said. "Service still matters, whether you are a 'click & mortar' or traditional retailer. The magic is what happens after a sale is recorded: having the right stock, the ability to ship in real time and being able to provide post-purchase support will determine online survival."




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