Growth in Internet traffic bodes well for on-fine shopping

Discount Store News, Sept 7, 1998 by Jennifer Negley

That was the powerful finding of a new Nielsen Media Research and CommerceNet study on Internet commerce. The ongoing research project, which has been conducted since 1995, charted the nine months between September 1997 and this past June.

And as the number of Internet users has risen, so too has the pool of Internet shoppers. The number of people in the U.S. and Canada who bought products and services on the Internet has grown to 20 million-nearly double the number of people shopping the Internet in the year-earlier period.

The percentage of people using the Internet to research goods and services grew about 37%, a pace roughly in tandem with the growth of the number of U.S. and Canadian Internet users, who now total 79 million. The number of people who use the Internet to gather information on products and services or to simply compare prices and features has reached 48 million.

Consumers appear to be placing increasingly greater trust in the Internet as a shopping alternative. While the number of Internet users increased at a compounded rate of 2.5% during the nine-month survey period, the growth rate for online shopping exceeded that figure. Between January 1997 and September of that year, the number of on-line buyers grew at a rate of 3.5% a month. But in the most recent study period, the velocity of that growth sped to 8% a month.

Who's shopping? Although 43% of Internet users are now women (about 34 million total), most online shoppers (64%) and the overwhelming majority of on-line purchasers (71%) are still men.

People age 50 or older still make up a small segment of overall Internet users, accounting for about 17%, or 13 million people in total. Although the number of users in this group is growing at about the same pace as the overall population of new Web users, fewer than half of people age 50 or over are on the Internet.

The question for many retailers and suppliers, of course, is still whether any of this much matters-or more precisely, whether any of it yet matters.

You bet it does. Here's one example. Over the past six months, 22% of Web users have shopped on line for airline tickets and reservations-a 49% increase, according to @plan, a consumer research consultancy. Do you think travel agents need to be concerned about this rapidly growing threat to their franchise?

Although the day when a majority of consumers buy their commodity goods and consumables on the Web is probably a few years away, it's important to remember that once consumers find an better alternative to what they already have, they seldom look back.