Research
Deflating the myth of online research
By Diego Vasquez
May 20, 2008 - 1:10:41 AM

People are spending more money than ever before on online purchases, but the web still isn’t rivaling brick and mortar stores. In fact, surprisingly few people are even using the web for research before they buy. That’s according to a study by the Pew Internet and American Life Project released Sunday, which finds that a relatively small percentages of purchases for everyday items like music and cell phones are made online. What’s more, while consumers may look online for information about a potential purchase, they’re likely to combine that with offline intelligence, and they say that other sources of media or word of mouth are more likely to influence their decision to buy. Of those buying music, cell phones or real estate, 11 percent or less of those surveyed said the web had a major impact on their decision to buy, and 22 percent or less actually made their purchases online. John B. Horrigan, Ph.D., associate director of research for the Pew Internet Project, talks to Media Life about whether the web’s influence will ever get stronger, which categories do best online, and why some people are still concerned about security. 

 
What did you find most interesting or most surprising about this report?
 
We found that online information is important in the process of shopping, but not very influential in shaping people's choices of specific products.

And that was a surprise. Even for a digital good such as music, more people used mainstream media or family and friends to find out about music than used the internet.

Additionally, few people execute purchases online; 22 percent of music buyers say their most recent purchase was done online and just 12 percent of cell buyers bought their phone using the internet.
 
 
What is the most important thing media planners and buyers can take from this report?
 
The report shows that offline and online information work together in people's purchasing decisions. For cell phones, for instance, people will go to the web sites of service providers or manufacturers but also go to stores to talk to salespeople.

This means that online information exists in a very competitive information environment; people rely on multiple information sources in product research. This means online information has to be trusted and reliable, given that people will use other sources quite readily.
 

Why isn't the internet used more to "seal the deal" on purchases? Do you expect this to change over the coming years?
 
Most internet users (84 percent) either agree or strongly agree with the statement that they prefer to see things before they buy them. So the physical inspection of products remains important to people.

That may change in the future, as faster networks and better displays improve the quality of virtual inspection of goods.

But for some time, it appears that many people will want to execute transactions in "brick and mortar" stores.
 

You found that a very small percentage posted an online rating or comment after purchase. Why is that?
 
We found a disconnect between the number of people who rate specific products (our survey focused on cell phones, music and real estate) and the number who consult ratings in product research.

Few will rate products, but lots will consult ratings in product research. Some people are content to, essentially, free ride off the efforts of others who rate products.

Limited time and attention are other reasons; once people have taken the time to research and buy a product, some simply don't have time to take the next step to rate the product.
 

Even when people do not make online purchases, how can the internet drive them to spend more money?
 
Music is a good example where online information can foster additional spending. More than half (56 percent) of music buyers get information online about music, and of this group, one third samples songs online. People might go online to check out one song (or artist) and come across a different song (or artist). The consumer might then buy two songs (or albums) when the intent had been to purchase one.

The same dynamic can happen with cell phones -- a consumer might discover, through online research, a phone with more features that costs a bit more.
 
Of course, the opposite can occur. Online information can eliminate potential purchases if the information suggests that the product might not be for him.
 

Are people still concerned about online security when making purchases?
 
Yes. Some 36 percent of internet users say they are very concerned about sending personal or credit card information over the internet. People with this high level of concern about sending this information over the internet are less likely to buy online.

However, for some internet users -- even those with security worries -- the convenience of online shopping outweighs whatever security concerns they have.

Which purchases are most likely to be made online and why?
 
The report focused on three products – music, cell phones, and real estate – and we asked about online purchasing for cell phones and music only.
 
Music was more likely than cell phones to be purchased online, and that’s because it’s a low-commitment digital good. That is, it can be sampled online and, even if the purchase doesn’t fulfill expectations, the buyer is only out a few bucks.

For cell phones, there is a commitment involved – usually by contract – and the device is more expensive. Thus, people are more likely to want to touch and feel a cell phone before purchase – which is why they are more likely to buy in-store than online.