For shoppers, web's
still a place to visit
But it's lost its allure as a place to get the best deals
By Diego Vasquez
Nov 25, 2009
The holiday shopping season kicks off in two days, with stores already hyping their Black Friday deals. This year the season will look a little different, though. Fewer people plan to buy online this year, after years of explosive growth for the medium. That's according to a study from Nielsen's online division, which finds that just 63 percent of respondents plan to do at least some shopping on the internet this year, down 10 percentage points from 2007. Seven percent said they won't do any web shopping, up from 1 percent two years ago. The rest were undecided. One major reason for the decline has to do with the recession. Money-pinched shoppers are searching out bargains more than ever this year, and they are no longer convinced they'll find the best deals online. Though many compare prices on the web before actually going to a store, they're increasingly drawn by in-store discounts or web coupons that can be redeemed at the store rather than spending extra money on shipping. Online shopping is now seen as a matter of convenience, for when you can't get out to the mall. Maya Swedowsky, associate research director of Nielsen’s online division, talks to Media Life about how perceptions of online shopping have changed, why usage has gone down, and why it could rise again once the recession ends.
What was the most interesting or most surprising thing you found in this survey?
The internet has lost its cachet as a value channel. In a survey we fielded during November, the main reason consumers stated they shop online is not to save money but for convenience.
Respondents said the top reason they would shop online was the ability to shop whenever they wanted (69 percent), followed closely by the ability to avoid the large crowds associated with holiday shopping (57 percent).
Only one-third of respondents said that they thought they could find better prices online.
What's the most important thing media buyers and planners can take from it?
While the internet may not be seen as a value channel, it is seen as a value media. It is clear that while the majority of all purchases continue to take place offline, the internet has an important role to play.
Deals found online impact holiday purchase decisions and drive purchases at brick and mortar locations.
Online sales aren’t going to be the salvation for most multi-channel retailers, but online dissemination of deals through their own web sites and through social networks may allow individual retailers to gain share in their stores.
Multi-channel retailers have some work to do. They need to take better advantage of their physical presence as a means of differentiation, and those that try to differentiate on price must have a sustainable, systemic way of doing so.
The chief marketing officer should be the most prominent voice driving web site strategy, and increasing attention should be put toward online ad effectiveness measurement tools and connection of online research to offline sales.
Why is the level of people doing holiday shopping online declining? Do you think that trend will reverse when the recession ends?
Overall, many consumers are planning to spend less this year than last year. Forty-two percent of respondents stated that compared to a year ago they were planning on spending less money on holiday gifts, compared with only 4 percent who intend to spend more.
Fewer shoppers are planning to make their holiday purchases online, largely because the online shopping is no longer deemed the money-saver it once was.
Since convenience, not money savings, tends to be the key driver for making purchases online, we believe that consumers may turn back to the online channel once the recession ends; however, we do not expect consumers’ spending behaviors to change drastically once the recession ends.
Nielsen’s October 2009 Consumer Confidence Survey found that Americans are more likely than the global average to continue to cut back on the amount they spend, even once economic conditions improve.
How much do people use the web simply to window shop? Why?
Shoppers actively rely on the internet to make price comparisons, learn about sales and promotions available in physical stores, and find coupons redeemable in-store. In October 2009, over one-third of the U.S. online population visited at least one deal-oriented web site.
Only 19 percent of respondents reported not visiting retailers’ web sites before making trips to physical locations.
Fifty-five percent of respondents said they use the internet to compare prices across retailers.
And 49 percent answered that they use the web to learn about sales and promotions available in physical stores.
Is there a certain demographic that is more likely to do much of their shopping online?
Comfort-level with online shopping is one of the most frequently cited reasons for not purchasing holiday gifts online. Some shoppers want to be able to physically see and touch products or speak to a customer service representative in-person before making a purchase.
Those that have grown up with the internet and e-commerce are likely to be more comfortable making purchases online, sight-unseen; however, we expect to see that habit will continue to play a large role in why consumers prefer to make purchases in-person.
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