Nielsen: Online Shopping Means More than Making a Sale

Consumers are going online to find out about holiday deals, but not necessarily to buy, according to The Nielsen Company’s Online Division. Presented during this week's "The Online Holiday Outlook: 2009" Webinar, the research group found that consumers have steadily moved away from buying holiday gifts online, and those who do choose to use the Internet are looking for convenience, rather than value.<br clear="none" /> <br clear="none" /> The study, which drew on the online responses of over 1,000 individuals polled between Nov. 2-4, found that although 63 percent of consumers intend to shop online this holiday season, the trend has been in decline, dropping 10 percentage points since 2007. Additionally, the share of consumers who reported that they will not shop online during the holiday season has risen from 1 percent two years ago to 7 percent.<br clear="none" /> <br clear="none" /> Those who do expect to shop online this holiday season are planning on spending less. Only 16 percent of consumers plan to spend $500 or more, compared to 24 percent last year. Spending at lower price points has also grown this season, with a 7 percent increase in the $100 - $299 range (47 percent) and an 4 percent gain among those spending less than $100 (22 percent).<br clear="none" /> <br clear="none" /> Ken Cassar, vice president of industry insights for Nielsen's Online Division, who presented the data, said that the online segment has lost its cache as a place to get the best deals. "The reason that consumers are shopping online is not so much about price, it’s convenience."<br clear="none" /> <br clear="none" /> Cassar pointed to the top reasons that consumers cited for shopping online. While respondents said that buying online saves on trips to the store and gas expenses (53 percent) and makes it easier to compare prices between retailers online than in the store (51 percent), the other top-cited reasons all came back to ease of shopping. The No. 1 reason for shopping online (69 percent) was that "when I buy online I can shop whenever I'd like," while 57 percent of respondents said it "allows me to avoid the holiday shopping crowds at stores."<br clear="none" /> <br clear="none" /> While the top reason that consumers gave for not shopping online was the additional shipping and handling charges (53 percent), almost all of the other reasons had to do with concerns about convenience or quality, rather than cost. The need to physically see or touch the product was the No. 2 reason (51 percent), followed by those who said they enjoy looking around a physical store for ideas (44 percent) and that it was easier to return items bought in-store (40 percent).<br clear="none" /> <br clear="none" /> "Consumers are much more comfortable making purchases offline around the holiday season&#x2014;they want to pick it up, touch it, interact with customer service reps in person," said Maya Swedowsky, associate director of industry insights for Nielsen's Online Division. Swedowsky went on to say that while consumers might be pulling back from online shopping this season, the Internet will continue to play a major role in individuals' buying behavior. <br clear="none" /> <br clear="none" /> Consumers primarily used the Internet before going into the physical store to find good deals and promotions. Those seeking out store hours, telephone numbers and gift ideas are far fewer than those looking to learn about sales, compare prices or find information about sales and coupons for physical locations.<br clear="none" /> <br clear="none" /> "All the conversations that are happening here and happening in social media as a whole are clearly impacting the purchase decisions people are making, and this becomes increasingly true over the holiday season," said Swedowsky. "There is a clear opportunity for retailers to get involved and use social media to really get shoppers excited about your holiday deals and to do that in advance."<br clear="none" /> <br clear="none" /> She pointed to some examples of how social media was being used around Black Friday. Staples has already started to post specific Black Friday deals on its Facebook page, and has employees manning the page and answering questions about the details and getting shoppers to think about Staples as a destination for Black Friday. Toys 'R' Us is asking shoppers to become fans of its Facebook Fan Page and inviting them to Black Friday as an event, rewarding shoppers by giving sneak previews to the deals it will be offering.<br clear="none" /> <br clear="none" /> They concluded by emphasizing that retailers' online presence and advertising should not be seen as only focused on the online sale. <br clear="none" /> <br clear="none" /> "When we hear people talk about shopping online, it's not just about buying online," said Cassar. "While the Internet may not be seen as a value channel as strongly as it might have been back in 1999, it's increasingly seen as a value media where consumers can find deals and find good prices. We think that represents a big opportunity for retailers."