Retailers Boost Online Shopping Investments

Retailers Are Sold On Online Shopping, Shoppers Leery

Depending on your perspective on electronic retailing, you can see either acceptance and growth or distrust and paranoia. Two recent studies probe into what’s happening on the buying and selling sides:

Retailers Boost Online Shopping Investments

Retailers are slowly, steadily increasing their investments in online shopping capabilities, according to "Exploring the Digital Future," a survey conducted by Computer Sciences Corp. and Retail Info Systems News.

The Retail Technology Study — the seventh of these joint retail technology surveys — found that of the applications for technology, online shopping was a priority among the 300 information services (IS) directors surveyed.

"The thing that stuck out was that retailers have been increasing the use of online shopping substantially in the course of the last three years," explained Bernie Thiel, a principal with Computer Sciences Corp. He said the percentage of retailers offering some sort of online shopping experience has more than trebled in that period.

About five percent of those retailers surveyed in 1995 offered online shopping, compared to 11 percent in 1996 and 18 percent in this most recent study. An additional 39 percent of respondents say they plan to have an virtual storefront operational by 1999.

The study represents "an aggregate of all retailers," Thiel said. "It is higher in some segments, lower in others." The heaviest users of the Web for shopping transactions, according to the study, are book and music retailers, grocery and department store chains, and non-apparel specialty stores that offer a "catch-all" of retail goods. Thiel says the aggressive presence of book and music retailers online, particularly companies such as Amazon.com, Borders, Bookstacks Unlimited, and Camelot, has skewed the figures toward that retailing segment.

"The focus of the study is the application of various technologies to the retail operation," explained Thiel. "Essentially, it looks at IS (information system) budgets, IS spending and the types of technology retailers are adopting and the areas in which their organizations plan to apply technology to. The three main areas are: store, logistics and merchandising."

"Exploring the Digital Future" covers technology management and application trends in 11 retail segments: apparel, automotive aftermarket, books/music, convenience, department, discount, furniture/home furnishings, grocery, home center, hospitality and non-apparel specialty.

The 300 respondents to the mailed questionnaires are top technology officers at companies that subscribe to Retail Info Systems News, as well as top IS professionals at companies that are not subscribers. These respondents include IS directors or managers, vice presidents of IS and chief information officers. The companies for which they work range in size from revenues greater than $1 billion annually to less than $25 million in annual revenues.

For more information visit the CSC Web site, http://www.csc.com.

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Online Shopping Survey Shows Lots Of Looking, Little Buying

For all the hoopla about electronic commerce, Web surfers prefer going down the street to the store rather than purchasing from a virtual mall, according to the results of a survey conducted by Chilton Research Services.

The study found that, while a "significant" number of people do look online for product information, few are ordering those items online. The nationwide random telephone survey found that 36 percent of the survey respondents who use the Internet said that "getting product information" online is important, compared to 14 percent who rated "ordering products" as important.

Barbara Nuessle, Chilton Research Services, senior research associate, said, "We’ve come to a couple of conclusions. There probably are not as many bargains online, so consumers are looking to conventional outlets for price. They are looking and doing a lot of window shopping." Only ten percent of the survey respondents said they have made a purchase via the Internet.

She said for large purchases, such as homes, consumers are getting basic information, namely researching potential areas in which to purchase or narrowing down the selections, via the Internet. "The Internet gives them a lot of basic information," said Nuessle. "It is an important shopping tool."

The other issue is the often-mentioned twin bugaboo of security and privacy. Consumers aren’t yet willing to send information they regard as private — address, telephone numbers, credit card information, and other personal data — via the Internet because they perceive it as an unsecured means of relaying that information.

"Security and privacy came up as being very problematic for people," Nuessle said. She did say the survey did not go beyond noting the concern into measuring the depth of concern.

"People have to get in the habit of ordering things online as they do with a catalog," she said. "As the security issues get resolved that figure will go up." Items purchased online, according to the survey, included clothing, computer hardware and software, books, and CDs.

The Chilton Express telephone omnibus survey sampled 1,012 American men and women ages 18 and older, between April 16 and April 20, 1997. The margin of error for the survey, according to Chilton Research Services, is plus or minus three percent.

(Contacts: Bernie Thiel, Computer Sciences Corp., 216-449-3600,Tim Hegarty, Elkman Advertising and Public Relations for Chilton Research Services, tel 610-668-1100; Barbara Nuessle, Chilton Research Services, tel 610-964-4694)

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