Why Surveys That Say eCommerce Is The Preferred Channel Are Wrong...

Below is some published research that BizRate put out last year. It simply states that for those shoppers that are online, a majority of them stop off at a aggregator site first. I can believe that. What I can't believe is that anyone would imply that this research is represenative (given that it only has 923 respondents) of the overall consumer population. The survey sample is just too small to be meaningful. Also, there is this obscure fact that the revenue generated by off-line shopping equates to 96% of all dollars spent. This makes it really clear that what matters is store sales. Sure 4% of sales revenues comes from online channels, but retail brick-and-mortar establishments still command the market. The bottom line is all this research may be helpful in understanding the online consumer, the lessons it tells just do not equate to the off-line shopper.

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Survey Reveals That 71% of Internet Shoppers Find Better Value and More Special Offers Online Than Offline

According to a recent BizRate survey conducted in early 2005 of 923 online buyers, consumers are flexing their wallets by aggressively searching online when looking for merchandise and deals, instead of shopping at tried and tested retail channels.

Most consumers (59%) are starting their shopping at aggregator sites (search engines, comparison shopping sites, shopping portals and auction sites) versus going directly to a merchant's site and taking the first price offered. This represents a 13-percentage point consumer shift towards aggregator sites in less than three years*, when only 46% started shopping at aggregator sites and the majority (54%) of shoppers went straight to a merchant's site. This shift is probably because 87% of online shoppers are now comparing offerings of online retailers against catalog merchants and retail stores to find the best deals and items that are in-stock, with 71% of online shoppers reporting that they were able to find better sales and discount offers online than offline via a retail or catalog merchant.

Comparison Shopping is Prevalent
It is the American way to shop around, with 70% of respondents reporting they compare prices every time or most of the time they shop online, but some folks are still doing it the hard way. While 37% of online shoppers are very savvy and let a comparison shopping site do their deal-hunting for them, the majority (64%) still comparison shop the old-fashioned, time-consuming way by roaming from site to site looking for the best value. In fact, Internet shoppers will visit an average of four online retailers prior to choosing which site to buy from - while actively comparing prices (94%) - and then they visit the site of their choice an average of 2.61 more times before proceeding to checkout.

Deal-Sensitive Categories and Other Methods Shoppers Use to Save Money
Books and clothing tend to be the two most popular categories online shoppers deal- hunt the most. Other common ways to search for deals include signing-up for sale newsletters (36%) and just waiting for sales (22%). For 74% of consumers, the biggest deal leading to a purchase is receiving a free shipping deal, or a special offer.

Good Value vs. Brand Loyalty
Online shoppers are very rational when it comes to saving money. Forty-three percent will not pay extra from a retailer they like, if they can get it elsewhere for less. However, consumers exhibited a moderately high level of loyalty to their favorite brands with 34% of online shoppers reporting that they buy the same brand "most of the time" when shopping online, 62% reported buying the same brand "some of the time", and 1% reported buying their favorite brands "always."

About the Study Methodology:
The Online Shopper Deal Shopping and Value Panel Study, conducted by BizRate Research, a division of Shopzilla Inc., is based on a survey with a sample of 923 online shoppers from February 22-28, 2005. Survey respondents were selected from among a panel of 790,000 online shoppers. Respondents were 44% male, 56% female adults.
* denotes same study conducted December 4-9, 2002.

Note: All site data accurate at the time of issuing this press release.