US Study: E-commerce hits the mainstream

The latest evidence that e-commerce is catching on: a study from San Francisco research firm Odyssey LP shows that half of online households have recently made online purchases.
Written by Matthew Broersma, Contributor

Not only that, they are shopping more frequently. The new study is part of a growing body of research that suggests consumers' concerns about buying products online are easing, and that e-commerce is achieving mainstream acceptance. "After all the projections and optimistic assessments ... we're finally seeing the real thing," said Elizabeth Atcheson, Odyssey's vice president of business development.

The study, based on January interviews with 2,500 consumers, found that 47 percent of online households have made online purchases in the last six months, up from 30 percent the previous January. Households that made purchases bought an average of 3.7 items, up from just 1.7 a year ago. The total number of purchases in the last six months rose to 56 million -- more than four times the number measured in January 1998.

Atcheson attributes the rising e-commerce tide to increased PC penetration, a rising percentage of online households -- 33 percent in January -- and to households that do make online purchases doing so more frequently. The data from Odyssey and other researchers suggests that the e-commerce business has built a strong foundation for long-term expansion, and that consumers are buying into the idea. "It has definitely become mainstream," said analyst Kate Delhagen of International Data Corp. "People are constantly going to the Internet as a source of consumer information ... and also for purchasing. A year and a half ago, there were concerns about security, but people are much more comfortable with it now."

And online selling will have plenty of room for growth, since the present U.S. online population of 90 million is expected to double in four years -- to 180 million by 2003, according to IDC. A big influence on the growth of online shopping has been America Online Inc. which constantly encourages its millions of users to try the experience out, and makes them feel safe in doing so, analysts said. "It's hard to underestimate AOL's influence here," said Jack Staff, chief economist of Zona Research Inc. "They'll not only connect you, but get you what you want, and for a beginning user especially, that's important."

Successful e-commerce players and portals have also had a big impact, simply by bringing trustworthy buying experiences online, according to analyst Delhagen. That fosters word-of-mouth promotion, which can be more effective than any amount of traditional advertising. While experts see a building momentum, the numbers are not yet significant in the larger picture. Half of online users may shop online, but most households in the U.S. are yet to be connected to the Net. "The online population is not in the majority," said analyst Staff.

Editorial standards