Report: Expect More Shoppers with Less Money as Web Grows

The online shopping population in the United Stateswill double from 66 million to 132 million by 2006,according to a new report released by Jupiter Media Metrix(Nasdaq: JMXI).

“It’s easy to assume that because online sales growthhas begun to decelerate, the online population must bestabilizing. In fact, this is not the case,” thereport said.

Indeed, e-commerce growth is leveling off — in 1998, forinstance, it took just a year for the size of theonline shopping audience to double — but that does notmean e-commerce will decline.

Jupiter Media Metrix analyst Ken Cassar told the E-Commerce Timesthat the research firm expects to see US$40 billion in onlinesales this year, plus an additional $200 billion spentoffline as a result of research done on the Web.

Cassar said he expects growth to continue beyond 2006 aswell. “Once people have begun to buy online, theydon’t go back,” he said.

Middle-Class Buyers

In four years, the average Web shopper will be olderand less affluent than today’s younger, wealthierInternet buyers, according to the report. By 2006, the average online shopperwill be over age 35, and more than half of new Web buyersfrom 2002 to 2006 will have an annual income of between$30,000 and $75,000.

“The next generation of online shoppers will be quitea bit different than the consumers who defined theInternet channel in its early years,” Cassar said in a statement. “They will be more representative of middle-class America.”

The bulk of growth in new online shoppers over thenext five years will be among those under 18 and over50, the report said.

Shoppers aged 35 to 49 willdrop from 49 percent to 19 percent of the total e-shopping population, and children and teenagers will make up 20 percent rather than 5 percent of the total. Adultsaged 19 to 35, who currently represent 47 percent ofnew online shoppers, will account for just 19 percentof new shoppers by 2006.

What’s Hot…

As online shoppers’ average age rises, prescription drugswill become a hot e-commerce commodity, according tothe report. Currently, just 16 percent of onlineshoppers are 50 or older, but Jupiter forecast thatthis age group — which is almost twice as likely topurchase prescription drugs online — will comprise 30percent of new shoppers by 2006.

Clothes also will become more popular among Webshoppers as women — who spend more on apparel thanmen do — conduct more of their shopping online. Jupitersaid it expects the percentage of female e-shoppers –currently about 54 percent — to hold steady over thenext four years.

Jupiter also expects online purchases of kitchenproducts, small appliances and large appliances — allof which are popular with women and older consumers –to show strong growth over the next five years.

…And What’s Not

But according to Cassar, growth in two e-tail categoriesthat experienced very fast growth early on will level off. Online sales of computers and computer accessories, as well as of books, videos and music, are beginning to mature.

“Consumers that are just coming online now are farless curious technologically,” Cassar said. “They’llbe perfectly happy with the functionality their $500computer offers.”

Changing Values

The coming demographic change also will alter online shoppers’ perspective on e-commerce and will change which concerns they have. Jupiter predicted thatworries about credit-card security andpersonal information will decline.

As the average income of online shoppers drops, pricewill become a more important issue, the report said, and consumers willbe more likely to comparison shop.

As e-commerce matures, Web buyers also will expect aneasier returns process, and they will be less likely to buywhen there are shipping and handling costs.

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