Report: The State of U.S. Online Shopping

A U.S. Department ofCommerce survey has found that more than half theU.S. population is now connected to the Internet. In addition, 39 percent of Internet users are making purchases online.

The study was based on U.S. Census Bureaustatistics and included data gathered from more than 137,000people. It found that in September, 143 million U.S.residents — about 54 percent of the population –were using the Internet, up from 117 million in August2000. Of those users, 55.8 million bought goods orservices online.

And online shopping will continue to grow as consumers getmore comfortable with the Internet, according to GartnerG2 analystDavid Schehr.

“Once somebody’s online, it typically seems to takethem a year-and-a-half to two years to make the move tobuy online,” Schehr told the E-Commerce Times. “It’s still not something that people do regularly — maybe once or twice a quarter, on average.”

Who’s Shopping

According to the study, online shopping is especially popular among Web usersage 25 to 44. More than half — 53 percent — of 25- to34-year-olds use the Internet to make purchases, and51.2 percent of 35- to 44-year-olds are Web buyers.

Another unsurprising finding was that those who havemore spend more. Among individuals making morethan US$75,000 a year, 49.1 percent made purchasesonline, compared with just 26.1 percent of those with anannual income of less than $15,000.

But lower-income householdsare adopting the Internet more quickly than their richercounterparts, the study found. Between December 1998 and September2001, Internet use by individuals making less than$15,000 grew 25 percent annually. Web use by those in thehighest income group increased just 11 percent.

Show Me the Money

In addition to online shopping, Web banking is on therise. In September, 21 percent of the total U.S. population– not just Web users — made online purchases, and 8.1 percentbanked online, up from 14 percent combined in theprevious study.

Men were more willing to trust the Web for moneymatters than women were — 12.6 of male Internet users traded online,and 19.3 percent banked on the Web. Just 5.3 percentof wired women traded, and 16.5 percent banked.

Other Online Activities

The most popular use of the Internet was sending andreceiving e-mail. Eighty-four percent of U.S. Web users — 45.2percent of the total population — used it for thatpurpose.

Looking up information on products, playing games and checking news, weather and sports all were morepopular Internet activities than making online purchases. But buyingonline beat out online banking and job searches.

Growth Expected

“To the extent that product/service purchases, onlinetrading and online banking represent consumersengaged in e-commerce, that activity is fairly strongand growing,” the report said.

According to GartnerG2’s research, revenue fromonline product sales — not including financialservices or travel — is up to about $30 billion to$40 billion annually.

In 2001, revenue from online shopping grew 40percent over 2000 revenue, and Schehr said he expects to see asimilar or slightly higher increase in 2002.

“As the economy strengthens, online buying will strengthen,”he noted.

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