ONLINE CUSTOMER BEHAVIOR

In the late 1990s online shoppers were mainly

well-educated, high-earning, twenty- to forty-

year-olds. By 2003 online shoppers

represented a broader demographic, with an

average age of forty-four years and an average

annual household income of $65,000. Of these

shoppers, 50 percent were female and 50

percent were college graduates. According to

a 2004 report from the U.S. Department of

Commerce, in 2003 searching for product/

service information was the second most

popular online activity after e-mailing or

instant messaging and 77 percent of U.S.

Internet users age fifteen and older shopped

online. E-customers researched products and

services that they were considering for

purchase online. Their final purchases,

however, may not have been made online.

Several reasons are behind the reluctance to

purchase online. Studies published in 2003

and 2004 reported that 25 percent of e-

commerce sites do not display a phone

number clearly on the customer service page;

49 percent of online shoppers could not

readily find the answers to a question; and 88

percent of shoppers abandoned their online

shopping carts before reaching the checkout.

The Yankee Group, a Boston-based research

firm, indicated that up to the first quarter of

2003, the average conversion rate from

shopping in brick-and-mortar stores to buying

on e-commerce sites was just 10 percent.

E-customers' most serious concern is security

and privacy, followed by price, delivery cost,

return policy, customer service, site design,

navigation, one-click shopping, and

personalization. E-marketers must assure

customers that their sites use cybercrime-

proof systems to protect ecustomer

information and clearly display the security/

privacy statement on their sites. Competitive

prices, discounts, e-coupons, free delivery, and

standard return policies motivate initial online

purchases and repeat purchases.

Nevertheless, requiring too many mouse clicks

for navigating on a site, a lack of easily

accessible help, technical difficulties, and

requesting too much customer information for

purchasing goods often causes shoppers to

abandon their online shopping carts before

reaching the checkout.