Monday, July 21, 2008

Australians More Likely to Purchase Online

A new study reveals that consumers in Australia and New Zealand are more likely to make online purchases than shoppers anywhere else in the world. 

The study continued over a period of six months and looked at over 72 million online shopping sessions, specifically focusing on the habits of about one million ANZ users. 

The research found a conversion rate of 4.4 purchases per 100 online sessions for Australia and New Zealand, which sits way above the global average of 2.96. 

"The US and UK are thought to be the most tech-savvy, but the conversion rates suggest otherwise when it comes to e-commerce. US consumers tend to place 3.3 orders every 100 sessions, while the UK only place an average of 1.7."

"The significantly higher conversion rate of Aussies and Kiwis suggests consumers in the region are much more confident and comfortable with buying online than previously thought," said Kevin Mackin, general manager for Coremetrics ANZ, who conducted the study.  The study also found that it is the companies utilising this enthusiasm for online shopping who are experiencing the most benefit.

Sites who provide online consumers with things like extra relevant content and third part recommendations are seeing higher pages views and longer visit times.  Adding those little extras could prove to be extremely valuable to companies with an ANZ online customer base, as the study also found that consumers in the region spend a significant amount of time making purchase decisions. 

"Another point to consider is that while Aussies are consistent with the average viewing time of 7.5 minutes per session, UK and US shoppers are making their decisions 1-1.5 minutes faster," said Mackin.   "There’s strong reason to believe that this indicates a more considered online buying approach from ANZ consumers – an excellent reason to enhance the ‘stickiness’ of your site today."  Mackin suggests that companies capitalize on ANZ customers’ tendency to stick around by not just focusing on how to attract visitors to the site, but to make sure they have a good experience once they get there.

"It seems that we’re only just beginning to think about search engine optimisation, when really we need to focus equally on engaging and retaining site visitors," he said.  "It’s OK to attract them to your site but it’s what you do with visitors once they arrive that’s going to make or break the sale."

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Travelers - "Price Beats Brands...When Times Are Tight"

Travelers Eye Prices Online
JULY 21, 2008

Price beats brands when times are tight.

More than four out of 10 US nonbusiness travelers surveyed expect to reduce the number of trips they will take in the coming year as a result of the economy, according to a June 2008 Destination Analysts' "The State of the American Traveler" survey. Nearly three out of 10 said they would spend less for their recreational trips in the next 12 months, nearly double the percentage that said so 12 months ago.

In the past 12 months, 23.6% of leisure travelers said they had taken a "staycation"—a vacation spent at home—in response to gasoline prices. Nearly three out of 10 said they planned to do so within the next 12 months.

"With more than half of travelers saying they will actively look for travel bargains and discounts and another third saying they will visit less expensive destinations, affordability is certain to be top-of-mind," said Erin Francis, managing partner at Destination Analysts, in a statement.

Several types of travel services were researched and purchased online by at least one-third of respondents, including destination information, hotel rooms and airline tickets. Only about one-fifth of recreational travelers went online for car rentals.

Fully 72.2% of Internet users in the US named the Web as their primary source for travel research in June 2008, according to a Prospectiv study.

The focus on value matters because price trumps brand in an economic downturn, according to a survey of consumers in the UK conducted by Loudhouse and RightNow.

Nearly eight out of 10 Internet users surveyed said that prices drove their purchase decisions during times of economic uncertainty. More than seven out of 10 also said that price and good online user experience were the second-highest-influencing factor on where to buy a product. Brand pedigree, product uniqueness and reputation were listed as least influential.

"Brands selling directly to the consumer be warned; as the credit crunch deepens and spending decreases, offering 'sweeteners' to consumers is only half the survival story," said Joe Brown, general manager at RightNow, in a Travolution article. "They won't tolerate corners being cut when it comes to customer service."

Although most travelers are getting budget-conscious, the luxury travel segment has yet to feel a slowdown, according to a July 2008 USA Today article. The article cited D.K. Shifflet & Associates' claim that households earning $100,000 and more now account for about one-third of hotel stays. "High-end is holding its own right now," Doug Shifflet, CEO of D.K. Shifflet, told USA Today. "But if the economy doesn't improve some, then it's going to start to see an additional slowdown."

eMarketer's US Travel Online: Planning and Booking report will be published next month. Click here to be notified when it is released.

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More On the Online Shopping Market in China

Fan Huiwen writes for the China Economic Net on the gaining popularity of shopping online...

Online shopping gets popular with ordinary folks

By Fan Huiwen

In recent years, the e-shopping via Internet has been developed rapidly and has become an innegligible component in the e-business. E-shopping is a kind of online purchasing behavior of terminal purchasers, and consumers' shopping occupies most.

The fast development of e-shopping indicates that the core of e-shopping begins to transfer from B2B (business to business) to B2C (business to consumer) and C2C (consumer to consumer), and the e-shopping shows a new trend of popularization.

For most of e-shopping, commodities will be chosen online, purchase orders will be signed and commodities will be delivered to customers' doorsteps via logistics distribution, so the transaction cost is low, the e-shopping is convenient and prompt, and consumers will save the time of looking around marketplaces. As there is no need to rent storefronts for online shops, the operating cost is low and the price of commodities is relatively low, which enable purchasers to enjoy benefits. In large cities with a relatively high Internet penetration rate, e-shopping is more and more favored by people and becomes a fashionable life style quickly.

For the moment, China's e-shopping market is provided with the following characteristics: Firstly, the e-shopping scale keeps enlarging. According to related statistics, by the end of December 2007, the proportion of netizens' online shopping in China is 22.1 percent, and the purchaser population achieves 46.4 million. And the online shopping proportion of such netizens with Master degree or above has reached 56.5 percent. The scale of e-shopping market is RMB56.1 billion yuan with the growth rate of 117.4 percent year on year. This indicates that the penetration of Internet drives a rapid growth of e-shopping. E-shopping websites keep improving transaction modes, and consumers' acceptance degree to the e-shopping is enhanced increasingly.

Secondly, the transaction amount of B2C and C2C accounts for the most part of the total transaction amount of e-shopping. E-shopping contains the purchasing of terminal consumers and the commodity transfer between consumers, as well as the online shopping of part of manufacturing operators. In 2007, the transaction amount of China's C2C e-shopping hit RMB51.8 billion yuan, up 125.2 percent than the one in 2006. The transaction amount of took up 83.6 percent of C2C e-shopping, ranked No.2 with the transaction amount of 8.7 percent, and ranked No.3. In 2007, the transaction amount of China's B2C e-shopping hit RMB4.3 billion yuan, up 92.3 percent than the one in 2006. The transaction amount of ranked No.1 with the transaction proportion of 83.6 percent, ranked No.2, and No.3. This illustrates that consumers' purchasing takes up a main position in the e-shopping.

Thirdly, the commodity scope of e-shopping is expanding increasingly. The early and mainly operated books and video products. In recent years, their operation scope has been enlarged continuously, till now; has expanded its commodity scope to 20 classifications and more than 700 thousand types. Except selling books, magazines and videos, is also involved in selling mobile phones, cosmetics, garments, shoes and hats, whose commodities have been rich in variety. The commodities of e-shopping have also broken the restriction of only providing tangible commodities, and expanded to digital products and services, so many professional websites supply the commodities in terms of digital content and network service.

Additionally, female consumer products occupy an important position in the e-shopping market. With the gradual transferring from e-shopping commodities to life consumer products, such female consumer products as cosmetics and garments become well-selling commodities. According to the statistics, the transaction amount of e-shopping of Shanghai netizens in 2007 is RMB7.01 billion yuan, ranking No.1 in China. And the commodities purchased by the Shanghai e-shopping group most are such female beauty supplies as cosmetics and perfume. Meanwhile, the commodities with the greatest quantity growth of e-shopping in Shanghai are female underwear and lady-used cases and bags; these data throw out female e-shopping group's scale of purchasing power. The female consumer product market is being paid more and more attention to by e-shopping websites.

With the popularity of Internet in the future, China's e-shopping transaction amount will keep a rapid growth, C2C will keep being the main driving power for the e-shopping growth, the commodity variety of e-shopping will be enriched further, and the attraction of online shopping communities to network subscribers will be stronger and stronger.

According to the research of CCID Consulting, by 2010, China's e-shopping transaction amount will be close to RMB400 billion yuan with the annual growth rate of above 60 percent. The driving factors of the rapid development of e-shopping include: a fast economic growth and a further improved residents' consuming level; Internet popularization and netizen increase in the second and third line cities; gradual classification expansion of e-shopping commodities; the participation of such new operators as; the improved safety environment in terms of payment, logistics and online shopping, etc.

At the same time, on the present basis, the classification of e-shopping commodities will expand to all commercial fields. Seen from the hotspot and the trend in e-shopping market, the classification of e-shopping commodities will be enriched on the basis of such classifications as books and magazines, videos and music, mobile phones, cosmetics, and garments. The online reservation for various commodities and services just start to expand. The online group purchasing develops rapidly. Such commodities as consumer durables (such as autos), consumer products with a huge amount (such as houses) and luxury products (such as diamonds) also start to play important roles in e-shopping. These commodities will show an obvious elevation function for the sales volume of e-shopping.

What's more important is that the attraction of online shopping communities to network subscribers becomes stronger and stronger. Investigation indicates that more and more online consumers have begun to conduct transaction from purely via B2C platform to via C2C platform, and the trend of B2C subscribers' transferring to the C2C community is evident.

So to speak, the e-shopping represents the development orientation of commodity transaction in the information era, and China's e-shopping is very promising.

(The author is Director of Informatization Research Center of China Center for Information Industry Development)

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