Study: To Online Shoppers, Price Is Everything | MediaPost

WITH UNCERTAINTIES ABOUT THE ECONOMY creeping into more and more holiday purchase decisions, a new survey of online shoppers finds that price trumps everything. About 43% of online shoppers say a product's price is the most important factor in making a purchase, according to the poll conducted by Synovate of Chicago for Guidance, a technology advisor based in Marina del Rey, Calif. And 18% named free shipping.

"Because newer online retailers can focus on market share and revenues and not profitability, they are an emerging threat for brick-and-mortar retailers," says Jason Meugniot, Guidance president and CEO. "Endless.com., for example, can give customers $5 for the privilege of shipping to them overnight. That makes it tough for a brick-and-mortar retailer, which may be generating less than 10% of growth online, to compete."

When the same respondents were asked to select their second-most important factor, 41% chose free shipping, and 24% named price. A much smaller number--just 8%--mentioned special promotions or coupons are the most important factor, 7% cited features (such as recommendations or product reviews), and 4% said speed/efficiency of checkout is most important. And that in-store pickup and return option, so highly touted by many retailers? Just 1% said that is most important to them.

While it's no surprise that the economy is driving such bargain hunting, Meugniot says, there were some surprises, including who's buying and who's not. Nearly 19% of the total sample said they don't buy anything online (22% of men and 16% of women.) That's significant, since all the 1,000-plus poll participants are online. And those who were most likely to rank price as No. 1? The highest income brackets: 53% of those earning $50,000 to $75,000 named price as most important, while just 37% of those earning less than $25,000 did. Those in the South (46.5%) place greater emphasis on price than those in other regions.

Eggheads go for free shipping: Nearly 26% of those with graduate degrees ranked free shipping first, compared with 14% of those with high school or less.

While price may currently be top-of-mind with many shoppers, Meugniot says, and retailers should certainly be mindful of the demand for lower prices and free shipping, "increasingly, it's becoming clear that consumers want multi-channels--a store experience, an online experience, and maybe a catalog experience. Retailers need to offer consumers as many ways as possible to understand and experience their products in a way that is compelling to the consumer."

// by Sarah Mahoney,
// Friday, Dec 14, 2007
// http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=72717&Nid=37404&p=412316