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Saw it Online, Paid For it Offline

A study released on 19-Oct-2005 found that people are using the Internet to help make up their minds about what they buy in stores.

Researchers found that more than half of the 322 shoppers who bought electronics products had gathered info online before buying something at the store. Half of this group had spent from one to three hours doing research on the Web.

"People are using the Internet not only to gather information about brands, but about product selection and variations of products and pricing," said Chris Kenton, senior vice president of the CMO Council, an industry group of marketing executives from around 1,500 technology companies.

Kenton said that a sample of more than 300 people is considered a good sample for an exit poll study. The Summer RetailFluency Report was commissioned by Yahoo and fielded by the CMO Council and the ConsumerEdge Research Group.

In June, researchers polled shoppers on their way out from BestBuy, CompUSA and Circuit City stores with purchases in-hand. The idea was that June might be an especially hot month for electronics gifts for Father's Day and graduations. Shoppers were asked about the products they purchased, how their purchase was influenced by various information sources, how much time they spent researching their purchase on the Web, and whether or not their purchase decision was changed after they entered the store.

Brand played a larger role for those who did Internet research than for those who didn't. Overall, sales clerks were the most influential information sources; 49 percent ranked them as first. Second was in-store sales associates (36 percent); third was family and friends (33 percent). The Internet ranked fifth overall, with just 21 percent of shoppers saying it was most influential. Magazines, TV and radio were last, garnering just 4 or 3 percent each.

This is great news for Yahoo, which has long wooed brand advertisers; in its most recent conference call with analysts, CFO Susan Decker said that large consumer packaged goods companies still contribute the lion's share of ad revenue.

A Yahoo spokeswoman said the company had funded the study to help its brand advertising clients understand the correlation between online and offline behavior.

Kenton said the study revealed how much credibility Internet information now has, coming almost to parity with friends and family as a trusted information source. "One reason may be that you're more likely to find people online who have a greater education and awareness about a product than you can find in daily life," he said. "You can tap into people who are enthusiasts."

Web research seemed to help shoppers make up their minds before hitting the store, Kenton said. Non-Internet users felt more impact from sales clerks than did online searchers.

The retail environment has been carefully constructed to influence and incite purchases, he pointed out. "What appears to be happening is that when people do research online, they narrow the parameters around the decision they make. They still want to go into store and experience the products, but they're not as wide open to influences over those decisions," he said.

When asked to rate influenced their purchase decisions, both online searchers and non-Internet users rated price first by a long shot (69 and 63 percent, respectively). The knowledge of store personnel was rated second by both groups, as well. However, those who did no online research didn't mention brand reputation, while 38 percent of online looky-loos said brand attributes were an influence.

Kenton said that the study showed that, while in-store activities had the most influence in buying decisions, the Internet had a significant impact on building brand awareness and pre-purchase intent.

"[Online], people familiarize themselves with brands and the brand promises being made. When they walk into the store, they have those brands in mind," he said.

For those who used the Web, the top online influencers were the product/company Web site (47 percent), search listings (41 percent) and retail store sites (39 percent). Just 11 percent named banner ads as an influential source.

When it came to search engines, the gap between Yahoo and Google closed. Google maintains a strong lead over Yahoo when it comes to all searches, according to the latest rankings from Internet audience measurement firm Nielsen/NetRatings, handling 45.1 percent of all searches, versus Yahoo's 23.3 percent. But when it comes to shopping-specific search, according to this survey, Google delivered 34 percent of searches for these shoppers, while Yahoo handled 31 percent, a difference ConsumerEdge said was not statistically significant.

That could be due to Yahoo's keen focus on shopping. Offerings include GiftFinder, launched in April 2005. In November 2004, it added what it called "precision browsing" to help online shoppers hone in on product attributes.

According to Kenton, the survey showed newspapers playing a very specific role. Shoppers either rated it as the top influencer, or didn't mention it at all.

"Newspapers seem to be largely marginalized to driving store traffic, while radio, TV and magazines seem to be driving brand awareness," he said. "The Internet seems to be driving all of those things."

 

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