Buyers taking dollars online

Online shoppers are buying less from print catalogs and stores in the physical world, according to a new research survey slated for release tomorrow.

Cyber Dialogue predicts some physical stores may close this year and that successful online stores may even open shops in the real world.

The Cyber Dialogue findings follow last month's announcement from Egghead Software that it is shuttering 80 storefronts to become an online-only software retailer.

The Cyber Dialogue survey found that 19 percent of purchasers said they were shopping less in stores and 14 percent said they were using catalogs less often.

One specialist in retail and a real estate expert said even a small shift in buying patterns can hit a store's profits hard.

"The marginal shift of store sales to cyberspace will force retailers to change their store-based sales strategy and cause real estate investors to cringe," said Mark Borsuk of Real Estate Transformation Group. He sees Egghead's exit from brick-and-mortar stores as a symptom of how online stores will change the entire world of retailing.

Cyber Dialogue found that high-income individuals were more likely to buy online than other online users and that 47 percent of online buyers described themselves as "very satisfied," with another 48 percent saying they were satisfied with the experience.

Those satisfaction ratings echoed results of a PointCast survey of its generally high-end users right after Christmas. PointCast's email survey found that 80 percent of those who made online purchases were very satisfied, with 19 percent just somewhat satisfied.

Cyber Dialogue is predicting that physical locations for items popular in Internet commerce--books, clothing, cars, computers, insurance, and investments--may close or otherwise change dramatically. Some physical stores may add Internet kiosks, the firm predicted, as some auto dealerships have already done.

Among other Cyber Dialogue findings are the following:

Seventy-one percent of Netizens use the Web to locate information on products they are interested in, mirroring an earlier study by Ernst & Young for the National Retail Federation that suggested the Internet is changing how consumers make purchases.

The higher their income, the more likely online individuals were to shop or retrieve product information online. For Net users with household incomes of $75,000 or more, 39 percent had purchased online in the last year, compared to 27 percent of users with household incomes of $40,000 to $75,000 and 22 percent of users in income households under $40,000.

As for collecting product data online, 81 percent of high-income households had done so, compared to 72 percent of households with incomes of $40,000 to $75,000 and 61 percent of users with incomes under $40,000.

Despite security worries, nearly two-thirds of online purchasers used a credit card online in both 1996 and 1997.

Online shopping also can boost conventional stores and direct marketers. After researching products online, 25 percent completed an order by going to local stores, 25 percent placed an order by phone, and 17 percent placed an order online.

Nearly 30 million Americans age 18 and older research personal products and services online in 1997.

Eleven million adults, or 27 percent, bought something online. Online purchases exceeded $3 billion last year.

Last year, Cyber Dialogue bought the online research practice of Find/SVP and is continuing its new media research efforts.

Internet news copy editor Beth Lipton contributed to this report.