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Net a boon to offline shopping

The Internet is helping traditional purchases because consumers are using it to get product information, a new report says.

Everyone knows that people increasingly are going online to shop. According to a new study, however, that's only half the story: Right now, the Net is contributing more to commerce offline than online.

Consumers spent $3.3 billion shopping for goods and services online last year, said Peter Clemente, a vice president at research firm Cyber Dialogue and author of the report conducted jointly with Find/SVP. But consumers spent even more money--$4.2 billion--making offline purchases after getting product information online.

"There's no question that online shopping is measurably displacing traditional shopping behavior," Clemente said. "In fact, more dollars were spent by consumers making offline purchases after seeking product information online."

Clemente said that in the biannual report, Cyber Dialogue "wanted to really dissect the impact of online shopping. There's more going on here than simply going online and purchasing products because it's easier. Our intention here was to make some sense of all the numbers flying out there in the press about the size of consumer online commerce."

For instance, the Commerce Department recently predicted that e-commerce could grow to more than $300 billion by 2002.

In fact, the study found that 71 percent of people who go online are doing so to search for product information, rather than looking in local directories. In mid-1997, that number was only 43 percent.

Eventually many of those consumers will opt to buy products directly online, the firm predicted. But even if not all of them convert to online shoppers, the fact that they are using the Net to get information indicates how important the Net is becoming in the total consumer equation.

Some of the factors that kept people from actually completing the cycle and buying the products online included fears that their purchases would be insecure and that their private information would be taken and sold, Clemente said. Users also were put off from making online purchases because sites were difficult to use and because they failed to find the bargains online that they expected.

There also is always a percentage of people who like the personal face-to-face attention afforded to them in stores. But Clemente said that many of those who sought information online only to buy it off are likely to convert to online buyers. Those in the survey who purchased offline after looking online did so by placing orders via fax or phone or by going to a store.

Other findings of the report, in which 1,000 online and 1,000 offline consumers were contacted by telephone, include a finding that the demographics for online shoppers are similar to other online users--the majority are "likely to be male, upscale baby boomers who are married, about half of whom have children," according to the report. Most are what the report calls "knowledge workers." They also tend to be experienced Net users.

The survey also indicated that people are much more likely to find product information by using a search engine than by clicking on ad. Only 8 percent purchased online after clicking on an ad.

Products sold well online in the following order: software, books, PC hardware, and music. Many also used the Net to find new cars, the study found.