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Study: Price driving e-commerce

Price, not security, is the main reason Netizens are hesitant about conducting transactions online, a new study says.

Price, not security, is the main reason Netizens are hesitant about conducting transactions online, according to a study released today.

The study, conducted by market research firm Jupiter Communications and NFO Interactive, showed that 65 percent of an estimated 60 million Netizens have not yet bought anything online.

However, a large percentage of the sampled Web users indicated they would purchase goods online if Web sites introduced more discounts.

Seventy seven percent of users who said they browse--but don't buy--when they go to commerce sites said lower prices would get them to begin shopping online. The same held true for those who said they never go to e-commerce sites--of those, 64 percent said lower prices would entice them to buy online.

The findings also showed that surprisingly, Web security was not a central concern either among repeat shoppers or nonshoppers, said Jupiter analyst Evan Cohen.

"For buyers, [Web security] is really much less of a concern," said Cohen. "The ability to find products online is more important."

But that doesn't mean security doesn't matter. Though consumer confidence in shopping online has increased with the proliferation of commerce sites, recent studies have shown that Web security remains a serious issue.

For example, a survey released last month showed that security breaches increased over the past year among Web sites selling products or services online. The study also showed that e-commerce sites had more incidents of security preaches than noncommerce sites.

Industry analysts also fear that while many users are comfortable with e-commerce, it is still in its developmental phase and a high-profile security breach could discourage potential buyers--especially among the masses who are not yet online.

The Jupiter study also showed that the online shopping population is growing. A majority of the Web users who do shop online seem to be satisfied with their purchases, since 95 percent of them intend to continue buying online, the study said.

Internet companies are increasingly centering their business strategies around selling goods and services. Some of the largest Net retailers, such as, have invested in exclusive, multimillion-dollar partnerships to reach a broad audience, such as that provided by America Online.

Besides price discounts, the study also found that Web users depended heavily on online information and research to make shopping decisions. Many sites have based their strategies on the fact that not everyone who shops online actually buys. For instance, many retailers with an on- and offline presence see a benefit in giving as much information as possible, even if it does not result in a buy.