Most online shopping done by a few

December 2, 2005

Do you ever get the feeling that just a few people are doing most of the online shopping? Well this looks to be true, reports analyst firm Nielsen//NetRatings, which released a survey Friday showing that the heaviest online buyers represent only 18 percent of online shoppers but account for 46 percent of online spending.

Nielsen has dubbed these ardent shoppers "Most Valuable Purchasers" for their spending more dollars online and making more purchases on the Internet compared to the rest of the online buying population.

The study segmented online shoppers into four categories based on the amount of their online spending (low or high) and their frequency of purchases (low or high). According to Nielsen, in addition to the MVPs who comprised 18 percent of the online buyers, those spending the fewest dollars online and making the fewest purchases made up the majority, or 55 percent, of online buyers; this group accounted for 21 percent of online purchases.

"Each retailer needs to analyze its own customer base to identify its respective MVPs and develop targeted marketing programs that will maximize revenue from these shoppers," said Heather Dougherty, senior retail analyst, Nielsen//NetRatings. "Not only are the MVPs valuable based upon sales and number of purchases, they are also inordinately loyal to the retailers that they purchase from."

The Nielsen study added that MVPs are heavy users of comparison-shopping tools as compared to other online buying segments. Also, not surprisingly, they tended to come from higher-income households.

They are also more likely to be connected via a broadband connection and are heavier Internet users in both overall time spent online and time spent on retail Web sites, the study reported.

"Customer acquisition strategies need to include a combination of broad reach marketing tactics, including search and comparison shopping tools, as well as targeted Web sites that are frequented by the MVPs," added Dougherty. "Online retailers also need to tailor loyalty programs that reward the MVPs for purchasing at their sites to drive repeat sales and maintain a strong relationship with these valuable customers throughout the year."

According to Shop.org, a division of the National Retail Federation, 58.9 million consumers were forecast to hit various retail sites on the Internet for "Cyber Monday" this week, which analyst have been predicting as one of the biggest online shopping days of the year.

A recent Shop.org survey reported that one-third of those surveyed (37 percent), said they would use Internet access at work to browse or buy gifts online this holiday season. The survey found that more than half of young adults 18-24 (51 percent) and nearly half of those 25-34 (49 percent) will be shopping online during work hours.

The survey also found that men (42 percent) are more likely than women (32 percent) to shop at the office.

The recently introduced Akamai Net Usage Index for Retail -- created by Akamai Technologies -- reported that for "Cyber Monday" peak online shopping traffic reached more than 1.8 million visitors per minute in North America and over 3.1 million visitors per minute worldwide.

Copyright 2005 by United Press International

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