Wired shoppers expected to surge, but
security worries remain
By CHRIS ALLBRITTON
Copyright © 1997 Nando.net
1997 Associated Press
NEW YORK -- Black Friday -- traditionally the busiest shopping
day of the year -- has come and gone, and the holiday shopping
season is in full swing with Scrooge-y shoppers and massive crowds.
But instead of hopping in the minivan and heading to the mall, more
consumers are firing up the modems and shopping in the living room.
Online shopping is experiencing the biggest year of its brief
tenure. Until now, there weren't enough people or products to make
online retail a moneymaking business.
In 1997, the Net grew from 27 million to more than 40 million
online, according to IntelliQuest Information Group and Zona
Research. America Online topped 10 million subscribers in November,
and the average income of Web surfers fell as more people came
online. With the surge of new people, established retailers such as
Wal-Mart and the Gap hooked up, too.
"This quarter is going to be the biggest quarter ever" for online
sales, said Andrew Kantor, editor-in-chief of Internet Shopper, a
magazine catering to the digital consumer. "Online shopping is
hitting the mainstream and real, honest-to-goodness ordinary people
are shopping online."
Jupiter Communications, an Internet consulting firm in New York,
is projecting $1.14 billion in fourth quarter sales out of an
expected $2.6 billion in total online sales for 1997. Forrester
Research in Cambridge, Mass., is a little more cautious, projecting
between $750 million and $1 billion in holiday sales and $2.4
billion for the year.
This is just a drop in a very large bucket, however. Holiday
sales online and off- are expected to be about $660 billion this
Most of the products being bought online this year are computer
hardware and software, books, music, flowers and travel tickets,
according to Forrester. When Forrester polled 300 consumers, they
found that 58 percent had bought computer hardware or software, 46
percent had bought books and music, and 26.3 percent had bought
gifts, flowers or greeting cards. Twenty percent had purchased
Sreenath Sreenivasan, who teaches new media at the Columbia
Graduate School of Journalism in New York, said he has used the Net
for most of these products and has spent "hundreds of dollars" on
travel tickets and books.
"It's a very convenient way to shop," he said. "You don't have to
worry about store hours."
In addition to convenience, Sreenivasan said he didn't have to
elbow his way through the holiday crowds or deal with rude sales
"The Web is as personal -- or impersonal -- as any shop at this
time of the year," he said.
Even with all the benefits of stay-at-home shopping that catalog
companies such as L.L. Bean and Eddie Bauer have enjoyed, Web
shopping hasn't really been the "killer application" that many in
the high-wired industry predicted.
Until recently, security concerns were prevalent and both
Netscape Communications and Microsoft Corp. built strong scrambling
software into their browsers to prevent thieves from nabbing credit
Stuart Spiegel, vice president and general manager of iQVC, the
online companion to the cable shopping channel, said as big brand
names come online, more people will feel comfortable shopping
Concern about security, Kantor said, is "moot. It's dead."
And once a consumer has tried online shopping, said Spiegel,
Still, Forrester's poll showed that 26 percent of respondents
have concerns about security. Robert Warbington, an operating
engineer for Lion Oil in El Dorado, Ark., said he was worried about
using credit cards on the Net.
"I've only been on the Internet for a year, and I'm still
concerned about using a credit card online," he said. Instead, he
sends checks or money orders through the mail.
An avid movie collector, Warbington bought from Reel.com, an
online video store. He said if more online merchants made it easy to
mail payments, their sales might increase.
Lucy Maher, an associate production editor at Warner Books in New
York, bought a fleece jacket from L.L. Bean's online site even
though she was a little nervous about using her credit card.
"I'm not that savvy enough to know how someone could get it (the
number)," she said "But I've heard it's not the most secure system."
But security wasn't a top worry for Greg Merrell, a network
consultant in Cupertino, Calif.
"It's the same level of risk -- or lower -- as handing my credit
card to a random person at a restaurant," he said.
Merrell said he was a "low to moderate" shopper and had bought
almost $2,000 worth of travel tickets, books and software this year.
Maher, Merrell, Sreenivasan and Warbington are all typical in one
sense: They knew exactly what they wanted when they went online.
Forrester calls this "surgical shopping." More than half -- 55
percent -- of all online purchases are made in this manner.
Maher said she didn't have the printed catalog, but knew exactly
which jacket she wanted. Warbington had specific movies in mind.
Sreenivasan and Merrell knew what books or software they wanted when
they zipped their credit card numbers into the ether.
Regardless of online buying habits, Forrester predicts online
shopping will change the rules of retail. More than $17 billion will
change hands online in 2001. While only one in four of today's 40
million wired citizens shop online, by 2001, there will be 43
million people shopping online, slightly less than half of the
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