Hacker Attacks Dampening E-Commerce Enthusiasm

While new research by PricewaterhouseCoopers shows that low prices continue to lure U.S. shoppers to the Internet, data from @plan (APLN) indicates that U.S. consumers are taking security issues seriously enough to consider abandoning e-commerce for the safety of the real world.

Consumers Expect Lower Prices Online

Big promotions and word of mouth have led Internet shoppers to expect lower prices. Over half of Internet users, according to the PricewaterhouseCoopers survey, expect prices to be lower when shopping online, and three-quarters of respondents would buy more online if prices went still lower.

So how important is price? More than half of respondents cited it as the most important consideration when shopping for big ticket electronics, apparel, groceries, and media products. Other important concerns for online shoppers are brand name and selection. Surprisingly, ease of shopping, delivery time, and service are seldom considered important.

Shipping and handling charges play a big factor in whether customers view online prices as lower than prices in brick-and-mortar stores. Almost half of Internet shoppers view online prices as lower when shipping and handling are left out of the equation, but only 25 percent see Net prices as lower when shipping and handling charges are taken into account.

Even though price is a prime concern for online shoppers, most do not use online price comparison engines to get the lowest price. Only 14 percent have ever used a “shopping bot” and only five percent used one on their last purchase.

Security a Concern

Although online shoppers love a bargain, the recent spate of hacker attacks has shaken consumer confidence. The latest @plan Internet poll shows that almost 40 percent of Internet shoppers aged 18 and over are less likely to make a purchase online in the future and nearly 47 percent of those who have not shopped online in the last three months are not likely to start now.

The poll also shows that 85 percent of surfers view the privacy of information transmitted online as the most important Internet issue.

“Any way you cut it, these results indicate a real warning sign for e-retailers. Consumers are clearly alarmed by these recent hacker attacks and, according to the survey, most online consumers are indicating that the onus to resolve these problems falls squarely on the shoulders of the online industry,” said @plan chairman and CEO Mark Wright.

However, in an exclusive interview with the E-Commerce Times, Mary Brett Whitfield, Principal Consultant and Director of PricewaterhouseCoopers’ E-Retail Intelligence System, said that the @plan survey shows that only nine percent of shoppers are “much less likely” to shop online.

Whitfield views the 31 percent who said they were just “less likely” to spend money online as a “swing vote” and believes that “once security concerns die down, they’ll go back to shopping online.”

Keeping Customers Online

No one believes that consumers will totally give up shopping online as a result of security concerns. According to Whitfield, the recent security concerns have caused a “temporary dampening of enthusiasm for purchasing online.”

Whitfield added that it is “important that the site’s security and privacy policy be featured prominently.” She said that Web shoppers might not take the time to read the fine print, but find it comforting to be able to find privacy and security policies.

Whitfield also said that “The most successful e-retailers will combine low price points with a site that is easy to shop, features a wide selection of merchandise, and offers superior customer service and fulfillment capabilities.”