Report: Online Shopping Desire Overrides Privacy Concerns

A new survey of U.S. consumers conducted by Market Facts, Inc. reveals that privacy and security concerns still top the list of issues for Internet shoppers. The good news for online retailers is that these concerns are, by no means, a barrier to the explosive growth of consumer-driven e-commerce.

While the general issues covered by the survey confirm what many e-commerce insiders already know, some surprising results were reported.

According to the survey, women had more privacy concerns than men, married couples had more online shopping concerns than singles, and the more affluent and better educated respondents were more concerned with online security than their counterparts.

The survey polled 1,000 Americans in the period of January 5-6, 1999 and was sponsored by advertising-supported Internet Service Provider, NetZero. According to the company, the goal of the research was to pinpoint Internet users’ main “issues and concerns” about shopping online.

Although the most popular response was “privacy and security” (cited by 53% the sample group), other issues included:

• Can’t inspect product closely (20%)
• Don’t know how/too complicated (6.4%)
• Don’t want to wait for delivery (3%).

Of those polled, approximately 13% indicated they do not have any concerns about shopping online.

According to Ronald T. Burr, CEO of NetZero, “The value and convenience that shopping with mouse and modem provides far out weigh any security downside. Where privacy is concerned, as long as you assure the customer that his or her personal data will not be mishandled, they feel comfortable.”

Survey Says

A demographic breakdown of survey respondents showed differing shopping habits among the various consumer segments. Here are some interesting results:

• Women were more likely than men (56% vs. 49%) to have apprehensions about privacy/security issues related to shopping on the Internet.
• Married folks were more likely than single (57% vs. 47%) to have concerns about online shopping.
• Respondents in the 35-44 age group (64%) were more inclined to have privacy and security concerns, while those in the 65+ age group (23%) had the least — probably because they’re least likely to shop online (around 7% according to a prior Market Facts study).
• The higher degree of education, the more concern about online security: 42% for those with high school or less, 59% for college, and 65% for post-graduates.
• The number of men who cited waiting for delivery a concern (4%) was double that of women (2%).
• The greater the individual’s household income, the more he or she is concerned with security issues, ranging from under $15K (34%) to $50K+ (63%).
• Regional differences indicated those in the Northeastern U.S. (56%) were more disquieted by security issues that those in the Western U.S. (47%).
• Interestingly, only 2% of respondents in the Northeastern U.S. said they did not know how to make an online purchase, compared with 9% from the Midwestern states.

Giving Credit Where Credit Is Due

NetZero, Inc., which sponsored this survey and published the results, offers consumers nationwide free Internet access and e-mail. Using the model of commercially supported network television and radio, NetZero’s revenue is generated through advertising and e-commerce sponsorships.

Based in Westlake Village, California, NetZero is funded by Draper Fisher Jurvetson, Foundation Capital, and Idealab Capital Partners. The company also maintains strategic alliances with AGIS, NetGravity, and GTE. A copy of the results of the survey is available from NetZero by calling +1 (818) 719-9299.