Abstract
The recent stagnation of electronic commerce highlights the need to understand contemporary online consumer behavior. E-commerce’s slow growth has coincided with an explosion in the usage of Web 2.0 activities. These novel online venues have created many new channels for online retailers to reach buyers, yet these online activities have gone largely unstudied. This study incorporates current user demographics and Web 2.0 activities to dynamically model the determinants of two key measurements of recent online shopping, a recent purchase and the novel dependent variable, percentage of income spent online. Regression analysis is applied to a nationally representative 2007 survey of the U.S. online population. Determinants of a recent online purchase include, ownership of a credit card, PayPalTM account, listening to podcasts, participating in online auctions, and for the first time, female gender. In a second regression, positive determinants for the percentage of income spent online include, male gender, educational attainment, online auctions, instant messaging, and online dating. Online spending increases with time online, and appears to compete with other forms of online entertainment and social networking. These results produce snapshots of contemporary online shoppers that can be used by electronic retailers to determine which product characteristics to highlight for greatest impact, and to efficiently target specific Web 2.0 activities, such as entertainment, podcast and social network websites, to develop new and robust marketing platforms.
Highlights
The number of Internet users in the U.S has almost doubled over the last eight years to approximately 220 million in 2008 (Nielsen 2008) with over 70% purchasing online (Pew Internet 2009a)
The results show that marketing preferentially to high earners and increasing access to credit cards or PayPalTM accounts should increase the adoption of online shopping
Economic data are not available, online deferred purchases are relatively large and possibly account for an increase in a user’s online spending. These results suggest that online retailers should provide more methods for buyers to establish and utilize online deferred payment accounts, focusing less on PayPalTM and other similar payment systems
Summary
The number of Internet users in the U.S has almost doubled over the last eight years to approximately 220 million in 2008 (Nielsen 2008) with over 70% purchasing online (Pew Internet 2009a) This expansion in the Internet population has coincided with an explosive increase in the online usage of Web 2.0 activities such as social networking, video sharing, and other entertainment sites. These novel online venues have created many more channels for online retailers to reach buyers. The percentage of online consumers has remained steady at about 70% since late 2004 (Pew Internet, 2008b) when online buying represented 2.5% of national retail sales (U.S Census Bureau, 2008). We explain how these variables provide the methodological foundation for the models
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