January 19, 2001, 12:00 AM

More Than 25% of Online Shopping Trips Fail

Don Davis

Editor in Chief

Internet users are rapidly becoming Internet shoppers, but purchase failures, security fears and service frustrations are rampant, according to study by the Boston Consulting Group.

The study found that 57% of Internet users have browsed online and 51% went on to purchase goods or services. Yet 28% of attempted online purchases failed, and four out of five online buyers say they have experienced at least one failed purchase attempt. The failures stemmed from technical problems, difficulties in finding products, and logistical and delivery snags after the sale.

"The first online purchase experience is the moment of truth for consumers and retailers. It is the beginning of a brand connection," said Michael Silverstein, senior vice president at Boston Consulting Group. "Unfortunately, too many consumers are finding that shopping online offers convenience fraught with compromise. The frustrations and failures that are commonplace in these early days of electronic retailing could be the kiss of death for the brands of Internet retailers."

Consumers satisfied with their first Internet shopping trip are likely to spend more time and money online, the study found. Satisfied first-time purchasers averaged 12 online transactions and spent $500 during the past 12 months; while the dissatisfied spent only $140 on four online transactions.

Among the barriers to shopping online, anxiety over credit card security topped the list. Sites that break down during the purchase also posed a major barrier, as well as a deterrent to further online shopping--28% of consumers whose online purchases failed say they stopped shopping online, while 23% stopped shopping the site in question and 6% stopped patronizing the retailer's physical store.

"Online consumers are not a very forgiving lot, maybe because purchasing online is so new for most of them that they are in a constant state of evaluating it," notes David Pecaut, senior vice president and global e-commerce leader at Boston Consulting Group. "The stakes are high for online retailers who do not deliver."

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