December 22, 2005, 12:00 AM

Likelihood to shop online goes up with income

Online buying is still an upper-income activity: Households with annual income of $100,000+ are three times as likely to buy online as households with income under $35,000, Gallup reports.

 

With growth of 25% a year and online shopping poised to break through the $100 billion mark, the market for buying goods online appears to have become very mainstream. But research just out from Gallup shows that online buying is still an upper-income activity: Households with annual income of $100,000 or more are three times as likely to buy online as households with income under $35,000 and 33% more likely than households with income of $75,000-$100,000.

Asked in September if they had made an online purchase in the prior 30 days, 29% said yes. The breakdown by income groups was as follows:
$100,000 or more: 48%
$75,000-$99,999: 37%
$50,000-$74,999: 30%
$35,000-$49,999: 25%
Less than $35,000: 16%

“That income gap likely stems from lower-income households being less likely to own a computer, and therefore, less likely to be able to shop online,” Gallup concludes.

In addition, when asked to agree or disagree with the statement "I prefer to purchase inside the store, rather than online or by catalog," 51% of all consumers agreed with it, yet the percentage dropped markedly with income.

60% of consumers with household income under $35,000 agreed with it vs. 40% with household income $100,000 or more. The other income groups agreed at 59% for $35,000-$49,999; 46%, $50,000-$74,999; and 41%, $75,000-$99,999.

The average online purchase was $130. That amount is lower than the average purchase in an electronics store ($160), but higher than all other categories in the survey: specialty apparel ($123), department store ($121), general merchandise store ($94), office supply store ($80) and discount retailer ($63).

"Consumers are growing more comfortable making bigger-ticket purchases online," Gallup retail industry expert Kurt Deneen says. "As more products become available, it is convenient to make the purchase online; there`s no hassle on price, and no need to fight crowds or deal with getting the product home."

Results are based on interviews with 1,043 adults in the Gallup Panel survey of households, conducted Sept. 10 to Sept. 22, 2005.

 

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