Retailers should target Internet ‘Power Shoppers,’ says a new survey

Internet “Power Shoppers” are two-thirds as old with incomes twice as high as all other Internet users, reports the new iCustomer Observer survey from the University of Missouri, Kansas City, and the Valentine Radford ad agency. They buy twice as much online as other Internet shoppers and plan to spend 40% more online than other e-shoppers.

But the survey also found that e-retailers tend to treat all their customers alike, thus missing an opportunity to take advantage of affluent Internet shoppers’ propensity to buy. "Marketers need to apply traditional marketing techniques like market segmentation to the Internet to target consumers and maximize their profits," said Gene Brown, the Valentine Radford Professor of Marketing at the University of Missouri. "Then they can reach both the Internet Power Shopper as well as those who buy occasionally."

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Conducted quarterly, iCustomer Observer surveys 25,000 online consumers to determine current attitudes and behaviors in such areas as product quality and selection, pricing, customer service, advertising and current Internet shopping issues and trends. Power shoppers are 37 with average income of $67,000 vs. 55 and $34,000 for all others.

Other findings of the survey:

--Because the majority of Internet shoppers have two or more e-mail addresses, marketers need to target better. The "iCustomer Observer" found that a typical online consumer uses one e-mail address at work, a second for shopping and a third for family and friends. Marketers should include in their e-mails an option for the recipient to redirect future e-mails to a different e-mail address and take advantage of software to target better.

--Discounts should be used only to reward customer loyalty. Discounting has generated the expectations that the Internet is a bargain basement. Most shoppers expect discounts online.

--Online shoppers say they actually like receiving e-newsletters and like e-mails from their favorite retailers. While most online consumers find banner ads annoying, the vast majority enjoy receiving e-mail newsletters from their favorite retailers. And, with a less than .2% click-through rate, banner ads are ineffective. Plans to increase the size of banner ads by 300% won`t increase their effectiveness, according to Chuck Curtis, CEO of Valentine Radford. "Three hundred percent larger banner ads are simply 300% more annoying," Curtis says.

--Internet-only products offer good marketing opportunities. Volkswagen has had success marketing certain colors of its new Beetle exclusively to online customers. Ralph Lauren has had more success selling its "Big and Tall" clothing for men online than in department stores. Curtis believes Internet-only products represent huge potential for retailers. He says they should use the Internet for seasonal inventory control also.

--Experienced shoppers have lower expectations of free shipping than do others; 30% expect free shipping on purchases under $25 vs. 68%. They’re also more satisfied with the online shopping experience, rating online 8.8 out of 10 vs. 6.8 for all others.