Retailers shift their ad spending from TV, radio and print ads to digital ads.
For every $1 spent online, the Internet influences $8 in offline purchases, according to a new study by Jupiter Communications. In 2005, the firm projects, consumers will spend more than $632 billion on phone orders and purchases at brick-and-mortar stores as a result of research they conducted on the Internet, dwarfing $199 billion in anticipated online spending.
"Skeptical retailers eyeing fluctuations in the financial market and the increasing failure rates of Internet companies are often blind to the most important issue--specifically the degree to which their online efforts will affect their offline business," Jupiter analyst Ken Cassar said today in releasing the findings at the Jupiter Shopping Forum in Chicago. Overall, the firm says, the Internet accounted for 43% of U.S. retail spending in 1999, through direct purchases at Web sites plus those inspired by online research. It sees the figure reaching 75% in 2005.
Consumers polled by Jupiter say the Internet influences their offline purchasing in various ways: 75% say they used the Web to identify price information, 62% selected products and 50% chose a brand or manufacturer.