Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
The mass affluent will spend an average $926 online by 2006. Wooing them will require loyalty programs, ease of returns, and product comparison tools.
The Internet may still be a specialized marketing medium, says a new report from Jupiter Media Metrix. Jupiter says that the mass affluent audience-–households with annual income of $75,000 or greater-–will continue to be the largest online population through 2006. They make up 25% of the market today and will continue to do so.
Because they buy more collectively online than any other group, retailers are focusing on this segment – but it’s a group with characteristics different from any other group online, according to Jupiter research.
The mass affluent have the highest penetration of broadband access among Internet users: 27% vs. lower income groups where only 12% of households have broadband. High broadband penetration among the higher income group bodes well for online retailing, say Jupiter analysts, who note that a persistent connection and high-speed downloads permit use of advanced product presentation tools such as 3D and zoom.
The mass affluent purchase more travel online than any other product category, with 59% making airline, hotel and rental car reservations on the web. “Commerce sites targeting mass affluent users might consider partnering or advertising with travel sites as a way to broaden their appeal to this group,” says Jupiter analyst Jon Gibs.
Jupiter also found that higher-income users tend to be more comfortable with technology and less worried about security online. In fact, only 34% said that greater credit card security would compel them to buy more online. That means that retailers can safely use the online channel to acquire and maintain relationships with this group of customers without worry of alienating them, say Jupiter analysts.
While the promise of greater credit card security provides little incentive for this group to buy more, loyalty programs such as airline miles do, Jupiter found. 31% of the mass affluent group said loyalty rewards would make them shop more online, versus 25% and 26%, respectively, of low and middle income groups. Ease of returns, the ability to comparison shop, and better product information were other factors that would drive higher income shoppers to purchase more online, while lower income shoppers had more concerns about faster delivery than the higher-income group did.