August 19, 2003, 12:00 AM

After five years, the early vision of online consumers has evolved

Since 1998, online consumers have become multi-channel consumers, says Forrester – and they expect more from retailers than ever.

The online shopper is a thing of the past, having in the short space of the past five years turned into a multi-channel consumer who demands more than ever of retailers, according to a new report by Forrester Research Inc.

In contrast to an earlier vision in which the Internet would dominate commerce and media behavior, the web instead has settled down to a role of one channel among many, Forrester says, and now interacts with the telephone, stores, kiosks, and interactive voice response technology. As such, the need to integrate the online channel with offline channels is greater than ever, Forrester says. Today, the multi-channel customer typically spends more than the customer who shops in only one channel, Forrester says, and for that reason, retailers must pursue that customer across channels by connecting back-end systems among catalog, store and online operations.

“It’s no longer possible to satisfy the majority of consumers in one channel,” says Forrester. “It’s time to integrate key technology systems and adopt the best practices for satisfying multi-channel consumers.”

Benchmark data from Forrester show that in 1998, about one-fourth of U.S. households were connected to the Internet and 5 million of them had made an online purchase. Since then the initial web audience has “multiplied, mainstreamed and matured,” Forrester says. By 2000, for example, households who’d bought online doubled in number, and today, two out of three Americans use the Internet.

As the penetration of the Internet increased, online consumers came to resemble more closely the general U.S. population, with the average age increasing, and educational level decreasing from the earliest Internet users. The average age of the online users rose to 46.6 years in 2003 from 40.5 years in 1998, Forrester says, while 41% have a college degree versus 49% of Internet users in 1998.

Today’s multi-channel consumer is someone who uses the web without abandoning offline channels, Forrester says. Shopping remains one of the most popular online activities, with 51% of consumers regularly buying online. And they buy a wider variety of goods: the number of different product categories a consumer buys online has grown from an average two in 1998 to eight in 2003.

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