‘Online adults’ spend, shop more at local stores, says study

Consumers who use the Internet, called “online adults,” spend more shopping in local retail stores using information they get online, than they do for online purchases, says a new study for ShopLocal.com. Results also show consumers’ use of the Internet to research purchases before going to local stores—known as Web-to-store (W2S) shopping—is growing “stronger than online e-commerce.”

The new study, “The 2005 U.S. Web2Store Benchmark Survey,” was released Tuesday at the annual National Retail Federation conference. It estimates 83.4 million U.S. consumers made offline purchases influenced by online information during 2004, up 19% from 2003.

The study says the opportunities and growth potential of W2S shopping is “robust” for retailers who use the Internet to drive shoppers to their stores, especially “smaller local retailers [who] build a stronger online presence and begin to recognize the power of the Internet to drive local traffic.” Successful retail sites, it said, should provide “store price comparisons, information from smaller retailers where people frequently shop, sales alerts and local stock availability.”

Growth in online purchasing, on the other hand, “faces fairly fixed limits defined by product size, shipping costs and delays, and shoppers’ desires to support [their] local economy.”

The Web2Store Survey found that W2S shoppers spent a median of $400 and bought five products at local stores, compared to $250 and three products online, during 2004’s fourth quarter. That translates to $1.60 at local retailers for every dollar spent online, rising to $1.98 for affluent W2S shoppers, with incomes of $75,000 or more. Additionally, W2S shoppers spent an added $200 (median) locally after purchasing the products they had researched online.

The new study was done by The Dieringer Research Group (DRG) for ShopLocal.com and measured shopping patterns for 2004’s last three months. It’s the “most in-depth study ever conducted to understand the perceptions, activities and motives of W2S shoppers,” says Brian Hand, president and chief executive officer of ShopLocal.com and its parent company, CrossMedia Services Inc. From its results, “it’s clear shoppers prefer to use the Internet to find, and better understand, what they want to buy, before making their purchases at local stores,” he said. “The outlook for W2S shopping is stronger than online e-commerce and has enormous potential for all retailers, from national brands to small stores.”

The study also found:

* Two-thirds of online adults surveyed did W2S shopping in 2004’s fourth quarter, 85% of whom made direct online purchases. Thus, says the study, W2S shopping doesn’t replace direct online purchasing; it complements it, representing “a parallel impact of the Internet on U.S. retailing.”

* Seven out of 10 W2S shoppers did more W2S shopping in 2004 than in 2003, and 48% plan to do more W2S shopping in 2005. Only 34% expect to increase online purchasing in 2005.

* W2S shoppers saved an average 8.1 hours of shopping time by doing online research before making local shopping trips.

* W2S shoppers view the Internet as a convenient information tool, as well as a direct purchasing one. They use online research to make informed decisions about what they want to buy at local stores, and to save time and money.

* They primarily visit sites they most trust for information, especially major retailer Web sites and popular search engines.

* W2S shoppers rely on the Internet nearly twice as much for local purchasing information as they do on traditional sources, such as newspaper advertisements and inserts, local television and radio ads, and other media.

The 2005 Web2Store study surveyed 1,101 consumers who used the Internet to research products or stores before making a local shopping trip in 2004’s final three months. Interviews were conducted online during the last week of December 2004 and the first week of January 2005.

CrossMedia Services Inc., the Chicago parent company of ShopLocal.com, specializes in Web-to-store marketing and helps brick-and-mortar retailers and catalog retailers target promotions to shoppers via the Internet. Gannett Co., Inc., Tribune Company, and Knight Ridder, Inc. are partners in CrossMedia Services Inc.