Study says consumers look, don't buy, online

May 19, 2008|By Liz F. Kay | Liz F. Kay,SUN REPORTER

Forget the hype about online shopping. Americans may use the Internet to research their purchases - but the information they find there doesn't necessarily clinch the deal.

And when it comes to actually laying out cash, most prefer doing it in person, according to a detailed study of online commerce released today.

According to the Pew Internet & American Life Project, 40 percent to 55 percent of shoppers surveyed said they looked online for information for three categories of purchases: cell phones, music and housing. But they more often relied on brick-and-mortar stores - or human agents - when it came time to buy.

"We find the Internet being used in a very tactical way," said John Horrigan, the project's associate director. "It tends not to be a game-changer in people's consumer decisions. It's used in a very technical way to help people eliminate options that aren't useful for them."

Despite the press generated by online music stores such as Apple's iTunes and a wide variety of Web-based gadget outlets, only 22 percent of music buyers and 10 percent of cell phone shoppers reported making purchases online.

The study also found that most buyers don't bother to review or comment on purchases they've made - even when they have ample opportunity online. But those who do may find their voices are heard, Horrigan said.

The Pew researchers surveyed consumers about music, cell phones and housing to capture shoppers with different interests.

They chose music because "we wanted to get something that in principle could be an entirely digital product," Horrigan said. Cell phones, he said, represent a feature-laden information gadget that people purchase periodically. The final category, housing, he said, is something everyone needs eventually but isn't inherently technological.

More people rely on the Internet for advice about cell phones than about music, possibly because of the level of commitment - and money - involved, the study indicated.

About 60 percent of consumers in the market for cell phones consult experts and salespeople in person, and about half go to at least one cell phone store. Only two-fifths of cell phone purchasers used the Internet at all.

With music, more than 80 percent of consumers still depend on mainstream media such as radio, television or movies to discover new artists. About two-thirds say their friends and relatives introduce them.

Downtown resident Diana Priddy, 32, falls into that category. The nursing student buys music by the song online and physically on a full CD - but relies on a trusted adviser (her sister) to ferret out new tunes and artists.

"She always has a stack of things she wants me to hear," Priddy said. "If new music finds me, that's cool."

Although survey participants were more likely to use the Internet to search for music than cell phones, online information had a bigger impact on cell phone users.

"If you spend $15 or $18 on a CD or a few songs, if they're lemons, you're not going to be in that much trouble," Horrigan said. With cell phones, "People were comparing features online and sort of drilling down into various dimensions of cell phone use."

Three-quarters of music buyers said their last purchase was in a store, while more than 80 percent said all or most of their music purchases were CDs, not downloads. A similar phenomenon holds true for cell phones. The survey shows that 78 percent of purchases took place in person.

"The large majority of people are executing their transactions at stores, not online, even for music, a purely digital good," Horrigan said.

Even so, more than two-fifths of cell phone and music buyers and nearly a third of homebuyers said they saved money as a result of online research.

In housing, the results were mixed. About half the survey participants who had moved within the past year reported that they had turned to the Internet.

"For home buying, there was a heavy reliance on the Internet" to narrow down neighborhoods or eliminate options that are too expensive, Horrigan said. "Still, people were using the same old techniques of using a real estate agent."

Not surprisingly, house or apartment hunters were more likely to turn to the Internet if they were moving to a new city. About 60 percent of those changing municipalities looked to the Web. About 55 percent of those worked with a real estate agent.

Priddy, who moved to Baltimore from Oakland, Calif., last May, started looking for roommates and apartments online through craigslist.com - a free classified advertising site. Initially, she had no luck.

"I didn't even get a single call back, because people want to meet the people they're renting to and I had no ability to meet them," she said. Priddy returned to the Web, this time in order to find the Johns Hopkins shuttle route and look for apartments within walking distance.

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