Filed under: Uncategorized | Tags: demographics, e-commerce, online shopping, pew, Search Engine Marketing, SEM, SEO
Coming from a world where user experience is supposed mean everything, I am constantly struck by the paradox that some truly mediocre – if not downright appalling - online shopping sites (not naming names here) have nonetheless been pretty successful over the past several years. How can this be, and more importantly, is this going to continue? Does user experience really not matter?
I think I found some answers to these questions in this 2008 Report from the Pew Internet and American Life project. I really like the Pew reports because they are commercially unbiased – they have no interest in the outcome of their studies one way or the other. They also seem to do a pretty rigorous job in running their studies which are based on doing extensive nation-wide telephone surveys. In other words, there are good reasons to believe that their numbers are accurate.
Take a look at this chart from the report:
Percentage of Adult Americans Who Have Ever Purchased Online
In 2000, only 22% of American adults had ever purchased a product online. By 2006, that number grew to 50%. Amazingly enough the percentage actually shrinks to 49% in 2007, indicating that the growth of new online shoppers did not keep pace with the growth of population.
What this data tells me is that over the past eight years, we’ve had a massive influx of new online shoppers — about sixty-five million American adults — which has been fueling the massive growth of e-commerce. This has been a huge tidal wave that has lifted a lot of boats, and has benefited the biggest retail brands the most, since new shoppers tend to shop at retailers that they already know from their stores and catalogs. It’s been a free ride for a lot of sites, even the ones with terrible user experiences.
Now you might think that having reached only half of America today, we have another eight years of free ride ahead, but the negative growth between 2006 and 2007 should give you considerable pause. You should also note that of the half of the country who have yet to make an internet purchase, fully half of them aren’t even on the internet at all and probably do not own a computer.
The net-net here is that sometime in the not too distant future, the following statement will be more or less true: everyone who is going to shop online is already shopping online. For practical purposes, that may already be the case today. Patti Freeman Evans of Jupiter/Forrester has been writing about this for years!
I think that insight answers my second question. As the growth of new online shoppers slows and even grinds to a halt, as it appears to be doing, the e-commerce dynamic will shift from sucking in a share of new shoppers (for example, through Search Engine Marketing / Optimization) to retaining loyal customers. Customer retention has a lot of dimensions, but fundamentally it boils down to how the customer is treated throughout the entire series of interactions from landing page to order confirmation.
In other words, user experience is suddenly going to matter more than anything.
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