Online Consumer Confidence Soars

By Allen Bernard

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Consumer we're more than happy to part with their money via the Internet this past holiday season according to new research from Harris Interactive.

Some 70% of online adults said Internet security concerns did not stop them from making purchases online, and 38% of online holiday shoppers said they spent more online than they did last year.

This is borne out by research from JupiterResearch, a division of Jupitermedia, which the parent company of CIO Update. According to Vikram Sehgal, research director at JupiterResearch, consumers spent 18% more online during this year's shopping season—November 1 thru December 30— than last year. Some $26 billion changed hands online.

Only 30% of online adults (the survey was conducted online) said security fears compelled them to shop less online or not at all. While just 20% said Internet security had them "very concerned" or "extremely concerned."

The survey, which was commissioned by BSA and conducted in late December, examined 2,152 U.S. online adults' holiday shopping patterns in relationship to their Internet security confidence.

"Are people concerned about security? Surely," said Sehgal. "Approximately 85% of the online consumer base are concerned about transacting online. Does that necessarily mean that people will not buy online? That's not necessarily true."

According to Sehgal, Harris' numbers are right in line with Jupiter's research, which they conduct throughout the year.

The first thing people look for is lowest price, then security of online shopping experience, and then shipping options, in that order. Only about a quarter of the online shoppers Jupiter has interviewed are concerned about the brand or reputation of the store they are buying from.

"The vast majority of shoppers refuse to let security fears stop them, and it appears that many are taking proactive steps to protect themselves and their computers," said Diane Smiroldo, BSA's vice president of Public Affairs.

Ignorance is Bliss?

"I don't think it's ignorance is bliss," said Sehgal. "People realize a JoeSchmo.com is not the same as Amazon.com. So their security experience is much better with Amazon than at JoeSchmo.com."

"It's a perception issue," added Sehgal, "but it's been changing over time. If you look at the perceived security fears over time it's been decreasing year over year and that just comes more with exp. with the Internet."

In an effort to help consumers develop that working knowledge of security issues, BSA has recently launched a new Web site http://www.bsacybersafety.com, which provides educational information about illegal, fraudulent schemes and how to avoid them.

Survey Methodology

Harris Interactive conducted this online survey in the U.S. on behalf of the BSA between December 27 and 29, 2005, among 2,152 adult Internet users, of whom 1,519 say they shopped online this holiday season (online holiday shoppers). In theory, with probability samples of this size, one could say with 95% certainty that the overall results have a sampling error of +/-2.5 percentage points.