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Study Shows Internet Plays Pivotal Role in Consumers Purchases

By Sophia Mayengbam

Internet shopping has changed the landscape of shopping in today’s world. Consumers today rely and research on the Internet about products before buying it online or offline. According to a study released by Yahoo! Inc. and media communications specialist OMD the Internet's greatest impact on shopping is assisting consumers in the decision-making process, regardless of whether purchases are made online or at retail stores.

According to the study, a large majority of consumers look online for information as a core part of the purchase decision process for products of all kinds. The Internet provides a collaborative environment where consumers turn for advice and the experience of others in weighing brands, discovering alternatives and distilling prices, as they weigh their purchase decisions.

The study "Long and Winding Road: The Route to the Cash Register" examines how cultural shifts brought about by the proliferation of technology have radically altered the way consumers make purchasing decisions.

The study found that the Internet, along with related technologies like camera phone and text messaging have given the consumers the decision making power to gather information before they shop. More than two-thirds of shoppers across several product categories still make the bulk of their purchases at physical retail locations -- yet nearly two-thirds (62%) use a combination of online and offline sources to gather information before they buy.

"The Internet is far more than just another point of purchase; its biggest impact lies within the awareness and consideration process," said Wenda Harris Millard, Yahoo!'s chief sales officer. "The widespread adoption of social technologies gives marketers an even greater opportunity to continuously engage consumers and make connections across traditional and new media advertising, helping to build brand mindshare and increase offline sales."

The research shows that the Internet is crucial to consumers as it serves as a price leveler, provides a communal shopping experience, and is where consumers turn for trusted sources of information and dependable customer reviews.

The Internet is now the most common method of gathering information, with consumers using the Internet to comparison shop more often than they use it to buy goods.

The study found that three things are important when making a purchasing decision:

• Trusted information: Consumers say the Internet is the most trusted shopping information source (54 percent), followed by magazines (34 percent) and TV (23 percent). Seventy-four percent of people use trusted, familiar Web sites when purchasing online, and 55 percent opt-in for e-mail marketing messages from companies they trust.
  
• Choices: On average, consumers consider three brands before making a purchasing decision. Many consumers shop using the Internet, but 38 percent of consumers still want to be able to see and touch products before they buy. The Internet helps narrow down options before they purchase either online or offline.
  
• Price: The research shows that 61 percent of people consider themselves to be serious bargain shoppers. The Internet is changing the concept of fixed pricing by enabling consumers to search for the same product at myriad prices, as well as actively monitor a product for price discounts or find coupons and rebate offers.

Another research finding is that the shape of the traditional purchase "funnel" has changed. In the past, as consumers began researching their options, they steadily narrowed their choices all the way to purchase. The study found that there is opportunity for marketers to affect purchase decisions with brand messaging, be it traditional, online, in-store or word of mouth, even after consumers have decided where to buy. Sixty-three percent of consumers gather information when they first begin researching a purchase, 57 percent when they are narrowing down their options, 42 percent when they are deciding where to buy, and 51 percent when making their final decision. At each stage of the "purchase tumbler," the Internet is the first place that consumers turn to when gathering information. It is used more than any other resource (including friends and family, offline reviews and traditional media sources).

"One conclusion that might be drawn from the study is that consumers have access to so much information that it often broadens, rather than narrows, their choices by the time they get to the store to make a purchase," added Mike Hess, Global Director of Communications Insights and Research, OMD. "This makes the role of advertising, especially 'just in time' advertising, and the buying cues in the in-store environment even more important. The use of a variety of traditional media, like television and magazines, can be potentially stronger than ever in influencing the 40% of shoppers in the store who are yet to make their final decision."