E-Channel: Today’s e-Merchants Must Change with Online Demographics

Posted: 10/2000

Today’s e-Merchants Must Change with Online Demographics

Because the demographics of the people using e-commerce services are changing, online merchants who don’t adjust their business models to accommodate the changes are risking their profitability, according to IDC’s
( Internet Commerce Market Model.

IDC predicts that 103 million new users in the United States will join the ranks of online e-commerce users by 2004. That will make the overall number of users close to 210 million, and it will more closely resemble the overall U.S. population.

“People from all walks of life and socioeconomic status will be online users, and online households will be much more like the average household than they are today,” says Barry Parr, director of Consumer eCommerce research at IDC. “The increase in the number of online users will mean that marketers who have in the past avoided online campaigns will need to embrace the Internet or lose out to the competition.”

The growing number of online users in the United States is good and bad news for those who sell products and services via the Internet.

“For new entrants into consumer e-commerce, the changes and the growth in the online population means there is still plenty of opportunity,” Parr says. “Existing online merchants who designed their business models to capture early adopters, however, will have to adjust their strategies. They’ll need to expand their offerings to attract older and lower income households, while making sure they don’t overlook the growing number of high-income online households.”

IDC believes portals should work extra hard to get a large share of new users, because many users will continue to stay with the one they first found.

According to IDC, adults 55 and older represent the fastest growing group of U.S. online users. That is a trend that is expected to triple from 1.1 million in 1999 to 3.1 million in 2004. They will account for one-fifth of all users.

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