Pew: 80% of Americans shop online, but most still prefer stores

Dive Brief:

  • 80% of Americans are “online shoppers,” Pew Research Center stated in a report released Monday.

  • According to the independent opinion research group's findings, 79% of Americans have made an online purchase of some type, up from just 22% when Pew first asked about online shopping activity 16 years ago. In addition, 51% have bought something using a smartphone and 15% have made a purchase by following a link from a social media site.

  • But 64% of Americans still prefer buying from brick-and-mortar stores: 78% say it’s important to be able to try a product out in person, 77% want advice from people they know, and 74% at least want to be able to read reviews, with 45% using their phones to look up reviews or compare prices while in stores. 

Dive Insight:

There aren’t a lot of surprises in Pew’s research — the data matches up with other research indicating that e-commerce continues to grow, aided by smartphones and social media, and that younger people are more likely to be mobile shoppers. Some 90% of Americans ages 18 to 29 buy online, while 77% have purchased something using their phones and 24% have bought something following a social media link. By contrast, 59% of those 65 and older have a habit of buying online, just 17% have bought something using phones and 5% have done so through a social media link.

But the Pew report also reveals the limits of e-commerce and online/mobile shopping. American shoppers continue to check prices and now, increasingly, reviews online (and 12% are paying with their phones in stores). Prices remain a big motivator when it comes to how or where Americans will buy: 65% say price determines whether they buy something in store or online, compared to 21% who’d buy from stores without checking prices online and 14% who’d typically buy online without checking prices at physical stores. In addition, when merchandise is new to them, they prefer to head to stores to check it out.

That demonstrates how important it is for merchants to have differentiated products, so that there’s no equivalent item to be found elsewhere, to rob them of the sale at a cheaper price. Product sameness and atmosphere sameness have turned a lot of merchandise — beyond typical “fungible” goods that are mostly the same among brands — into commodities. While sellers of commodities have little control over prices, the laws of supply and demand do, so making moves to limit supply and drive up demand can change the equation. Target, H&M and other retailers have all fueled consumer frenzy with limited-edition designer releases that swiftly sold out. But that approach can be tricky, too. 

“Scarcity only works when you have unique items that people can’t get anywhere else,” Nikki Baird, Rosenblum's partner at RSR Research and an author of the recent pricing study, told Retail Dive earlier this year. “It does no good for Macy’s to be tight on its Uggs inventory if Dillards and Amazon have a ton. And unless people absolutely have to have Gap khakis, it does no good for Gap to be careful about inventory if people are more than happy to get Dockers instead. So scarcity does help — if you have something everyone wants that no one else has. That’s why Lilly [Pulitzer] worked for Target. And frankly, they would’ve stocked more, but Lilly couldn’t do more than what they did.”

In that case, Target had a product line that couldn’t be found elsewhere. Not even Lilly Pulitzer itself had those designs and definitely didn't have those prices. Although most items in the collection cost more than Target’s other apparel lines, they were still priced to appeal to its “cheap chic” fans.

To the extent that items aren’t already known or can’t be showroomed, consumers are increasingly relying on reviews. But there’s a level of uncertainty about their trustworthiness, Pew found. Just over half (51%) of those who read online reviews say that they generally paint an accurate picture of a product or business, but nearly as many (48%) say it’s often hard to tell if online reviews are truthful and unbiased.

Finally, while Americans are clearly comfortable making purchases online, just 12% use their phones to pay in store. And while 48% of those surveyed say they know about bitcoin, a meager 1% of respondents has actually used, collected or traded bitcoins.

Whether cold, hard cash is used to pay for things has become something of a demographic issue in America: Non-whites, low-income Americans and consumers 50 and older are most likely to rely on cash to pay for things. About a quarter of Americans say that none of the purchases they make in a typical week involve cash. Even more — 39% — say they don’t worry about having cash on hand, because there are so many other ways of paying.

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Filed Under: Consumer Trends E-commerce