We get on the Internet to search, email, watch videos, listen to music and talk with others - but one of our most favorite activities on the Internet is: Shopping. Purchasing a good on-line for personal or business use was the second most common activity among the US Internet users according to Mediamark Research Inc's Fall 2006 Survey. While the people who watched videos, read blogs or made a phone call on-line more than doubled last year; in absolute terms, those numbers pale in comparison to the ranks of on-line shoppers.
According to data from Compete and research by eMarketer (which produced the chart on the left), on-line shopping sites, especially the websites of department stores, added the highest number of new users last November. Clearly, a large portion of those new users were doing their holiday shopping on-line, but nevertheless, the growth of Internet users shopping on line was impressive.
From my personal point of view, this trend implies that there is greater potential for new start-ups to emerge in the e-commerce segment to make on-line shopping even more user-friendly and convenient for consumers.
One of the biggest beneficiaries of this trend are the sites that provide personalized recommendations, like Loomia (note: I'm one of their angel investors) and Aggregate Knowledge which allow for smarter and more custom shopping experience. The data behind their growing importance is solid (according to eMarketer, as of 2006):
- 80% of Internet users indicated interest in receiving personalized content
- 57% of Internet users are willing to provide demographic data in exchange for personalized content
- 43% of Internet users are willing to let websites track their clicks and purchases in exchange for personalized content
Other types of sites that could leverage this trend to their advantage are:
- Product rating sites like Wize - for more informed shopping (Raj Kapoor has a great blogpost on this)
- Consumer support sites like Fixya - to help with the products after the purchase
- Shopping search engines like Bizrate which encompass all product categories or commercial search engines that focus on specialized commercial products like Octopart - to allow smart product search/comparison based on price, specs, ratings and other factors
My wife and I have just sold our two year old designer sofa in less than 24 hours. First step was taking a picture and posting it on Craigslist. What really closed the deal, however, was inserting that Craigslist link to our listing, into our Facebook status message (we did it with Gtalk status as well). It was my wife's brilliant idea and it worked like a charm. It's too early to say if this implies a new market or business model, but the experience was so positive - it makes me wonder. Most of us would rather buy from or sell goods to people we know and trust. More importantly, when that transaction is time sensitive, that connection might be even more crucial. Food for thought...
