Market research company GfK reported data yesterday on new trends in Internet retailing. According to the data, there are many products where more than 10 percent of the sales occur online, such as MP3 players (20%), digital still cameras (18%) and smart phones (14%). But, less obvious products such as breadmakers (20%), coffee grinders (12%) and dishwashers (10%) are also being purchased online.The data also demonstrates the online consumers are more price conscious than their offline counterparts because consumers utilize price comparison Web sites to shop around before they make their purchases.
Furthermore, consumers are more likely to purchase expensive items such as plasma televisions online if they believe they are getting a better deal than they would in brick and mortars.
Kervin Henry, business group director at GfK, commented in a release, “Increased consumer access to high speed broadband Internet services, provides both an opportunity and problem for Internet retailers.This channel is likely to continue to increase in importance, but the decreased product lifecycle on the Internet means the key to survival means getting the product and price mix absolutely right.”
The data alsoshows that the Internet provides easier product assessment based on price and functionality, which leads to a faster product sales cycle. For example, GfK’s price index comparison for a digital camera sold on the Internet in comparison to a retail store. From an equal retail store and Internet launch price in March 2005, the price on the retail store camera had fallen by 16 percentby April 2006, and the price on the Internet had fallen by 22 percent.