Fear of buying
By Steve Salkin -- Logistics Management, 5/1/1999
Have you ever purchased anything on the Internet? If not, why not? Prices tend to be cheaper and there's usually no question of availability, so what's the holdup? Could it be the lingering fear of typing in your credit-card number and sending it into the black hole of cyberspace?Despite assurances from security experts and experienced 'Net shoppers, many people remain reluctant to purchase items electronically. It's puzzling to companies trying to sell their wares over the Internet--why will people give their credit-card information to a nameless voice over the telephone but won't enter it into a secure online order form?
Internet marketers have conducted a great deal of research about consumers' attitudes toward making purchases over the Internet. Here's what some recent surveys have found.
* Cheskin Research and Studio Archetype/Sapient Corp. (www.studioarchetype.com/cheskin) conducted a study to determine which types of Web sites users found trustworthy. The study found that a strong brand name instilled buying confidence, as did a professionally designed site with little technical imperfection.
* Familiarity with the Internet and its technology is not necessarily an antidote to consumers' fears, one survey found. In fact, experienced Web surfers are more concerned about security, mainly because they are more aware of the issues involved than are novice users. According to Intelliquest Research (www.intelliquest.com), 60 percent of all Internet users shop online, but only 20 percent actually make purchases electronically.
* Speaking at an electronic commerce (e-commerce) conference in Asia, Mark Cullimore, director of emerging technology at Visa International Asia-Pacific, said his company's research found that only 5 percent of consumers trusted e-commerce. Cullimore also reported that Internet-based transactions generated 50 percent of credit-card disputes and fraud transactions at Visa International, even though Web sales accounted for just 2 percent of the credit-card company's overall business. He blamed consumers, saying that they worried too much about online fraud.
* Fifty-six percent of U.S. companies will sell products online by the turn of the century, according to a survey by the Financial Executives Institute and Duke University. That's more than double the 24 percent recorded in 1998. The percentage of total sales conducted over the Internet also will increase, from 5 percent in 1998 to 8 percent in 2000, the study reported.
* Another study, this one conducted by Greenfield Online (www.greenfieldcentral.com), indicates that 39 percent of consumers who have Internet access are spending less time in traditional stores and malls. "These results are significant to retailers, since Americans who use the Internet [represent] 60 percent of the buying power of the total U.S. population," said Greenfield's CEO, Rudy Nadilo, in announcing the survey results. The study also asked respondents how likely they would be to purchase certain types of products electronically. For the results, see the chart at right.
Take precautions
The only way to make an online purchase is to use a credit card. All the major card companies have safeguards in place, but they continue to work on ways to improve security.
Visa, MasterCard, and others in the industry have established the Secured Electronic Transaction (SET) standard. SET uses digital certificates to verify the user's identity and ensure that the online seller is authorized to accept the credit card being used.The system is not yet in widespread use, but vendors are starting to develop the necessary software. (For more on SET, go to www.setco.org.)
For those who remain concerned about online security, here are some tips on Internet shopping, courtesy of Visa International. This and other useful information can be found on Visa's Web site (www.visa.com).
* Use the Internet to comparison shop before buying online.
* Always use a secure Web browser.
* Shop with merchants you know, or research merchants before you buy from them.
* Check the vendor's delivery and return policies.
* Keep a record of your transactions.
* Keep your password secret. Some sites require a user to register as a customer and provide a password before buying. The advantage is that you don't have to re-enter your basic information--name, address, phone number, e-mail address--each time you shop.
* Make sure you know whether you are buying from a business or from a private seller.
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