Retailers must develop new online selling skills to appeal to the millions of consumers signing up for broadband Internet access. According to new research from Forrester Research, Inc. (NASDAQ: FORR), broadband results in smarter, more demanding shoppers, who also spend more money. By the end of 2002, broadband adoption reached nearly 19 million US households, a figure that is expected to grow to 40 million by the end of 2004. In a series of three reports, Forrester analyzed the impact of broadband on both shoppers and retailers. We find that high-speed Internet access changes consumer behavior, benefits some product categories more than others, and will force retailers to respond.
Broadband Produces Smarter Shoppers
Broadband’s quick page loads and instant access mean that consumers spend more time online, which means they spend more time researching products and spend more money online, according to Forrester. Twenty percent of consumers who signed up for broadband in the past year say they have increased the amount of money they spend online since acquiring high-speed Web access. That figure mushrooms to 48 percent for consumers who have had broadband for two to three years.
Broadband Benefits Some Product Categories More Than Others
Research-intensive products, such as consumer electronics and computer hardware and software, benefit the most from broadband. Consumers also say they buy more media products like music because broadband makes it easier to sample tracks before purchasing a CD online. Other product categories that benefit from broadband are outlined in the Forrester reports. Among the categories that do not benefit: office supplies.
Broadband Will Force Retailers To Respond
“Retailers need to become just as smart and fast as these high-spending, high-speed shoppers,” says Forrester Research Senior Analyst Carrie Johnson. “Retailers must prevent fast-moving shoppers from getting away.”
For example, broadband allows consumers to shop at different times. Today, many shoppers wait until they’re at work with a high-speed connection to purchase online, making Wednesdays and Thursdays between 2:00 p.m. and 5:00 p.m. the peak browsing times. This will change as consumers access their high-speed home connections. Retailers need to be ready with aggressive marketing during specific parts of the day.
According to Forrester, retailers should offer more sophisticated research tools and online help. Apparel companies will follow Lands¿ End¿s lead and offer live online chat with a customer service representative. Just 13 percent of the top 100 retailers let consumers check to see if a product is available in-store before they head to the mall, but broadband will intensify the need for this service. In the future, large retailers like Target and Wal-Mart will also need to offer this feature.
This series of Forrester reports examines how broadband is changing consumer behavior, how retailers need to respond, which retailers need to act immediately, and which retailers have more time to prepare for the broadband revolution.