During the past six years, Forrester Research, Inc. (Nasdaq: FORR) has surveyed more than 1 million consumers, gaining valuable insight into today’s complex, evolved multichannel consumer. “The Changing Consumer” research series compares data collected between 1998 and 2003, revealing significant changes in consumer attitudes and behavior. For example, 42 million more households are online today than were online in 1998. Additionally, consumer confidence in online credit card security and technology optimism has declined over the past several years.

“Consumers have been through a lot in the past few years — highs and lows that have permanently changed the way they live,” said James L. McQuivey, group director at Forrester. “Businesses need to understand the shifts that have occurred so that they can offer consumers a different kind of experience. To keep their loyalty, companies must integrate the Internet into a seamless experience that includes other self-service channels and traditional channels like the phone and retail locations.”

The Evolving Online Consumer, 1998 To 2003
While two out of three people in the US use the Internet regularly, today¿s consumers spend less time online than they did in the late 1990s. Consumers have come to expect integrated multichannel experiences incorporating on- and offline channels. Retailers, for example, should integrate marketing and merchandising efforts, connecting catalog, retail, and online operations.

The Digital Divide Still Haunts The US
Although rapid Internet adoption has narrowed the digital divide, a significant gap between the digital haves and have-nots remains.

The Increasing Significance Of Price Over Brand
Today, higher percentages of consumers say that price is more important than brand. Since most retailers can’t win the price game against retailers like Wal-Mart, they must differentiate themselves in service, product quality, and overall shopping experience by implementing loyalty programs and store technologies that enhance consumers’ overall shopping experiences.

Online Credit Card Security Confidence Erodes
Since peaking in 2001, consumer confidence in online security has fallen and shows no sign of improvement in 2003. Currently, close to one-third of online shoppers are technology pessimists, compared with 16 percent in 1998. As online retail security issues emerge, this larger group of eCommerce pessimists is becoming less trusting with credit card transactions.

Consumer Technology Optimism Follows The Market
Despite the spread of consumer technologies and their wider adoption by the mainstream, technology optimism has been declining since its peak in 2000. Trends show, however, that the optimism gap between those younger than 25 and those 65 and older has decreased by one-fifth.

Where The Wired Live In America: 1998 To 2003
In the late 1990s, consumers in metropolitan areas like San Francisco and Washington, D.C., were the most wired in the US. A significant shift has occurred, creating new technology hotspots in the Sun Belt like Austin, Texas; Phoenix; and Albuquerque, N.M.

Upcoming briefs in this series will focus on media consumption and the vehicles consumers use to retrieve news, sports, and other forms of entertainment, as well as consumer motivations and key shifts in Canadian consumer behavior.

To learn more about maximizing the multichannel customer experience — offline, online, and across channels — join us at Forrester’s Consumer Forum, “Building A World-Class Multichannel Customer Experience,” September 21¿23, 2003, in New York, N.Y. For additional information about this Event, visit: http://www.forrester.com/Events/Overview/0,5158,542,00.html.

The research mentioned in this press release is available to Forrester WholeView™ clients and can be found at www.forrester.com.