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Faculty Research

Shopping Online

Who’s Putting Their Money Where Their Mouse Is?

With more than 110 million American adults now online,1 marketers and online retailers have been holding their breath in anticipation of an online shopping explosion. However, new research shows they may need to go without air for a while longer. Online shopping has been growing steadily, particularly among certain segments of the population, yet it still accounts for less than 2 percent of total retail spending.2 So why have some been so willing to key in their credit card numbers while others remain hesitant to open their wallets to e-retailers?

We set out to answer this question and a few others in a recent study of 1,750 households with Internet connections. We examined the computer-oriented lifestyles of online shoppers and nonshoppers and discovered these are not homogeneous groups, but distinct market segments—each deriving unique benefits from the Internet. The results identified why each of these segments is or isn’t buying online and what e-retailers can do to attract more online shoppers.


Our study revealed substantial differences between respondents buying online and those not. We labeled survey respondents who personally made an online purchase during the Christmas holiday season “online shoppers” and those who didn’t, “nonshoppers.”

We found that online shoppers are younger, wealthier, more educated, and more familiar with computers and the Internet than nonshoppers. Shoppers comprise 42.2 percent of online households and spend more time on the computer and Internet than nonshoppers. While both shoppers and nonshoppers use their online access mostly for email, shoppers use the Internet for just about everything else—except for playing online games. Shoppers also find online shopping easier and more entertaining and are less fearful about losing money in online transactions.

In contrast, nonshoppers use their computers less, are online less, and are more wary when logged on. Their online activities are less adventuresome and require lower computer literacy. These users tend to choose activities that don’t involve credit-card fears.

Our findings not only revealed differences between shoppers and nonshoppers but also the variations within these groups. Understanding how each segmented group uses and perceives the Internet is key to identifying market opportunities.

We identified four segments of online shoppers: 1) Shopping Lovers, 2) Adventuresome Explorers, 3) Suspicious Learners, and 4) Business Users. Nonshopper segments include: 1) Fearful Browsers, 2) Shopping Avoiders, 3) Technology Muddlers, and 4) Fun Seekers.


Shopping Lovers

With an average age of 44, Shopping Lovers are among the youngest of the groups. Their average household and personal income is $60,200

and $39,500, respectively. These vigorous buyers spent on average $326 or 27.8 percent of their holiday gift budget online.

Shopping Lovers’ households spend more time than most segments online, about 16 hours per week. In addition to being big online buyers, this group consists of online window shoppers. More than other groups, they spend time looking for merchandise at retail and auction sites.

Shopping Lovers genuinely enjoy buying online and will buy with little online vendor intervention or training. Online shopping appears to be a novel, fun way for them to shop. They are competent computer users, familiar with online shopping methods, and will likely continue to be enthusiastic buyers.

These people are online shopping champions, spreading the Internet word wherever they have an opportunity. They represent an ideal target market for online vendors, particularly of clothing, books, and music.

Adventuresome Explorers

This is the smallest online shopping segment, yet it’s a very significant buying group. These shoppers outspend all other segments.

Adventuresome Explorers are versatile and prolific in their online use. They log an average of 22.8 hours per week online—more than any other segment. They use their computers more than other segments to check or send email; look at financial information; read online news or magazines; visit sites related to their hobbies; look for tickets or reservations; search for a job; find and view photographs, clipart, or images; download software; and chat online. Their Internet activity is highest in every category except conducting business-related work, visiting retail sites, and playing games.

The average household and personal income for this group is $61,500 and $45,000, respectively. Adventuresome Explorers spent on average $440 or 29.2 percent of their holiday gift budget online.

Although small, this group represents a big resource to online vendors because of its lively spending. Adventuresome Exploreres see online shopping as a fun adventure. They appear to need no special attention from online vendors; indeed these users constitute the most influential online opinion leaders. Vendors would do well to cultivate and nurture this segment as online community builders and online shopping advocates.

Suspicious Learners

This group ranks next to smallest of the eight segments and reports the lowest spending level of the four online shopper segments.

The average household and personal income for this group is lower than others, at $58,300 and $40,700, respectively. Suspicious Learners’ spent on average $226 or 14.8 percent of their holiday gift budget online.

This group spends less time on the web than most, about 13 hours per week. They usually go online to play games; look for tickets or reservations; chat online; job search; or find and view photographs, clipart, or images.

Suspicious Learners aren’t very familiar with computers and the Internet, which limits just about everything they want to do online. To become a significant online shopper group, this segment needs direction and hands-on guidance.

They have the potential to increase their online shopping habits. Their reluctance to buy online stems from a lack of training. In contrast to some other more fearful segments, Suspicious Learners are relatively trustful of Internet retailers and don’t fear buying online, or “giving a computer” their credit card number. But they do need training to work their way into more online buying.

Business Users

This is the largest online shopper segment with the third highest online purchasing level.

With the highest salary of any category, Business Users have an average household and personal income of $64,400 and $55,400, respectively. Business Users spent on average $317 or 23.2 percent of their holiday gift budget online.

Compared to other groups, Business Users’ households spend an average amount of time online, about 14.7 hours per week. While logged on, Business Users are more likely than other segments to conduct business-related work. They are


Fearful Browsers are one of the youngest segments with an average age of 44. Average household income for Fearful Browsers is high at $63,700, but personal income is average at $42,000.

Fearful Browsers’ households spend an average amount of time on the web, about 14.8 hours per week. While this group isn’t keen on purchasing online, they like to window-shop online vendor sites. They most often visit auction sites, retail merchandise sites, ticket or reservation sites, and sites related to their hobbies.

Though they don’t actually purchase online, Fearful Browsers are relatively computer literate—much more than other nonshopper segments. This group consists of lookers, not buyers. Along with other nonshoppers, this segment is fearful of having their credit card number stolen and shipping charges, and they wish they could see products in person before buying.

Fearful Browsers are on the cusp of substantial online buying. They’re capable computer and Internet users, spend a good deal of their time online window shopping, but have not been able to get past some Internet fears. As online vendors help these people overcome such worries, Fearful Browers will become a significant buying group.

Shopping Avoiders are the second largest segment of online households. At an average age of 56, this is the oldest group. Average household income of Shopping Avoiders is third highest of the eight segments, at $61,700, and personal income is second highest at $47,500.

Shopping Avoiders households spend only 12.5 hours online per week— the second lowest of the segments. When they are on the web, this group likes to look at financial information; check or send email; read online news or magazines; play games; and conduct business-related work. But they loathe online shopping.

Shopping Avoiders have an appealing income level for online vendors, but this appeal is offset by values inconsistent with online shopping. They don’t want to wait for products to arrive in the mail and want to see things in person before they buy. They don’t understand the Internet ordering process and don’t know how to evaluate the quality of Internet merchandise. Though these are severe obstacles, their high incomes may make them an attractive target. Nonetheless, this group will be difficult to convert to online shopping.

This group makes up the largest segment. Their average household and personal income is second lowest at $54,400 and $37,800, respectively.

Technology Muddlers use the computer the least of any segment, and are the least computer literate. They spend less time online than any other segment, only 10.9 hours per week. Their favorite uses for the Internet are job searching; chatting online; playing games; visiting message news groups; and conducting business related work.

The Technology Muddlers segment is not an attractive target market for online selling. Members of this segment not only face a large computer-literacy obstacle but also show little enthusiasm to increase their computer and online comfort level. They spend less time than any other segment on the web, and their values are inconsistent with online shopping.

Fun Seekers rank lowest of all segments in terms of wages. Their average household and personal income is $48,100 and $34,570, respectively.

Fun Seekers’ households spend a great deal of time online—21.5 hours per week, the second highest of the segments. Members of this group use the Internet for its entertainment value. They play games; chat online; find and view photographs, clipart, or images; search for or download software; and visit sites related to their hobbies. But they don’t like using it for shopping.

Of all eight segments, this is the poorest and least educated. This group’s values are inconsistent with online shopping. While some of these values could be changed with education, the spending power of the segment suggests that such efforts would provide only a marginal return on the investment.


Our results show that fear is the number one reason more consumers aren’t shopping online. More than 70 percent of nonshoppers and a third of shoppers agreed with the statement, “I don’t want to give a computer my credit card number.” Three-fourths of nonshoppers and nearly half of the shoppers agreed that, “I worry about my credit card number being stolen on the Internet.” E-retailers can expect to see a substantial increase in online shopping as they help shoppers overcome these fears.


E-retailers can attract more online shoppers by taking some simple steps to provide safety assurances to customers. Every page on a vendor’s site should provide convincing evidence of financial security—logos, testimonials, declarations, records of achievement, etc. Establishment of an independently provided financial-safety rating system, having a confidence-inspiring certification or declaration, should help minimize these fears.

Independently managed payment sites (e.g., VeriSign,, PayPal) can provide online shoppers with financial assurances and could be more widely used by e-retailers. These sites require credit card information to be entered only once and provide payment opportunities for thousands of sites. Implicit in such payment sites is the notion that their only business is financial security, and they are thus motivated and able to provide protection levels unavailable at a normal e-vendor site.

In clicking on a check-out button for a vendor using such a service, payment can be less obtrusive, will not require entry (or confirmation) of credit card information, and therefore will not explicitly raise fears for shoppers. Hardware solutions are just becoming available to help relieve consumers’ financial fears. Pocket-sized devices containing a customer identifier are available to minimize the fears of shopper check-out.

Whatever the security provided, vendors shouldn’t risk losing customers by asking for credit-card information before final checkout. This request intensifies consumer fears of credit card theft or misuse. Shopper’s credit-card information should be visibly insulated from the online vendor.

E-retailers willing to ensure financial security will be better able to lure in large numbers of Internet users leery of keying in their credit cards. Online vendors will also benefit by meeting the unique desires and habits of each segment.

The top target groups are Shopping Lovers and Adventuresome Explorers because they are buying online and will be the opinion leaders needed to convert and train others, particularly Suspicious Learners and Fearful Browsers. Business Users are less of a target market because their online activity is driven by professional rather than personal needs. Likewise Shopping Avoiders are impatient and difficult to win over. In the near term, Technology Muddlers aren’t a strong target because of their substantial computer training hurdles. And, while Fun Seekers may be a playful group, they have low incomes and values inconsistent with online shopping.


Four thousand questionnaires were mailed to a national probability sample of U.S. heads-of-households having an Internet connection at home. Fifty percent were addressed to women, and 50 percent to men. The questionnaires arrived just after the Christmas holiday retail period. The response rate was 43.5% with 1,738 usable responses. Just over half the respondents were female. The average age was 49. For more methodology, please see the authors’ complete study.

Article written by Bill Swinyard and Scott Smith
Illustration by Greg Clark


  1. Amanda Lenhart et al., “The Evershifting Internet Population: A New Look at Internet Access and the Digital Divide,” Pew Internet and American Life Project, 16 April 2003, (accessed 28 July 2003).
  2. Retail Forward, “Retail E-Commerce Sales,” Retail Update, June 2003, (accessed 28 July 2003).

About the Authors
Bill Swinyard is a Marriott School professor of business management and holder of the Fred G. Meyer Chair. He earned his BS from BYU, his MBA from University of Michigan, and his PhD from Stanford University.

Scott Smith is a Marriott School marketing professor. He is founder of and Smith earned his BS from BYU, his MBA from Michigan State University, and his PhD from Pennsylvania State University.

This article is adapted from the study “Why People (Don’t) Shop Online: A Lifestyle Study of the Internet Consumer,” published in Psychology & Marketing, July 2003, pp. 567–597.