Embrace the net or lose out on e-business, marketers told

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The demographics of the US online population are dramatically changing, and online merchants who don’t adjust their business models to accommodate the changes are risking their profitability. According to IDC’s Internet Commerce Market Model, 103 million new users will join the ranks of the US online population by 2004 – a population that will then total 210 million, almost the US populace.

“People from all walks of life will be online users, and online households will be much more like the average household than they are today,” said Barry Parr, director of Consumer eCommerce research at IDC. “Marketers who have in the past avoided online campaigns will need to embrace the Internet or lose out to the competition.”

The change is both good and bad news for those who sell products and services online.

“For new entrants into consumer ecommerce, the changes and the growth in the online population mean there is still plenty of opportunity,” said Parr. “Existing online merchants who designed their business models to capture early adopters, however, will have to adjust their strategies. They’ll need to expand their offerings to attract older and lower-income households while making sure they don’t overlook the growing number of high-income online households.”

IDC believes portals, especially, should work extra hard to get a large share of new users. “Many users will stick with the first portal they find and feel comfortable with,” said Parr.

According to IDC, adults 55 and older represent the fastest-growing group of US online users. In fact, their numbers will more than triple from 11.1 million in 1999 to 34.1 million in 2004, and they will account for 20% of all new users.

The US 18-34 age group is the most active. By 2004, almost 91% of this group will be online.

“Many in this group already take the Internet for granted,” added Parr. “In five years, they’ll expect it to be as reliable as electricity, the telephone, and running water.”

More information can be found in IDC’s new report The Next Wave of US Online Users: Forecast and Analysis, 2000-2004. This report looks at the current demographic makeup of the online population and discusses how it will change through 2004. The implications of these changes for ecommerce vendors are also discussed.

IDC

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