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Does My Business Need a Website

This article coincides with my article titled The Benefits of Having a Website. The topic of this one covers statistical analysis of why your business should be online, particularly from an e-commerce and informational perspective.

Whether your business caters to the consumer (B2C – Business to Consumer) or to other businesses (B2B – Business to Business) you need to consider the trends, demographics and statistics of how the internet is used and by whom. If you are to target your internet marketing, determine your return on investment or even to decide when or even if you should make the move to go online, the facts and figures to follow should make those decisions easier for you.

Internet Usage Statistics

Country	Population (2005 Est.)	Internet Users (Latest Data - 06/25/05)	Use Growth (2000 - 2005)	% Population (Penetration)
Canada	32,050,369	20,450,000	61.0 %	63.8 %
United States	296,208,476	200,933,147	110.7 %	67.8 %
NOTES: (1) Internet Usage and Population Statistics for North America were updated on March 24, 2005. (2) Detailed data for individual countries and regions may be found by clicking country names. (3) Population numbers are based on data contained in gazetteer.de. (4) The most recent usage comes mainly from data published by Nielsen//NetRatings , ITU , and other local sources. (5) Data on this site may be cited, giving due credit and establishing an active link back to InternetWorldStats.com . (6) For definitions and help, see the site surfing guide. ©Copyright 2005, Miniwatts International, Ltd. All rights reserved.

Growth and Acceptance

When you consider the growth of internet use in the United States and Canada, along with the population penetration, the question to be asked is, how can your business afford to not be online? Even if your business is only a brochure site, your presence is there to be found. If you are a full e-commerce site, the potential for sales is great with the growth in online sales growing at a phenomenal rate, this is not something to be unaware of, or to continue to ignore.

The acceptance of using the internet for daily activities has grown significantly beyond a research or entertainment tool. Where shopping, banking and other financial activities were once shunned as being insecure or only for those on the cutting edge, they are now being embraced by more and more of the common internet user.

How the Internet is Being Used Today

Fifty-three million people, or 44% of internet users and one-quarter of all adults, now say they use online banking. Those figures amount to an increase of 47% over the number of Americans who were performing online banking in late 2002. Of all the major internet activities tracked by the Project since its inaugural survey in March 2000, online banking has grown the fastest. Internet users with high-speed connections, those with six or more years of experience, and those between 28-39 years old are the most likely to bank online. - Online Banking 2005: A Pew Internet Project Data Memo - 2/9/2005 - Susannah Fox

41% of adults surveyed in mid December said they went online often or very often to research products and services. The No. 1 activity was sending or receiving e-mail (67% often or very often) and No. 2 was doing research for school or work (45% often or very often). Shopping was the 7th most popular activity in terms of consumers who engaged in it often or very often. - Harris Interactive - 01/22/2004

The Growth of Online Shopping During the 2004 Holiday Season

A significant increase in online shopping was seen during the 2004 holiday shopping season from November through December. The following statistics are amazing and are further incentive to consider opening an e-commerce enterprise in addition to your brick-and-mortar store.

Statistic	Source	Date
U.S. holiday shoppers spent $23.2 billion online, not including travel. That's up one-quarter from the $18.5 billion spent last year. online shoppers spent $3.8 billion on clothing or apparel, for 16 percent of the total. Next came toys and video games at $2.5 billion, or 11 percent. Consumer electronics came in a close third, accounting for $2.3 billion, or 10 percent. Consumers spent $2.1 billion on computer hardware and peripherals this holiday season, up nearly a third over last year.	Goldman Sachs, Harris Interactive, Nielsen/NetRatings	January 2005
E-commerce spending over the November and December holiday season is expected to exceed $15.8 billion, up 29 percent from the year-ago period. Consumers spent $14.8 billion online between Nov. 1 and Dec. 26 versus $11.5 billion during the same weeks in 2003. Rising consumer confidence played a role in the last-minute surge in holiday spending online and offline.	ComScore Networks	January 2005
The average holiday shopping budget per person in 2004 for selected countries worldwide -- The UK led the way, with an average of $1,003 per person, followed by the US with $948 per person and Spain with $617 per person. Japan ranked lowest among surveyed countries with only $101 per person.	AC Nielsen/AXA	December 2004
Online shoppers in the United States spent $16.7 billion in the first six weeks of the 2004 holiday season, up 28 percent from the year-ago period’s $13 billion. Music was the fastest-growing category year over year, up 33 percent to $871 million. The video/DVD and jewelry categories each rose 32 percent, to $1.6 billion and $1.2 billion, respectively. Book sales were up 27 percent to $1.33 billion while toys and video games hardware and software grew 22 percent to $1.93 billion.	ComScore	December 2004
Online consumer spending reached $1.66 billion the week ending Nov. 28, up 36% from the $1.22 billion that consumers spent online in the corresponding week a year ago.	ComScore	December 2004
Online retail sales rose by 19% in November 2004 over November 2003. Specifically, $8.8 billion, excluding travel purchases, was spent online last month. The apparel category of online sales received the biggest chunk of total online retail sales for the month, at $1.48 billion, followed by the toys and video games category, which claimed over $1 billion.	Harris Interactive	December 2004
Online spending in 2004 through the day after Thanksgiving--also known as "Black Friday" in the retail industry because heavy sales have pushed retailers into profitability for the year--totaled $5.7 billion, compared with $4.6 billion in 2003. Spending on Black Friday itself failed to disappoint e-tailers; U.S. consumers accounted for $250 million in online sales, a 41 percent increase over the $178 million reported for 2003.	ComScore	November 2004
The online holiday season is off and running with traffic up 60 percent for the week ended Nov. 14 from the prior seven-day period, said Tuesday. The Internet audience research firm, which unveiled its sixth annual Holiday eShopping Index Tuesday, said shopping visits to Web sites in the home and garden, books/music/video, and toys and video games led traffic growth.	Nielsen//NetRatings	November 2004
Overall, the percentage of consumers who plan to spend more on the holidays this year, compared to last year, has increased to 22%, up from 19% in 2003. 76% of U.S. consumers plan to buy at least one consumer electronics (CE) product as a gift during the upcoming holidays.	Consumer Electronics Association	October 2004

Statistics compiled by Shop.org

Consumer Online Shopping Trends During the 2004 Holiday Season

Consumer trends clearly show the move towards online shopping as shown here in the stats from the 2004 holiday season.

Statistic	Source	Date
Multichannel holiday sales in November and December climbed 5.7 percent to $222.3 billion in 2004, the strongest showing since 1999 and an increase from 5.1 percent growth in 2003. The preliminary estimate includes store, catalog and e-commerce sales nationwide.	National Retail Federation	January 2005
Online shopping claimed a 25% increase in the share of Internet traffic from Nov. 1 through Dec. 25, rising to 9.1% from 7.2% in the comparable period last year. The busiest day in online shopping traffic occurred on Thanksgiving Day, Nov. 25.	Hitwise	December 2004
Rural U.S. consumers were 16% more likely than other consumers to shop online in November. Rural Americans accounted for 38% of total visits to all web sites and 44% of visits to online shopping sites. Among the top 100 retail sites in number of visitors for the four-week period ended Dec. 4, those with the highest percentages of rural visitors were Cabelas.com, with 62.3%, followed by ABCDistributing.com, 59.5% and DicksSportingGoods.com, 55.9%.	Hitwise	December 2004
Online shopping visits reached a record high on Thanksgiving, with Black Friday coming in second. Hitwise said that shopping and classifieds sites claimed 11.39 percent of all U.S. visits on Thanksgiving, breaking the 2003 high of 8.96 percent, which was also set on the holiday.	Hitwise	December 2004
U.S.-based visits to retail Web sites exceeded 10 percent of total Internet traffic for the first time ever, accounting for 11.39 percent, 11.03 percent and 10.74 percent, respectively, on Nov. 25, Thanksgiving and Black Friday. The top five sites luring traffic over the same timeframe were eBay, Amazon.com, Walmart.com, BestBuy.com and Target.com, in that order.	Hitwise	November 2004
The number of U.S. shoppers online rose 11 percent year over year on the day after Thanksgiving, the biggest store-based shopping day of the year, also known as Black Friday.	Nielsen/NetRatings	November 2004
Online shoppers plan to spend 53 percent of their holiday budgets on the Web this season, overtaking traditional retail channels for the first time. Shoppers also plan to boost online spending by 6.5 percent, reaching an average of $295 this year, compared with $277 last year.	America Online	November 2004
Global sales across the Internet to hit $150 billion this year, a 56 per cent increase from 2003. Despite worries about phishing, viruses, patching and the like, customers are gaining confidence about the Net as a shopping place. There's also a strong surge in cross boarder transactions, which Visa claimed represent 16 per cent of its transactions. It said that an average e-commerce transaction is worth $107, compared to $70 for physical card transactions.	Visa	November 2004
52% of online shoppers plan to begin their holiday shopping over 30 days before Christmas, December 25. In fact, 28% say they plan to finish their holiday shopping between 8 and 14 days before December 25, compared to 16% of offline shoppers who say the same thing. As for the retail sites that were most popular among online shoppers, Feedback Research reports Amazon.com claimed 10% of total traffic over the 2-month time frame. eBay followed with 9.7% of traffic and iVillage had 7.0%.	Claria Corporation	November 2004

Statistics compiled by Shop.org

But I Am So Small...

...So you might say, as the owner of a small business, and those companies in the charts above are so big! Right you are. However, keep in mind that we live in a Global market. Shoppers today expect to have everything available to them. Nothing is out of reach. You have a specialized product? A niche market? The internet is a perfect forum for these situations. Your "local" area becomes expanded to the entire country, conceivably the world.

Consider the cost of expansion. What does it cost to build a new store? To open a new location? To advertise to new markets? To build a first-class E-Commerce website with built-in inventory management, shipping control, that is customized to match your company's image will run you between $3,000 - $10,000+ depending upon the size of your site and what you want involved. Integrating your E-Commerce site with Froogle (Google's search engine for saleable products) is free, and is highly utilized by internet shoppers.

Sure it is an investment, but a worthwhile one.

What Does This Mean to My Business ?

Considering the above information in relation to what you are trying to sell, it only makes sense that you tap into the market that is the Internet. People are buying. More people are buying every year. These are just the retail statistics. The numbers for research are even higher. Consider how often individuals use the internet to find information, to research products and services, look up reviews, find others' opinions, compare prices. These are all services that you as a business can offer. By adding these services you become a subject matter expert, a resource that potential customers will return to again and again, and will eventually buy from when they are ready. Why? Because you are the one who has provided them the information that has helped them to make the decision to buy! I ask the same question that I asked at the beginning of this article, how can your business afford to not be online?

Merlee Bos
Merlee Designs™
Your website IS your first impression™ ...
http://www.merleedesigns.com

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