Broadband hasn’t been more than a blip on the retail radar screen, but that’s about to change. According to a recent series of reports by Forrester Research Inc., Web retailers will have to upgrade their websites to address the demands and needs of broadband shoppers or risk missing out on this potentially lucrative segment of the market.
Forrester estimates that the number of broadband households will reach 40 million by 2004, up from 19 million in 2002. According to Forrester, consumers with broadband Internet access spend more time online, visit more websites and buy more merchandise online than users with dial-up Internet access. They also spend more money. According to Forrester, 20 percent of consumers who signed up for broadband access in the past year say they have increased the amount of money they spend online since using a high-speed connection.
Carrie Johnson, Forrester analyst, advises retailers to begin ramping up their offerings online to attract more broadband shoppers. “Broadband has finally reached a critical mass after years of hype,” Johnson says. “Broadband does matter and it’s forcing companies to think about it.”
While it once may have been possible to satisfy a customer by showing a thumbnail image of a product, Johnson says retailers will have to attract broadband shoppers with bigger and better images, tools that allow users multi-angle views of a product and even streaming media clips. “Most companies will begin by focusing on the product detail page, because it’s the area that needs the most improvement.”
On the higher end, sophisticated retailers will offer chat-based customer service and real-time inventory lookup capability. Johnson says that companies that sell computers and electronics, media, toys and apparel will be the first to prime their sites for broadband shoppers, especially cataloguers. “Most cataloguers are way ahead of the game,” the analyst says.
While cataloguers take the early lead, Johnson expects general retailers (such as Wal-Mart Stores Inc.) to fall behind in the broadband race. “The general merchants will have the most difficulty doing so, because they have so many different product categories,” Johnson says. “I could see them as the most likely to get left off the path.”
Even though online purchasing makes up only four percent of retail spending in the United States, Johnson says, retailers are paying attention to their online numbers. “It’s not a majority of spending by any means,” says Johnson, “but it’s growing fast and it’s also a very strong research tool for their in-store consumers.”