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The Net is a commercial failure: study

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In spite of heroic efforts by vast armies of e-merchants to pervert the Net into some commercial Valhalla, it remains primarily a tool for research (albeit commercial in many cases) and for socializing, according to a recent study by the Pew Internet Project.

The Net's vibrant commercial functions would have been at their height during the holiday shopping season during November and December, so the researchers chose to measure its vital signs at that time.

The results were less than inspiring. Fifty-one million people used e-mail during the season to make holiday plans; thirty million people sent e-greeting cards to loved ones and friends; but only twenty-two million people actually bought gifts on line, the study estimates.

Furthermore, even those people who do buy products on line did the majority of their holiday shopping in the real world, perhaps because a lot of people consider it fun.

Much of the e-merchants' disappointment may be the result of bad on-line shopping experiences last year. "The overall pool of Internet shoppers was bigger this year because the overall number of people with Internet access has grown. Nevertheless, the number of people who were turned off by their previous buying experiences on line and did not return to on-line stores this year is significant. Some twenty-two per cent of Internet users [who] shopped on line last year during the holidays....did not do so this year," the study observes.

The chief concerns were typical and everlasting. Eighty-five per cent of Internet non-shoppers said they prefer to see, hear, taste, smell and palpate the actual products before buying them. Seventy-nine per cent wisely said they're averse to sending credit card and other personal information to shaky dotcom firms. Fifty-two per cent reckoned they could get better prices for gifts in stores. And forty-five per cent doubted that their gifts would arrive on time.

Even among the converted, the average Internet holiday shopper spent a measly $330 on-line, the report reckons.

Insofar as the Net has any commercial value, it appears that price comparison and product research is where it shines. "Some forty-five per cent of Internet users sought gift ideas on line and thirty-two per cent used the Web to compare prices during the holidays," the report notes.

"The Internet is more potent....as a tool for getting ideas about things to buy and getting price comparisons than it is for making purchases," the study concludes.

Not that any of this is going to deter e-merchants. Indeed, on-line advertising has become increasingly aggressive of late, with dreaded pop-up ads now appearing on such free e-mail services as Hotmail, and Internet services as NetZero.

The approach is probably wrong, and will likely only result in alienating even more Netizens than banner ads, but common-sense solutions such as improving Web-site security, respecting shoppers' privacy and getting the damn products out the door on time would first require something like a sea-change towards honest dealing and reliability of an industry dedicated to self-serving gimmicks, opportunism and consumer exploitation.

We're not holding our breath. ®

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