Are Consumers Tired Of Online Commerce?

The Times is reporting that you people aren’t buying stuff online anymore. Online sales that once increased by 25% each year, are now increasing by less than 10%. The relationship between online outlets and brick and mortar stores is shifting, with some online outlets venturing into the real world to peddle their wares:

The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.

A dirty-sounding “clicks-and-bricks” hybrid model used by two of our favorite retailers – Best Buy and Sears – allows users to reserve items online and pick them up in stores, which may or may not have the items in stock. Several factors have conspired to keep consumers offline…

(Photo: supervillain)

Nancy F. Koehn, a professor at Harvard Business School who studies retailing and consumer habits, said that the leveling off of e-commerce reflected the practical and psychological limitations of shopping online. She said that as physical stores have made the in-person buying experience more pleasurable, online stores have continued to give shoppers a blas

experience. In addition, online shopping, because it involves a computer, feels like work.

Our allegiance to the lowest price has made us loyal online shoppers; unless, of course, we find a better price offline. Are your buying habits shifting back to brick and mortar stores? Tell us in the comments. — CAREY GREENBERG-BERGER

Online Sales Lose Steam as Buyers Grow Web-Weary [NYT]

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  1. realserendipity says:

    Its not that Ive stopped buying online, its that the amount of new things that they are selling online has gone down. Im still buying everything I can that way though, its generally cheaper and I dont have to deal with crowds or bad cashiers anymore.

  2. samurailynn says:

    Going from a 25% per year increase in sales to a 10% per year increase isn’t exactly declining. It just means that sales aren’t growing as fast as they used to. This probably means that the majority of people who will switch to buying online have already done so. Slower growth is not the same as a decline in sales. The article states “people aren’t buying stuff online anymore” which cannot be true if online sales are still experiencing a ~10% per year increase in sales.

    Where are the statistics for the increase or decrease in sales at brick and mortar stores?

  3. weave says:

    I’ve tried the buying online and picking up in the store. I like that arrangement, if it works the way it’s supposed to. Beats the Fed Ex / UPS door hanger hassle and in theory avoids running to a store only to find the item out of stock.

    So far my experiences with Circuit City pickup have been less than stellar though. I’ve had to wait behind people doing returns to get the pickup and sometimes that just seems to take an eternity where it’d have been faster just to go into the aisle, get the item, and check out.

    Allegedly they are supposed to have separate lines for pickup but I’ve always been pushed to the back of the “customer service” line whenever I’ve just walked up and said I have an Internet pick up.

  4. Anne says:

    I think it has a lot to do with the increase in shipping prices. It seems like less places have reasonable free shipping limits, and when you do have to pay shipping, the prices paid for it are increasing–due to both prices of gas and USPS’s postal rate increases.

    I also agree with weave above: except for pre-orders of popular items that might sell out fast, pickup in store is rarely worth the hassle.

  5. catskyfire says:

    I agree wtih samurailynn . A slowed increase is not the same as a stop or a decrease.

    For my part, I’ve always been a mixed shopper. If I can get it locally for about the same price, it’s just easier. Being in an apartment, rather than a house, means that UPS was always a pain.

    For me, shipping was always the big consideration. The -item- might be cheaper, but if shipping is a lot, it just wasn’t worth it.

  6. timmus says:

    I think this is a poor sample size and it’s kind of myopic. I also hate seeing success measured in terms of RATE of growth rather than growth itself. These pundits are seeking exponential growth, which is simply not sustainable.

    It’s really simple… the economy is cool, so people aren’t interested in buying a lot of crap.

  7. chili_dog says:

    new industry growth has made people believe that unless growth is off the chart then it’s a failure. Now that lots of people are already buying online and have experienced the problems associated with returns, online buying was certain to slow.

    I guess analysts that have forgotten their MBA education of 3-5% growth as normal have also fallen into the hyper-growth percentages trap.

  8. catnapped says:

    @samurailynn: The problem is “analysts” see anything other than explosive double-digit growth as being a sign of grave trouble.

  9. Sudonum says:

    I buy it wherever it’s cheapest, and that’s usually online. I also live in a city with a population of around 150k. After growing up in Los Angeles I got used to the large selection that various merchants there offered. It’s tough to find that kind of selection in a city this size.

  10. balthisar says:

    I’m not too much of a price discriminator unless we’re talking big money, like computers, iPods, or whatnot. So I generally shop online if I can save more than $20 and don’t need it right away. I also generally shop online when I shop for others (gifts and such) because I *hate* “browsing” in stores. Finally there’re lots of good things online that just aren’t stocked locally, like my iPod2Car kit or refurbished items from the Apple store.

    I’ll go into brick-and-mortar, then, if I want/need something right away, or if it’s easier than getting it online and the price isn’t too different.

    I’ve have *great* experiences with Circuit City’s in-store pickup, and I’m not a fan of Circuit City in general (don’t really care one way or the other). I won’t shop inside Circuit City, so if it’s not available online, I don’t go there. I’ve had mixed experiences with other stores’ online pickup. They make you wait various amounts of time for email confirmation or other such nonsense.

  11. ghettoimp says:

    “In addition, online shopping, because it involves a computer, feels like work.”

    This seems really backwards to me. You don’t have to drive somewhere, park, stand in line, etc. to buy something online. Regular stores are nice to have when you need something right away, but otherwise online shopping is awfully convenient.

  12. RebekahSue says:

    Between gas prices and poor health, I find it easier to do most of my shopping online. Doing so also avoids the rude shoppers who make up the majority, or so it seems. I shop locally for such things as records (the big black vinyl things) and produce (local farms) to support small local business. When my favorite brick and mortar bookstore went under, I switched to eBay – I’d rather help an individual than the larger chains, if I can.

    While my salary over the cited past year has gone up, my medical expenses last year (including health insurance, which is not offered to part-time workers like me – see previously cited health) exceeded 64% of my takehome. I’m sorry that I can’t assist the online shopping statistics, but I simply don’t have the money.

  13. Kierst_thara says:

    I’m quite happy to make purchases online, but I find that the advantages of online purchasing are more noticeable when it comes to specialty items. For commodity items like household appliances, new release movies/games/books, practical everyday clothing etc., it’s simple enough to just head to the mall and pick up what you need. The chances of it being significantly cheaper/easier to get online are small.

    I’m far more likely to shop online for more niche-type things. An obscure author’s older works, alternative fashions that I can’t get locally, particular brands and makes of electronics that the box stores might not carry on a regular basis, that sort of thing.

    I also find gift shopping is much more satisfying online. I usually have something specific in mind that reflects the gift recipient, and it’s much easier to search online for say, an ornament shaped like a flute, or a blanket with an obscure anime character on it, or whatever, than it is to drive around to 10 different shops in town to see if they might have one. Especially around Christmas, the less time I have to spend trudging around crowded malls, the better.

  14. mwdavis says:

    Well, the only store I actually visit on a regular basis is the grocery store. I don’t go wandering around in the mall or big box stores just looking at stuff. I find “shopping-as-entertainment” to be anything but entertaining. My discretionary spending (such as it is) on books and dvds is done almost exclusively on line.

  15. Hawk07 says:

    The title is a bit misleading. It’s not that consumers are switching back to B&M, we’re just not seeing 25%+ jumps every year. Just like with cellphones, we’re reaching a point where everyone who wants one has one. Compared to 10 years ago, we’ve seen like a billion percent increase in cell sales.

  16. VA_White says:

    I shop online for almost everything except groceries because it is so much easier for me. My husband is military and gone just about all the time. (He’s been away from home for 28 of the past 30 months.)

    I work full-time and have two small kids. I also live in a city that sees 100 – 120 degree days all summer. Schlepping the kids around town in and out of car seats in blazing hot weather is not my idea of a good time. I will pay a little MORE for an item online if I do not have to go out and get it.

    I buy online, have it shipped to my office, and I carry it home with me after work. This way I eliminate door tag headaches and I don’t waste gas driving all over the city for things.

  17. iSleipnir says:

    I use to buy online a lot, and still do when I can or the price is low, but I must say that on items I’ve been buying recently I’m finding cheaper prices in town, rather than online. One of my other major purchases is cd’s and honestly, when you factor in shipping on just one cd it’s usually the same cost as in a record store, or even a boarders minus the instant gratification of having it right now.

  18. Dustbunny says:

    I’m buying a lot fewer books from Amazon and more at an actual bookstore. (Mainly because we have one of the best bookstores in the country here — Powell’s). It’s more satisfying browsing through miles of bookshelves, especially in the sci fi/fantasy section — I’m always discovering books I never would have found browsing online.

  19. tcp100 says:

    It’s not price or the shopping experience that’s paramount to me – it’s avoiding the pain of shipping.

    Living in an apartment (and actually working during the day), half the time my shipments get left at my door for anyone to steal, or get delayed, lost, misplaced, or locked in a leasing office over the weekend where I can’t get to it.

    If I can find it locally to pick up immediately for only 10-15% more, I’m there.. And hey, some things I need faster than overnight shipping can get to me, which usually kills the cost benefit anyways.

  20. MentalDisconnect says:

    Ironically, this article inspired me to check ebay and see if I’ve been outbid yet. Do I shop online or in “real” shops more? Well, I of course get food from a solid store, as well as clothes, I’m kinda tall and thin and never sure how something will look on me. There’s some specialty food items I buy online- exotic teas, Japanese candy, gourmet chocolate.. but if I can find it in a store, I will get it. I just prefer the immediate gratification of getting something in a store- plus no shipping cost.

    In summary: Online is better for browsing and finding new things, comparing prices, and reducing my footwork (plus I really dislike crowds or being out of my house for too long…)

    Brick and mortar is good for immediate gratification, and good if I’m going there anyway, but I don’t have a car and so that limits my exploring.

    I’m not sure which place is worse at preventing impulse buying- I don’t really have a problem with that but if I see a good deal on something I’ve wanted for a while… I think brick and mortar. More stuff there than I’m looking for. Might be tempted to pick up a cool t-shirt when that’s not what I came there for. But the convenience of shopping online makes it tempting, too..

    Argh! I’m boring myself. Have a nice day.

  21. zolielo says:

    Ah increasing at a decreasing rate…

    For me personally I try to balance out: supporting local “Mom and Pops,” local taxes, transportation costs, shipping costs, availability of items, crowds, speed of purchase, and irrational “gut” fellings. :)

  22. Crazytree says:

    I have the answer:

    everyone has maxed out their cards, having spent the last 5 years buying shit online!

  23. dantsea says:

    Others have crunched the numbers, so I’ll nod in agreement with them. As for personal experience:

    While buying from big shops like Amazon is usually fast and reliable, most of the stuff they have that I’d want I can find within a 20-minute walk of my house (I live in San Francisco) at similar prices. Buying from smaller/niche shops has been so hit or miss that I don’t often find it worth the trouble.

    I can’t tell you how many times I’ve run up against shops that are happy to charge you for second day or overnight shipping… but leave out the part where that happens once they get around to fulfilling the order in a couple of days or maybe a week. Um, HELLO, if I’m paying for expedited delivery I think that’s a pretty good indicator I don’t want to wait very long.

    Then there are the shops that proudly trumpet that they have what I want in stock, only to ‘fess up that what I want is backordered when I call a week later to ask why they haven’t shipped anything.

    Finally, there’s the delivery services who love to door-hanger and run instead of actually knocking and delivering, meaning I have to trundle down to their warehouse a couple hours or a day later.

    I end up having to leave my house and deal with traffic and people to pick up my purchase anyway, so much for the convenience and savings.

  24. Trai_Dep says:

    @VA_White: “I shop online for almost everything except groceries because it is so much easier for me. My husband is military and gone just about all the time. (He’s been away from home for 28 of the past 30 months.)”

    Off-topic, but sympathies to you and much respect for your hubby! :)

  25. bdgbill says:

    I buy a lot of gadgets and tech stuff both for myself and for my company. I am an occasional online shopper.

    I always use websites to research products but usually end up visiting a store to buy. It is amazing to me how many hi profile websites are terribly designed.

    In order to buy online I need answers to the following questions:

    1.Shipping policy. I am in Canada and often cannot even find out if the site ships to Canada or not by reading the site. I am not going to send an email and wait for an answer.

    2.Shipping cost. I want to know the full cost of my order including shipping BEFORE I provide any personal information except for postal code. Many, Many sites will not tell you until you have filled out the CC info.

    3.Are all the items in my order in stock or not? All too often I have placed an order online only to be sent a note 5 minutes after my card has been charged that the item is not in stock. This often leads to weeks of sending email, being put on perma hold on the phone, etc etc. I will never let this happen again.

    4.How much am I going to save over the in-store price? Based on my own experiences, online shopping is risky. In order to take the risk I need to save a SUBSTANTIAL amount over the in-store price including shipping. This is especially true for first time orders from unknown sites.

    5.What is the reputation of the site? I always google sites before placing my first order. Several times this has led me not to purchase from that site (latest was Tiger Direct).

  26. tigerjade says:

    After we moved from a city to a rural area, we REALLY increased our online buying. I’d rather have Amazon ship me a book than drive 30 min to the nearest bookstore and fight the crowds. Plus, it’s cheaper to have it shipped directly here rather than have it shipped to the store and THEN have me spend gas & time to go get it & bring it back.

  27. loudguitars says:

    The key for my fellow apartment-dwellers: Have stuff shipped to your office. I work (bare minimum) 60 hours a week, so I end up shopping online a lot since by the time I’m done with work, most stores are closed. But since I can just have stuff shipped to my office, it’s really not a big deal. The other good news is unless your coworkers are a bunch of thieving bastards, you don’t have to worry about your stuff getting stolen if it comes while you’ve stepped away.

    I’m not as concerned with waiting to get an item shipped since most of the time I don’t get out of work early enough to buy it at a B&M anyway, so I’d be waiting for something for however long it took me to fight my way to Best Buy on the weekend. I’ve also found that a lot of stores, particularly Amazon, vastly overestimate how long it will take to ship something, so that you are happy when it shows up way before their estimate.

  28. Grrrrrrr, now with two buns made of bacon. says:

    I still buy as much online as I did 5 years ago (although monetarily, I don’t think my income goes as far as it used to).

    As with anything new, there’s bound to be a peak and then a leveling off. Perhaps people miss “going out to shop” (I don’t) and are going back to brick-and-mortar stores for the social aspect, or maybe brick-and-mortar stores realized that they had to find ways to compete with online retailers and have thus done so successfully.

    I think the obituary for online commerce is a bit premature.

  29. a_m_m_b says:

    @VA_White: we do the same or at least wait til after sundown. less expense, less fuss & only 1 trip for pick up at my post box (worth the expense as our apt mail boxes have been vandalized 2x in the last year & my employer forbids deliveries to work) no whining about the heat by either us or the kids ;)

  30. synergy says:

    The real question is, has buying gone down only for online stores or for both online and brick and mortar ones too. Maybe people just don’t have money to shop til they drop anymore.

  31. facework says:

    Ordering big-ticket items online is too risky. The delivery systems (UPS) are unreliable.

    I send lots of gifts from Amazon, and use a variety of websites to order accessories/companion pieces to pricier gadgets I buy in stores. Also, hobby & specialty (collectibles, gaming) items are often better to buy on Ebay or other internet sites because there is a better selection that what’s available in most towns.

    Like many of the folks here, I do a lot of researching and pricing online. Then I go buy it in a brick & mortar store.

  32. alohanico says:

    Personally I can’t stand the lines and overall poor customer service from in-person shopping experiences so I’ll just stick to interacting with Hugo, my DHL guy.

  33. hoo_foot says:

    I agree with other posters that shipping plays an important part in this. I won’t buy anything online unless it is a really good deal or it’s something I can’t find elsewhere. It’s worth spending a little extra not to deal with UPS’s horrible service in my area.

  34. I’ve actually just begun exploring the possibilities of buying online. You have no idea how much cheaper it is to buy OEM rather than retail…

  35. Michael says:

    Blease disambiguate between the New York Times and The Times in future; not only is it confusing, but a bit arrogant.

  36. Mr. Gunn says:

    More from the department of misinterpreting statistics.

  37. Gev says:

    There’s a couple of things that go into my decision as to whether to buy online or in a real store.

    How quickly do I need it? Do I need it five minutes ago, or can it wait a few days?

    Is there a chance the item might be defective and I’m going to have to return it? I find it a lot less hassle to drive to the store and return a product than box the thing back up, wait for to pick it up and deliver it to the merchant and then wait for the replacement to be shipped out.

    Finally, I live in a state with 9.25% sales tax and it’s often less expensive to order online.

  38. VA_White says:

    @a_m_m_b:

    I am grateful that my job does not mind us getting deliveries at work at all. And they let us ship UPS using their corporate discount. My two favorite perks. The admin will even cart my parcel downstairs and leave it on my desk for me. Makes desert living much more pleasant, that’s for sure.

  39. superbmtsub says:

    The question should be more like “Is the average consumer making less in recent years?”

    We all know the big dogs are making bigger bucks than ever but what about the shrinking middle-class?

  40. good ole NYT, making up stupid angles on a slow news day.

  41. shdwsclan says:

    Well, most people that have money are stupid and dont know of this place…called the internet….they shop at retail outlets…like worst buy

  42. galatae says:

    I usually shop online, but I look local to buy if the price is comparable. Dealing with shipping issues is a pain and nothing beats the experience of holding something in your hand before you buy it.


    That being said, there’s something really great about Internet commerce, especially when you live rural and don’t have access to stuff.

  43. Husker-fan says:

    I shop both ways.
    My new HDTV came from a brick and mortar store.
    My newest laptop computer, and MP-3 player were purchased online.
    I buy a lot of DVD’s and probably get about 25% of them online.

    I find searching out gifts for friends and relatives, as well as new interesting gadgets for myself, to be a little easier online.
    When I look for clothes or groceries, I tend to like the in person experience best.

    I have been buying a little less lately because my old car was replaced by a new one and the car payments and slightly higher insurance have left me with a little less discretionary income. I didn’t realize I was affecting the marketplace so much.
    I’m going to ask for a raise today so I can increase my online spending and once again fill the tubes.

  44. swphreak says:

    I’d have to say I’m a pretty loyal Amazon.com shopper. Really cheap DVDs + free shipping on orders over 25$ wins everytime. I’d love to get Amazon Prime, but I just can’t fork over the 70 bucks. I had fun using the trial twice though.

    Amazon isn’t perfect though. Some things I’ve looked at ended up being cheaper at a Best Buy or Target.

    I think my online (Amazon) shopping is pretty consistant.

  45. lyndyn29 says:

    @tigerjade: Oh, me too! It’s not the crowds for me so much as the soulless suburbian big box stores; if I can’t buy local, I’d rather buy “somebody else’s local” and get exactly the product I want from an independent or small-business online seller than drive fifty miles only to have my choices limited to Wal-Mart, Target, and Best Buy.

    Okay, yes, I am an Amazon fan. But most of my Amazon purchases are marketplace products (gee, let’s see – wait until the next time I go to Denver, two hundred miles away, for the nearest Godiva Store, or have it delivered to my doorstep next week?) I rarely buy media there; I get a better deal buying wholesale from Ingram through my workplace.

  46. Ponygirl says:

    @weave:

    I’m not picking on you, but what Circuit City are you shopping at with lines? Every Circuit City I have ever entered has been a ghost town (complete with coxial cable tumbleweeds and “No Water for 40 Miles” shelf talkers.)

  47. lawyerrobert says:

    Does this article remind anyone else of that great Yogi Berra quote, “Nobody goes there anymore; it’s too crowded.”?

    It’s a sad day when the Times stoops this low. One of the things I have often admired about the times was its intellectual honesty. I guess it’s petty of me to be put off by the NYT for this article.

    As an aside, however, I think that it is preferable to shop online for big box purchases. In terms of land use and overall efficiency, I suspect that shopping online, within certain parameters, is much “greener” than shopping at a big box. (Ignoring, of course, big box inefficiencies that feed my love for clearance aisles.)