Change in Online Population Will Dictate Changes in eBusiness Marketing Models, IDC Says

FRAMINGHAM, MA – AUGUST 28, 2000 – The demographics of the U.S. 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 (ICMM), by 2004, 103 million new users will join the ranks of the U.S. online population – a population that will then total 210 million and more closely resemble the overall U.S. populace.

 

"People from all walks of life and socioeconomic status 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. "The increase in the number of online users will mean that marketers who have in the past avoided online campaigns will need to embrace the Internet or lose out to the competition."

The growing number of U.S. online users and the change in demographics 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," Parr said. "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," Parr said.

According to IDC, adults 55 and older represent the fastest-growing group of U.S. 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 U.S. population that falls into the 18-34 age group are the most active online users. By 2004, almost 91% of this group will be online. "Many in this group already take the Internet for granted," Parr said. "In five years, they’ll expect it to be as reliable as electricity, the telephone, and running water."

Information like the above can be found in IDC's new report The Next Wave of U.S. Online Users: Forecast and Analysis, 2000-2004 (IDC #B22653). 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. To purchase the report, contact Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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