“Don’t Get Caught Without Distribution to the Online Nation,” Warns IDC Research

FRAMINGHAM, Mass., January 21, 1998 – Merchants who do not provide an eCommerce channel to their customers risk losing market share to their competitors, according to a new series of research reports recently released by International Data Corporation (IDC). With the online population looking more like the overall U.S. population, companies must serve their customers online, or their competitors will do it for them.

"Online users have become a nation within a nation," said Jill Frankle, program manager in IDC's Internet and eCommerce Strategies research program. "Merchants can no longer ignore the impact of the growing online population. As the percentage of PC households accessing the Internet increases, eCommerce in theU.S. also grows exponentially."

The growth of the online nation means the scope of the Net is constantly changing. Nearly 40% of home online users reported that they have been using the Web for only 6 months or less, and nearly 60% stated that they have been using it for only the last year. IDC forecasts that by 2002, 60% of the home online user population will be new users who were not on the Net in 1998.

The online population is broadening beyond just the young, wealthy, urban, and male. Households with children display strong online usage; about one out of every three households with children has online access. The percentage of women online is nearing parity with the overall population, increasing from 43% in 1997 to 48% in 1998.

Another important segment that will grow in 1999 is online buyers. These users are more engaged by the Internet as a whole, are more price sensitive, are heavier users of news and information, and are concerned about easier navigation on the Net. While online buyers do not look a lot different from other online users, they differ in one important characteristic: they buy goods and services online. Merchants should stand up and take notice of this emerging group. They are terrific prospects for the merchant who is considering offering an eCommerce distribution channel.

"Now is the time for traditional merchants to offer an eCommerce distribution channel if they do not want to get left behind. If they do not, they run the risk of losing market share to the more savvy marketer. The strength of the Internet should not be underestimated," Frankle said.

"For those who are experienced online merchants, they would be better served to focus their marketing efforts on the basics. This includes price, customer service, site performance, and easy navigation," says Barry Parr, research director in IDC's Internet and eCommerce Strategies research program. "We believe that the best prospects for online customers lie among those who have already purchased."

The series of Online Nation reports consists of the following three reports: Online Nation: 1998 U.S. Internet User Survey (IDC #B17684), Online Nation: The Buyers (IDC #B17934), and Online Nation: The Homesteaders (IDC #B17933).

Online Nation: 1998 U.S. Internet User Survey provides an overview of how online usage and electronic commerce both in the home and workplace have changed over the last year. It includes information on PC and online penetration, demographics, frequency/duration of home and work online use, online attitudes as well as the changes in media habits. It also provides detailed figures on electronic commerce from the home and work locations.

Online Nation: The Buyers provides recommendations for IT vendors, recommendations for online merchants, description of online usage, online behaviors, attitudes toward online services, eCommerce models as well as

demographics of the online buyer.

Online Nation: The Homesteaders provides recommendations for Web sites, recommendations for IT vendors, demographics on the online homesteaders, and descriptions of online homesteaders- attitudes toward online services.

These reports are available for purchase by contacting Janis Dempsey at 508-935-4145 or at jdempsey@idc.com. For additional information about IDC's Internet and eCommerce Strategies program, contact Karen Proffitt at 508-935-4771 or at kproffitt@idc.com.

About IDC

International Data Corporation is the information technology industry's most comprehensive resource on worldwide IT markets, trends, products, vendors, and geographies. IDC provides data, analysis, and advisory services to the world's leading IT suppliers as well as IS professionals in finance, insurance, entertainment, advertising, consumer goods, and publishing. IDC's research and opinions are based on the results of more than 300,000 end-user surveys, in-depth competitive analysis, broad technology coverage, and strategic analysis. IDC is committed to providing global research with local content through its 500 analysts in more than 40 countries worldwide. Additional information on IDC can be found on its Web site at http://www.idc.com.

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

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