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CONFIDENCE IN INTERNET FALLS AFTER HOLIDAYS

Posted on March 29, 2002

      The Yahoo/ACNielsen Internet Confidence Index found that confidence in the Internet was down in the first quarter of 2002 after it achieved record highs in the fourth quarter of 2001.

      The Index, which measures confidence levels in Internet products and services, fell from a high of 115 in the fourth quarter of 2001 to 111 during the first quarter of 2002. The Index score for the initial survey completed in June 2001 was set at 100 for use as a baseline.

      The slight decline was driven primarily by heavy Internet users who were less confident with online order fulfillment, especially customer service and the delivery of goods, during the holiday season. Among all users, the Index found increasing concern over the security of credit card information and the level of trust with how personal information is being used.

      Despite these concerns, consumers continue to acknowledge the convenience, availability of price comparisons and access to information the Internet offers. The Index found that more people intend to shop online during the second quarter of 2002. They are projected to spend $13.8 billion in the second quarter, slightly less than had been projected for the first quarter.

      "What we're seeing here is the progression and growth of what consumers expect from the Internet, especially during the holiday shopping period," said Jennifer Dulski, director of commerce marketing at Yahoo. "The more that people use the Internet to transact, the greater the possibility there is to have a negative experience at one point or another. This points to the need for businesses to address consumer concerns regarding delivery and customer service, as well as provide greater reassurance to shoppers about their Web site's security in order to provide better experiences for their customers."

      Online customer service has shown great improvement over the past couple of years. Research from Giga Information Group, Inc. on 50 top B2C retail sites found significant improvement in e-mail support response times in the fourth quarter over the third quarter. The average time to respond to an e-mail inquiry dropped 37 percent from 19 hours to 12 hours. The response time required for a company to rank in the top 50 percent of the speediest responders also dropped, from 13 hours to 5 hours.

      The Yahoo/ACNielsen Index also found that the Internet is becoming a popular source for tax information as the U.S. income tax deadline draws near. In 2002, 15 percent of Internet users surveyed for the Index will use the Internet to file their taxes online, predominantly because of the convenience and time savings it offers. Users also report that tracking investments and paying bills are the two most commonly used online financial services, just ahead of budgeting and planning tools.

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