BUSINESSWEEK ONLINE : MARCH 22, 1999 ISSUE
BUSINESS WEEK E.BIZ

A Web That Looks Like the World
The Internet isn't just a geek's playground anymore. These days, everybody's logging on--and guess what that's doing to moneymaking potential

Doral Main, a 51-year-old mother of two and office manager of a low-income property company in Oakland, Calif., saves precious time by shopping the Internet for greeting cards and getaways. Her Net-newbie father, Charles F. Bumcrot, 73, goes online to buy supplies for his wood-carving hobby. Even niece Katrina, 11, finds excitement on the Web, picking gifts she wants from the Disney.com site. ''It's addictive,'' Main says of the Net.

The Web isn't mostly a hangout for techno-nerds anymore. On the cusp of a new century, it is being embraced by every age and ethnic group. Indeed, Internet demographics are quickly coming to match America's diversity. Combined BUSINESS WEEK and Harris polls conducted in January and February reveal that 46% of those who use the Internet are women, compared with 37% three years ago. And the number of cybersurfers over 50 has doubled, to 20%.

Indeed, research shows just how rapidly the Web is losing its male-geek status. Women account for more than half of new Internet users, according to a recent Pew Research Center study. By yearend, predicts Forrester Research Inc., 32% of black households in the U.S., 43% of Hispanic, and 67% of Asian-American households will be online. These proportions compare with 39% of white households expected to be online by yearend. Cybersurfing is becoming a global pastime, too: The number of Europeans hopscotching across Web sites is expected to jump from 4% of the population to 13% by 2001, says Forrester, while the number of Chinese Netizens will more than quadruple, to 9.4 million, by 2002, according to researcher International Data Corp.

A SIMPLE PLAN. For E-businesses and traditional merchants, that means adapting to the Web's mass-market following. What was cool to the propeller-head may be a turnoff to the cyber-granny. And there's no time to waste. According to the recent BUSINESS WEEK/Harris poll, the number of people who have made purchases online jumped to 31% of online users, from 19% in 1997. What's more, the new Net shoppers pack a mighty economic punch. Consider this: Some 80% of all household purchases are made or influenced by women, according to WomanTrend, a Washington consulting firm. This year, about 28% of those buying online are expected to be women, up from 21% last year, according to Forrester Research.

As the type of users snared by the Web broadens, Net operators are beginning to think outside the box. Savvy online merchants realize they have to expand their product mix to reflect the interests of different groups. And to capture new users with less technological knowhow, they're focusing on making sites more appealing and easier to use. For example, many women dislike black backgrounds, says Fran Maier, senior vice-president for marketing at Women.com Networks, a site devoted to women's issues.

Minding female tastes pays off. Although nearly twice as many men buy goods online, studies show women are boosting online commerce in areas such as travel, gifts, clothing, toys, flowers, and cards. Web women, for example, have helped iVillage grow from a tiny parenting site on America Online Inc. in 1996 to one of the Internet's bigger success stories. The New York startup has seen its number of users boom 52% from 2.1 million in April, 1998, to 3.2 million in January, according to Web ratings service Media Metrix Inc. And an initial public offering is in the works.

And move over, kids--seniors are elbowing their way online. Those aged 55 to 64 make up some 22% of online households today--and will reach 40% by 2003, according to Forrester Research. With substantial incomes--their median household incomes hover above $60,000, dwarfing younger users, Forrester says--older Netizens make an attractive target for Web businesses, ranging from florists to automotive retailers. Still, seniors are less familiar with techie lingo and gadgets, and they admit that they approach Internet shopping with some trepidation. ''It's because there's an erosion of a feeling of security,'' says Rosina Lassalle, 66. Lassalle, a Castro Valley (Calif.) homemaker, had some of her fears about online credit-card theft calmed when she bought a satellite dish last fall without any problems.

GETTING PERSONAL. Web-site operators interested in luring seniors are toning down the technology. The American Association of Retired Persons' site doesn't require lengthy downloads or complicated plug-ins, and it's light on graphics. ''Our major mantra is keeping it simple,'' says Mark D. Carpenter, AARP's online-communications developer. The site, an information source for some 33,000 members, features a popular section on computers and technology. In fact, high-tech education has driven more than 500,000 users a month to SeniorNet, a site for the over-50 crowd.

Simplicity counts, but success online really means just what it meant in the pre-Web days: matching the right goods to the right group. It's no secret why Bluemountain.com shot to the top of Media Metrix' list of popular Web sites, with 12.5 million visitors in December. The site's mix of electronic greeting cards attracts women, seniors, and minorities. Some 57% of Bluemountain's users are female, says Executive Director Jared Schutz. And while he doesn't keep data by ethnic group, he says cards that focus on ethnic and specialty subjects, such as Buddhism and Kwanzaa, are among the most popular on the site. Bluemountain also has Spanish- and French-language sections and will soon add German and Italian. ''For many of these people, we are one of the few sites that caters to them,'' Schutz says.

That's because narrowly targeted sites have a better read on what their audience wants. Women.com's online store includes everything from deals on roses to baby carriages. The site also builds a database of about 500,000 customers and zaps them E-mail notices when there's a sale on an item they are listed as liking. The approach has helped Women.com generate millions in sales from the store since it was launched last July. Rather than the price of products, ''Personalization makes women feel more comfortable making purchases,'' says Women.com's Maier.

Online businesses also are waking up to the economic clout of different ethnic groups. For example, black Americans' total buying power increased 7% in 1997, to $392 billion, according to a study of the latest Census Bureau data released in February by Target Market News Inc. in Chicago. Blacks spent $60 million--a sixfold increase--on Internet access and $3.3 billion on electronic gear. ''The black dollar spends just like the white dollar,'' says B. Keith Fulton, director of technology programs and policy at the National Urban League. Catering to African Americans helped NetNoir generate thousands of dollars a month from its Web mall. In less than a year, the mall has grown from 20 vendors to about 100, which sell everything from books and cards to clothing. As the Web morphs into tomorrow's marketplace, its shoppers will come in every culture, gender, and age group.

BY ROGER O. CROCKETT

ONLINE LINK
Complete results of a special BUSINESS WEEK/Harris Internet Poll are available at ebiz.businessweek.com


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