Online Shopping Is Overrated

Data security problems and pesky online forms make Internet shopping a pain. Pro or Con?

Pro: Just Drive to the Store Instead

Online shopping is mostly a bad experience. Even the best of the online stores are pretty awful when compared with real-world brick-and-mortar shops.

In a physical store you are not asked to register before you are allowed buy anything. Neither do you have to read a “terms and conditions” agreement before you can go through checkout. In a real-world store, you don’t have to run through a list of payment options first and give your name and address and all your contact details.

Online stores ask us to do all these things. As a result, people actually dislike shopping online and use it for only two reasons—convenience and to find deals. A survey by the British pollsters YouGov found that half the people who do shop online are prepared to give up buying once they get to the checkout. If that happened in a physical store, the management would be sacked without debate. Online store owners just seem to accept it.

The high rate of shopping cart abandonment is a warning signal to Internet retailers that their customers don’t like their stores. Furthermore, a deep fear over the security of credit card details continues to plague shoppers. Online retailers are not addressing the key issues: making the shopping experience more convenient and ensuring the security of the information we give them. Until they do that, online shopping will continue to be second-rate.

Con: The Online Experience Is Improving

During the dot-com bubble, the Internet was seen as something that was going to change everything, with the traditionalist dinosaurs becoming extinct overnight and the new kids dominating the new economy.

Some years on, much of the hype has turned into dust. But the online revolution is still firmly, if quietly, under way. Since the dot-com crash of 2000, online retail shopping has grown by 210%, at an average annual rate of 21%, and accounted for a $130 billion market in 2008, according to comScore. The trend is set to continue: In the fourth quarter of 2008 online sales grew at 41 of the 50 largest U.S. chains, while their in-store sales declined.

The reasons for this inexorable growth can be summed up in one word: convenience.

For a whole category of purchases, it is simply easier and faster to buy online, and prices are often lower. Comparing prices, finding discounts and promotions, having your loyalty rewarded, and not having to travel to get the exact product you want are saving money in the downturn. But above all we love the convenience.

Also, sometimes we don’t want to have a salesperson hassling us. We want to do independent research, read reviews, and stay in control of the process.

This shows, too, in our intolerance for anything but good service online. Painful online checkout processes are met by abandoned shopping carts. And we like the freedom to switch at the click of a mouse. It keeps the retailers honest—that’s why they offer their best prices online.

Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.

Reader Comments

Strategery

The 'pro' section got it right in the second paragraph. Virtually all online stores make you register. I don't need another username and password to remember. I will only buy online if I cannot find something locally. Even though shipping times are fast, I would rather drive across town and even pay more to be able to bring home a new gadget the same day. Most of the time, there is no difference in price between a local store and an online store. Another annoying thing about online shopping is the lack of transparency--some stores make you click on an item (or add it to your cart) before you can see their best price. Many will not give you shipping details until you are well into the checkout process; perhaps this is why so many bail.

DanTe

Yep, online shopping is soooo overrated that I buy most of my stuff online. The only stuff I buy offline now-a-days is food and construction material.

Over40PreGeezer

I buy online because it is generally faster, cheaper (watch out for shipping costs, though), and more convenient. No traffic, no parking lot wars, no surly or snotty retail clerks who treat you more like an interruption in their day than a paying customer--that is if you can find a clerk.

Count Me Out

Surely BW can find something more pressing to debate than online shopping. Is this really what people are talking about around the water cooler? Is this really what needs vigorous and thoughtful examination.

Now, please excuse me, I've got to order a gift for my wife. It's located at a physical store a thousand miles from my home, and I can't get it anywhere else so I'm purchasing it online.

robert

Love the idea, but filling out those forms is murder. Have ordered on occasion; always find the system to not work seamlessly.

Mastermind

Surely not. For all my electronic needs I always shop online no matter how many forms I need to fill. Reason: 100% of the times have found cheaper deals online.

For clothes & shoes, I never shop online. Thats where online shopping cannot match the feel of being there.

Paul Sweeney

A huge amount of my discretionary spending is for items that are usually very difficult to locate in physical stores. I am a great collector of all manner of hard-to-find items (out-of-print books, collectibles, antiques, etc). Purchasing in physical stores would mean round-the-world travel and years of effort. I can get the same result in a few hours on eBay, and often at bargain prices. I am quite well-off, but buy very, very few mass consumer items available in regular shops. I have many friends and acquaintances with the same approach. Just one example--I have an antique porcelain dinner service, really exquisite, which I bought online for a quarter of the price of some new rubbish to be found at my local department store. Enough said?

James H.

Dante, I agree with you this time. I hardly ever buy anything over $50 from local retailers anymore.

And why the moaning about the forms? They are just a part of the process and 5 minutes of your time. If you're registered it takes way less time on your next transaction. You easliy lose more than 5 minutes just traveling to and from a store00and that doesn't even include the time you might spend in line.

@ Strategery: If you think the prices on cars, electronics, tires, etc. are the same price online as they are locally you're doing it wrong and you're dealing with the wrong online retailers. You can't stick with the local retailer websites for savings. I'm an online shopping veteran and I always save quite a bit on my large-dollar purchases. With a little research experience and a little patience I've very easily saved thousands of dollars over the last several years. Shipping on most items is reasonable (or even free sometimes) and you don't even pay taxes 99.9 % of the time.

Jeff B

The Luddites who are against online shopping are very likely talking about something they have little experience with. Just like there are good and bad retail stores, there are good & bad online retailers. Caveat emptor, dude.

Anyone who has shopped much on Amazon, LLBean, Target.com, etc., knows that these sites offer superior deals to physical stores, and usually free shipping. My time is too valuable to spend strolling to malls to buy what I need. I rely heavily upon Amazon, and they have never let me down. Strategery is clueless about price differentials online vs. physical stores. I comparison shop all the time, and Amazon is almost always cheapest.

mfellion

The real story is that shopping on the Internet is in two classes. Business and retail. Business sites rarely give prices, ask you to call, want some contact prior to giving a quote. None of these give the average joe any reason to use the Internet. Retail sites are just as competive as retail stores on pricing, delivery, and markdowns. Large sites rarely are the best prices. Amazon, for example, is consistently higher for many items than smaller individaul sites even if it's cheaper than a store. Ebay can also be higher, so look around. Good shopping.

Count Me Out

Ultimately it boils down to choice. The interweb gives me, the consumer, the ability to choose from a wider array of products and puts my purchasing power to work on a broader scale. I get better products at a better price and I buy more of them when I have options that are not limited by driving distance or store hours.

Mr. Jones, in supporting the idea that online shopping is overrated, breezes over questions of security and provides no agrument or evidence to support that security (or lack thereof) is a significant turn-off for shoppers--if such evidence exists, I'd love to see it.

Jeff

I'm a long term satisfied customer of Amazon.com. I've bought the usual books, DVDs, and CDs, but also large purchases such as my two HDTVs and heavy woodworking tools such as a drill press and a table saw. Shipping is free or reasonably priced and the prices are usually better than any local retailer, or are at least are very competitive.

If I do buy from a local retail store, I check the prices online and read reviews from users who bought the product. That way I know what to expect to spend and what to look for in a product before I head to the store. Many of the people I've met in retail stores are uninformed and of little help.

It is also helpful to check websites of retail stores like Wal-Mart, Sears, Target, and others before you go the your local store. I can comparison shop prices before I even leave home and go directly to the store with the item I want and the best price. Some websites even can inform you if the item is in stock at your local store. Very helpful for avoiding wasted trips.

As far as identity theft goes, as long as you are dealing with reputable online stores you have little to worry about. I've bought from online stores such as Land's End, Amazon, and Walmart.com for over 15 years now with no incident of identity theft. However I recently had my credit card number hijacked when I went to a local restaurant. It's tremendously easier to take a photo of a credit card with a cell phone than to hack into a secure website. It happened at a restaurant, but could have just as easily happened at a retail store.

Preserve

They key issues are price, quality, and convenience.

I'm sorry, but I'd rather fill out a form than drive to a store to get a $20 hdmi cable that can be had for $1 with free shipping.

rob

What a lame debate. There is no debate--just look at the ever increasing volume of online sales. Filling out that form is Soooo difficult, much harder than dragging yourself to a mall where you get to pick from the same limited selection of "global" products. And where you experience great customer service from a $7 an hour clerk who knows nothing and would rather not even be there. Credit card security? Those major security breaches that caught the headlines a couple of years ago were by brick and mortar retailers, not online merchants.

Michael

A lot of online shops from China are good-service providers.

steve

Shopping online is generally too much of a hassle, what with most people hating to fill up all the various forms, trying vainly to remember the account no. and password, while the virtual shopping cart stands with amazing stuff that one has filled it with.

DUH

Latest example: Asked to purchase a FLIP HD Nano for a Father's Day gift. Could go to Best Buy or Sears and hope they have one in stock or go to Amazon and get it wrapped and sent overnight for less than retail price. One option is pot luck and requires a lot of time--the other was placed in 5 minutes. Duh.

Adam

If I have to "create an account" to make a small purchase at a store I intend to use once, I move on.

Warren

I have discovered one advantage to online buying.

All items are new, clean boxes, and no missing parts.

Local stores carry some stuff, but parts have been removed, boxes were last dusted in 1934 and a lot of items are not stocked.

I buy 90% on line. Except for food.

Warren

Strategery

Jeff B, I stand by my statement that online shopping offers few deals. I have been watching the bluray players for several months now. Best Buy (even with their new monopoly with Circuit City gone) is either cheaper or equal to anything I can find on amazon.com, target.com, newegg.com, compusa.com, etc. The weekly ads offer even greater savings.

Sure, I could buy a refurbished, last year's model from a questionable seller with an iffy return policy and 'save' a few bucks. Or, when Best Buy offers the newest model at the price I want to pay (they often have an introductory price), I can drive there (on a Sunday even) and bring it home and use it the same day. I can also pick up a HDMI cable at a discount store for a few bucks (I will not pay $40 for a $1 cable).

I live 10 miles away from the building where crucial.com ships and it took almost a week to receive my last order.

Granted, there are some items that are not available locally that I use an online store for. But for anything else, I live in an area where there are plenty of stores and it's not very hard to get around.

'Saving' on sales tax is not a fair comparison. You are supposed to pay sales taxes on online purchases, even if it is not collected at the time of sale.

Tom Steele

Graham Jones should check and see how much money he has wasted shopping at brick and mortar stores. It is a rare moment when I can't find an item cheaper at amazon.com. And they are trustworthy, easy-to-return items to and usually free shipping.

If you are shopping in a way that you find a digital camera for $100 and it is $400 everywhere else, you are going to find online shopping frustrating. There are scams out there. But if you use review sites and stick with highly rated online stores like amazon you can't go wrong.

stone

Online shopping saves time, and nobody hassles me. MMD

Mears

Hell, it's an easy choice. If you hate driving with the creepy crawlers, hate the traffic lights that make driving a few blocks take ten minutes, then you love the alternative of online shopping.

Curtis J Wilson

Shopping is one thing, buying another. For the latter, online wins.

Alexander Hamilton

On-Line Shopping is, overall, a Godsend, e.g. supplements are 1/2 price even after shipping costs.

Regarding Tedious forms: Many sites have poor design and even submission errors, but in most cases another site will have the product with less onerous forms.

Regarding security: I use 2 options. One is PayPal; the other is a Fidelity Card Service that generates a unique one-time Master Card number for just that purchase. No one can ever use that number again, so even if a company's database is hacked, one is safe. Now let's just hope that PayPal and Fidelity have secure Databases.

Paul Jones

Shopping (or more accurately buying) online is a pain, but so is shopping in the store. There seem to be a few online retailers that basically get it right, examples being Amazon (user ratings, one-click buying) and Newegg (extensive product details, links to manufacturer info, user feedback, etc.). Zappos has amazing customer service. I like being able to see things in the store, but I have to say, that experience has become less and less fun, with sub-living wage clerks that know very little about the products they're selling (example, being told they don't carry a product while standing in front of an end-cap full of it), tedious checkout lines (where did I put that customer "appreciation" card, anyway?), long drives, out-of-stock, rain checks, sizes not available, that's in our downtown store, etc. Online has some ease-of-use and shipping cost issues to work through, but retail, especially with today's constraints, has a lot more problems to deal with. Online will only get better. Retail, excepting for food and clothes, will eventually be very lowest-common-denominator, or dead.

Robert Mladek

Good/Bad? That is a false dichotomy. There are some things I simply cannot buy online (like a pair of casual pants or a business suit) because fit is important. On the other hand, if I am buying a dress shirt or t-shirt, a picture is sufficient.

Also, living in Prague, Czech Republic, there are some things I have no other choice than to buy online.

For example, I recently had to buy Stan's No Tubes online because the nearest retail outlet with this item in stock was 8 hours drive.

Then there is price. Some things (like childrens' toys, DVDs or some software) 25%, 50%, even 75% less in the US than in Europe (isn't free trade wonderful?), so even with the cost of shipping and hassle of removing regional keys, it's still worth buying online.

Paying is something else. I never buy directly from a retailer I do not know and trust (which is rare). I either buy COD or through a third party payment service (that I trust). The last thing I would ever do (and I hope any sane person would do) is divulge my payment information to a site I am not 100% confident of.

Knock on wood. In the 10 years I have been shopping online I have never been cheated.

It also helps that my bank issued me an I-net only card and calls me for authorization any time I try to order anything over 50 euros.

But then again, that is why I chose to bank with them.

sue

Online shopping is great, as long as the vendor will provide low shipping fees. That's an annoying hidden cost that pops up at the end of an Internet shopping spree and sometimes causes me to cancel the whole thing.

Andy Cho

Online shopping is overrated? This is a joke. My taste in music is so eclectic and unusual that virtually no CDs in the music store interest me. I can find my beloved music only online (classical piano stuff). There is a book written by Chris Anderson called The Long Tail. Online shopping constitutes 10% of the sales, and it will exceed that in no time.

J. G. Hospel

My wife buys on line often. I have not heard complaints or dissatisfaction. She can compare with different online vendors' prices after she has decided what she wants. It's delivered to the door, a big time savings, gas savings, and most of the times an item savings. If I need something, I check online first and see what it costs (including shipping) and then decide where to buy, local stores or online. Online has the advantage most of the time.

Jonathan

Online shopping is definitely the way to go. It is convenient, inexpensive, and time saving.

M Tan

I mostly purchase my clothing (and even shoes) online as I only buy from Japanese web sites where the clothes are absolutely perfect and the sizing always correct. I would never dream of purchasing clothes/shoes from any online retailers other than Japanese.

Reju

Proglasses.com--please don't buy anything from them. They are so irresponsible and rude. I bought RayBan sunglasses from them, and it came in a bubble package so you can imagine the condition. But on the whole I was happy about internet shopping, but maybe we should know what to buy.

sue

Online shopping is great. I never have to set foot in a mall.

frank

People not shopping on line these days are wasting valuable time, gas, and money. Buying on line is definitely cheaper than going to a brick and mortar store. Here's a great example. I recently needed a laptop case for my son, who was leaving for college, but I didn't have time to order it online and get it delivered before he had to leave. I went to bestbuy.com, bought on the website for $69 but checked "in store pick up." They emailed me an hour later and said it was ready to be picked up. I went to the brick and mortar store in my town, looked on the rack to get a good look at the quality of the item that I bought and guess what--it was $89 in the store ($20 more than on line for the same item). Why? Overhead. Stores are more profitable online. This is the future. Anyone that cannot see this is nuts.

I own an online mall with 1,400 retailers that give me 1% to 30% cash back on all of my shopping. I use coupon codes for additional savings. Most of the time I get free shipping and pay no tax. I've saved well over $3,000 in 9 months using my mall to buy things that I needed anyway.

BUNNYDAVIES

Yo, become screen morons. Never talk to a real person again. See what is happening out there. Get a life.

Asad Hamed

Online shopping is overrated. Come on, online services are now leading worldwide. It is a business that grows minute by minute. With more and more people learning how to use the internet, it makes it very promising for the coming future.

jay

Online shopping has it benefits.

Jen

The problem with online stores is shipping. If you buy soft products, clothes, blankets, etc., go for it, but cribs can get damaged and then you don't have the convenience of returning it to stores. Sometimes the store and the online company have a good relationship; other times you get hit over the head with policy and long waits for return shipping. Plus when they do deliver, you have to worry about door nappers, unless you're in an apartment building that receives packages.

maycol magana

Personally I'd rather go to the store than shop online for 2 simple reasons. First one: I get to walk around the store and get out of the routine. Second one: Better to see what you are buying in person.

Kathy Webb

I am done with shopping online forever. If shopping at a store. I will be taxed sales tax, but that's OK since it is refundable should it be returned. When online shopping is returned there sometimes is tax, but the worst is the nonrefundable shipping both ways, also the product is never as advertised or as it looks online you just don't know what you are getting. At a store you can see, feel, smell, and know exactly what you are getting and it is 100% refundable. I have done a lot of shopping online but it is over since I have never been satisified with any of the purchases. I knew it would be ruined with a bunch of ripe-off artists, and also it is not safe.

NotForTechChallengedPeople

I bought most of my stuff online. Only things I can't buy are big and heavy things that incur expensive shipping charges. It's the biggest shopping mall, bar none. Try driving around looking for uncommon items. Do not mention the prices are usually lower. Returning/refunding is a bit tricky. But I seldom have to do that. You just need to research a bit before ordering.

ottoteller

I buy almost everything online: from car parts to all the components needed to assemble my new PC. The password and login are sure a lot easier and faster than driving to the store, parking, etc.

Besides, I don't have to listen to the bad music that almost all retailers now find essential to my shopping experience.

Fred T

No conversation about online shopping can exclude the topic of sales tax. That's the main reason people shop online. And even though they are supposed to pay a use tax, no one really does. It's funny to see people write about convenience, but you know on a $500 TV that you can buy on Amazon or at the local Bestbuy, most people will buy from Amazon to save the taxes.

Gaurav

A lot of stores do have you fill out the registration form, though in the future it seems that OpenID will be the norm. Where one can use their Google, Facebook, or Yahoo account to log into the retails website. Also things like Google cart of paypal are slowly creeping into the online retail market. I believe one of the reasons these have not yet become the industry standard is of lack of trust among the users to use their ID's in untrusted websites with the fear of loss of information. Though it is a matter of time when we start doing so, that would definitely take online shopping to the new height.

f simmons

Brick and mortar stores work great for items like food and shoes, but online shopping opens the whole world to to your shopping experience. I like sites like eBay for the common items, Ealtbay for items that can't be purchased on eBay, Overstock for great deals on new items, and my iPod has about four thousand tunes in it. Overall, most of my online shopping is done to easily obtain items that are either difficult to find or expensive in my rural Colorado location.

Vpk

The one benefit that online stores don't (and can't) provide is the satisfaction of talking to the local saleseperson. Of course, with time our need to converse with the salesperson has changed. Not too long ago, a referigerator sale would need a salesperson to help you decide; today you would need him/her while scouting around for your next car. Whatever the threshold, online stores have definitely re-defined and added variety to the entire shopping experience.

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