While digital gap remains, 4.9 million African-Americans now on-line
African-Americans constitute the largest ethnic minority goup on-line,with 4.9 million users, according to research reported by Cyber Dialogue,a New York research firm. Just over one-quarter (28 percent) of U.S. adult African- Americans are online; 28 percent of adult Hispanics are also on-line. Cyber Dialogue’s data also reveals that the digital gap between whites and ethnic minorities remains. Currently in the U.S., only 31 percent of the total adult ethnic minority population is on-line, compared to 37 percent of the total adult white population.
Notable among the findings is that African-Americans on-line are younger, wealthier, and more educated than their coun.terparts who are still off-line. For instance, Cyber Dialogue found that nearly 49 percent of on-line adult African- Americans are under age 30, versus 23 percent for their non-user counterparts. The average income of online African-Americans is $58,300, and 18 percent have incomes of $75,000 or more, compared to only 1 percent of African-American nonusers. In the education category, more than one-third of those on-line have graduated from college, while the non-user number is less than 10 percent.
Similar to the general on-line population, African-Americans users are most likely to use news and travel content. But this group is also significantly more likely than the general on-line population to use entertainment (music and gaming, in particular) content and parenting or job search sites. African-Americans who are on-line also exhibit shopping habits that differ markedly from the rest of the Intemet population. In particular, on-line African-Americans are intensive Internet music shoppers, where they are more likely than the general on-line population to make purchases. Still, in several retailing categories, the number of African-Americans making transactions on-line is behind the total on-line population, particularly in the travel and clothing sectors.
"While we found that on-line African-Americans are more likely to state they intend to beNn making online purchases than the total on-line adult population, the same goup also expressed a higher degee of concern regarding security and privacy than the total on-line population," says Idil Cakim, an analyst for Cyber Dialogue.
"These results reinforce the importance of recognizing how topics such as security and privacy can geatly impact the number of on-line transactions a site completes."
Other findings include:
- On-line African-Americans are more likely than others to go on-line from academic and public locations.
- On-lineAfrican-Americans are disproportionately more likely to registeron Web sites than the total user population.
- Non-users among African-Americans are more likely than the typical non-user to be interested in learning more about the Internet.
These findings are from Cyber Dialogue’s quarterly American Internet User Survey (AIUS), which consists of in-depth interviews with 1,000.Internet users and 1,000 nonusers.
No name-selling, please
An overwhelming majority of consumers find it unacceptable for a financial institution to sell information about their customers for marketing purposes, according to a recent research study by Atlanta-based Synergistics Research Corp. entitled, “The Future of Direct Mail and Telemarketing of Financial Services.” More than eight in 10 consumers with household income of $25K or more say it is unacceptable for a financial institution to sell their customers’ names and telephone numbers to marketers. This is particularly unacceptable to those age 65 or older, being reported by more than nine in 10 or this group. In addition, survey results show more than half of consumers have asked to be removed from mailing lists, and an almost equal number have asked to be removed from telemarketing lists.
Decision-makers act on ads
Businesspeople rely on advertising to get information they need to do their job. Almost all (95.7 percent) of the executives, managers, and other purchase decision-makers surveyed by Penton Research Services, Cleveland, said they read advertising to learn about new supplies in the market (84.6 percent) and to stay current with supplies (80.7 percent).
Penton Research Services asked respondents how many times in the past year they had taken such actions as visiting an advertiser’s Web site, calling an advertiser for more information, sending in a coupon, and so on. When the researchers added everything up, they found that buyers took an average 272 actions over the past year to obtain information from advertisers.
This information is taken from a telephone survey of executives, managers, purchasing agents, engineers, and other decision-making in the U.S. A total of 1,200 interviews were completed with respondents in a broad range of industries, including manufacturing, services, transportation, utilities, wholesale trade and construction. These and other research findings are outlined in a series of 100 PRO (Penton Research Overview) Reports.
First-year NASCAR sponsorships work for Viagra, Lycos
According to a recent study by Performance Research, Newport, R.I., Lycos and Viagra gained consumer recognition with their new presence in NASCAR sponsorship. The press coverage of Lycos’ lastminute signing of a sponsorship ageement with driver Johnny Benson the night before the Daytona 500 race combined with Benson’s unexpectedly strong showing towards the end of the race boosted Lycos’ exposure as evidenced by the 12 percent awareness among NASCAR fans, ranking it first among all other first-year Winston Cup sponsors. Boding well for Lycos is the fact that the study also found that Internet access among NASCAR fans has increased nearly 20 percentage points from 53 percent in July of 1998 to 70 percent in February of 2000.
Also getting a boost was Viagra, which had impressive consumer awareness without even qualifying for the Daytona 500. Viagra received 5 percent unaided sponsorship awareness in its first year as a Winston Cup sponsor, even though driver Jeff Fuller failed to qualify for the Daytona 500.
How important is this awareness? Past studies have shown that given the choice between two products of equal cost, 72 percent of NASCAR fans would almost always or frequently choose the brand they associate with NASCAR over one that is not associated with NASCAR. When there is a price differential, 46 percent mentioned that they would purchase a brand costing as much as 10 percent more if associated with NASCAR over a less expensive brand that is not associated with NASCAR.
In fact, 43 percent of NASCAR fans were influenced enough by NASCAR sponsorships to switch from their normal brand of a grocery store item to try a different brand. Tide came up as a beneficiary of this sentiment with 20 percent of all consumers questioned switching from their normal brand to try Tide. Among others mentioned most often were Kellogg’s, Cheerios, Coca-Cola, M&M’s and Budweiser.
The current demographics of NASCAR fans were recorded in this study as well. The typical fan was measured as male (68 percent), married (73 percent), a high-school graduate (97 percent) with a total household income of $50,000 or more (68 percent).
Two hundred telephone interviews were conducted with a random nationwide sample of NASCAR TV viewers 48 hours after the 2000 Daytona 500 had taken place. The margin of error is +/-5 percent.
What drives financial service choices for small businesses?
Personal, not business, relationships drive the process of choosing financial services for sma!l businesses, according to a recent study. The study was carried out in support of the launch of "Perspectives on Small Business," a multi-study, multi-year research protocol designed for providers of financial services to small businesses, conducted by Brightwork Partners, an Old Greenwich, Conn.-based consulting firm, and Greenfield Online, a Wilton, Conn., research firm.
Some 487 owners or senior executives of companies with fewer than 100 people participated in the first of a series of research studies that will be conducted on-line to learn more about this segment of the American economy. The first in this series of studies focused on how decisions are made about financial services.
Small-business owners represented in this survey indicate that they chose business providers for investments, banking, property and casualty insurance, credit, disability insurance and legal services primarily because of an existing personal relationship.
Tax preparation and tax planning, however, together with retirement plans, and life and health insurance are typically selected based on a business relationship. "We’ve known for a long time that small-business owners tend to select the same providers fo their business and personal needs," says Ronald L. Bush, a principal of Brightwork Partners, "but we’ve never been clear on which side of the relationship leads the selection process."
Among small businesses with 10 people or more, however, the overlap in provider usage is smaller and the weight of the business side greater in the provider selection process. The selection of a provider for life insurance, health insurance, credit products, retirement plans, tax planning and preparation and banking is based on the business relationship, not on the retail relationship.
"Financial services marketers targeting small businesses and smallbusiness owners need to realize that there’s no single magic formula for developing this market," Bush says. "The research shows that leveraging a retail base only works for some products and only up to a certain size of business, while leveraging an institutional relationship works only so far down the size continuum and only for certain products as well."
The study was fielded in November to a sample of small business owners drawn from Greenfield Online’s research panel.
Auto shoppers prefer e-mail contacts
Car shoppers who visit auto dealer Web sites prefer, by an overwhelming majority, to have dealers first interact with them by email rather than phone, according to a study of on-line shoppers conducted by Friedman-Swift Associates, a Cincinnati automotive market research firm, and The Cobalt Group, a provider of business-to-business services to the automotive industry. The research study surveyed 934 consumers who visited Cobalt’s DealerNet (www.dealernet.com) in November and December 1999. According to Judy George, senior vice president of Friedman-Swift and coordinator of the research study, 82 percent of those surveyed preferred an e-mail response to their initial on-line inquiries. While 10 percent expressed no preference, only 7 percent asked for a return phone call, and only one percent requested a fax. "Consumers are saying, loud and clear, ’Don’t call us’ - at least not at first," George says. "Undoubtedly, most on-line car shoppers will end up speaking by phone or in person with someone at a dealership before they buy a car. But they prefer that these spoken interactions come a little later in the buying process."
For auto dealers, this preference might signal a change in hiring practices. "Rather than relying solely on salespeople with strong verbal skills to build relationships with customers, dealers will also need to have salespeople with strong writing skills," George says. "To keep on-line shoppers interested, dealers must respond in a way that makes those shoppers feel comfortable - and do it in a timely fashion."
The research also showed that 82 percent of the respondents would like dealers to respond to their requests for information in one day or less. "About 55 percent of dealers responded in that time period," George says. "But 19 percent of dealers never responded to shoppers’ inquiries at all. We expect these numbers to improve, however, as more dealers actively embrace Internet technology."
The individuals surveyed were serious shoppers. Of the total sample, 77 percent intended to pur chase a vehicle in the next year and 40 percent planned a purchase in the next two months. Key findings from the research study are posted at www.friedmanswift.com. The research findings have a margin of error of +/-3.2 percent.
Cinergy, CDNOW tops in on-line customer service
Findings from a global research study showed that two U.S. firms, Cinergy and CDNOW, scored a perfect 100 percent rating for providing exemplary e-service. The study, performed by Socratic/Modalis, a San Francisco research firm, featured more than 1,200 companies worldwide - including the U.S. Fortune 500, Germany’s Die Welt 500 and the largest Internet firms in both regions. In the U.S., 551 companies were rated by professional usability specialists who judged Web sites on contact accessibility - the ease in locating and the quality of on-line information; response readiness and speed; and the quality of response provided. The two companies found to be "exemplary" in their Web site design and quick response to on-line inquiries each received perfect scores in all categories. CDNOW, www.cdnow.com, is an on-line music destination offering products, reviews, news, customized shopping features, and more. "This site includes quick and simple forms for communicating questions and includes a very thorough ’help desk’ with well prepared and frequently asked questions," says Bill MacElroy, president of Socratic/Modalis. "Representatives reply to e-mail questions very quickly with personalized, detailed responses." Cinergy, www.cinergy.com, is a diversified energy company primarily serving Indiana, Ohio and Kentucky. "Examples of good on-line service can be found in almost every industry," says MacElroy. "Cinergy’s site had unusually easy-to-use forms for questions and feedback. A manager in the company responded to a request of the day in to our question the company’s fuel mix policies. The in-depth answer used our evaluator’s name, provided additional links and closed with his own name and e-mail address for further follow-up. This type of response was both unexpected and way above the norm."
Eleven other U.S. companies received outstanding ratings of over 90 percent for overall successful on-line customer service systems. These included: AmeriSource Health (wholesalers) 93 percent; Ask Jeeves (Internet search engine) 93 percent; Central & South West (utility provider) 93 percent; CVS (food and drug) 93 percent; Flowers Industries (food) 93 percent; International Paper (forest and paper) 93 percent; Reliance Group Holdings (insurance) 93 percent; American Electric Power (utility provider) 90 percent; AMP (electronics) 90 percent; Niagara Mohawk Power (utility provider) 90 percent; R.R. Donnelley & Sons (publishing) 90 percent.
Restaurant growth down, sales up
Restaurant unit growth was virtually nonexistent, up only 0.4 percent in 1999, compared to 1998’s growth of 2.3 percent. However, this slowdown in unit expansion helped, not hindered, the industry, according to information released by the NPD Foodservice Information Group, a division of The NPD Group, Inc., Port Washington, N.Y. Despite flagging unit growth, sales were up 6 percent across all industry segments, the firm reports.
Unit growth for quick-service restaurants as a group was up just 1 percent, according to NPD ReCount. Starbucks, Papa John’s, Burger King, Taco Bell and Quizno’s added the most units during the year. Conversely, quick-service restaurants saw a 3.3 percent same-store sales increase for the year ending October 1999, compared to 1998’s 2.4 percent samestore sales growth, according to SalesTrac Weekly, a product of the NPD Foodservice Information Group. Quick-service heavy hitters Dunkln’ Donuts, KFC, Domino’s and Subway all experienced much higher same-store sales growth than unit growth in 1999.
Unit gowth for full-service restaurants was flat in 1999. Applebee’s, Denny’s, Waffle House, Outback Steakhouse and Ruby Tuesday’s were the top 1999 unit gainers in the full-service category.
"The slowdown in unit development solidifies the healthy foundation that restaurant operators have built in the past two years. By focusing on building unit sales rather than unit expansion, operators are finding a way to increase income without increasing costs at the same time," says Bob O’Brien, president, NPD Foodservice Information Group.
While overall unit gowth was stagnant, some concepts did buck the trend. Bagel shops boasted a 47 percent increase in unit gowth, up from 16 percent in 1998. Bagels, gourmet coffee, bar and grill and juice/smoothie concepts gew fastest among restaurant concepts in 1999. Starbucks, with a unit gain of 474 stores in 1999 over 1998, topped the list of fastest growing major restaurant chains in unit terms. Other leaders included Papa John’s Pizza, Outback Stealdaouse and Schlotzky’s Deli. Seafood, chicken and pizza restaurant concepts declined in unit count in 1999.
The nation’s mid-sized cities showed the fastest 1999 growth in number of restaurants. The Green Bay-Appleton, Wis., area was up 75 units from 1998’s count of 1,501 restaurants, a 5 percent increase. Tulsa, Okla., and Chattanooga, Tenn., were up 4 percent each. Restaurant unit counts for major metropolitan areas Miami, Los Angeles, Chicago, and Philadelphia each decreased 2 percent in 1999.