 |
Real Estate News and Advice |
November 10, 2009 |
|
|
|
|
 Understanding the Internet Consumer
by Blanche Evans
Since the Internet is still in its infancy, much of the information that researchers have gathered about the online shopping habits of consumers is of questionable use to Realtors. They don't sell toys or stocks online, so many of the statistics gathered don't apply. Yet, it is being proven that the Realtor's service model has as valid a place in online marketing as the most commodity-oriented business. Knowing the demographics and shopping habits of online consumers could be invaluable to Realtors, particularly when examined alongside the known traffic habits of online home buyers. These are important clues to the mindsets of Internet consumers and in developing a business model which will not only serve this new category of consumer, but serve the interests of the Internet-enabled Realtor as well. "More than 2 of every 5 people in North America are now Internet users, and the Web is becoming an integral part of daily life," says Mark Resch, Executive Vice President of CommerceNet. "With more than 30% of users being Internet consumers, we're seeing a tidal wave of e-commerce in North America." With the Internet growing by 760 new users an hour, there is reasonable certainty that most service providers will target online consumers, despite the relatively low success rates that many Realtors have experienced on the Internet thus far. In a recent NAR/Realtor.com survey of Internet-enabled Realtors, most averaged about one percent of their business online. This is an astoundingly low number considering the high traffic numbers that many real estate-oriented sites receive. Realtor.com, for example, boasts 4 million page views a day. Who are these online consumers? What are their goals? What do they want to accomplish? Is the online experience better or more difficult for the Internet-enabled consumer? How can Realtors make the experience better? These are the questions that must be answered if the industry is going to profit from using the Internet. And this is surely a viable goal considering that the Internet is instrumental in reducing costs to both service providers and consumers. The first thing to throw out is any notion that the Internet consumer will mirror offline demographics. According to the latest demographic trends, the home buying Internet user of the immediate future may surprise many - she is likely to be female, in her late thirties, single or part of a non-traditional household, perhaps with no children living at home, and with a high median income of $63,300 per year or more. While the largest group of home buyers are first-time homebuyers, the Internet home buyer is likely to be shopping for her third home. Women on the Internet Already we are learning that the typical Internet user is quickly growing to be dominantly female. Women have made substantial gains in Internet usage. In 1995, they represented 33 per cent of total Internet users, today they are 46 percent, a closer reflection of their representation of 51-52 percent of the population at large. By 2002, however, they will represent 60 percent of online traffic. We also know that women search differently from men. According to the most recent Nielson/Netratings, women seek web sites with heavy content in quality of life and health issues. Men shop primarily for information about finances and sports. But that is changing as more women are heads of households. What has not changed for women is that they still shoulder the burden of the second shift, taking care of household duties as well as earning a living for themselves and their families. According to the founder of Womensnet.net Melody Wigdahl-Hahn, most Internet marketers miss the boat when it comes to women. "Women are multi-taskers," explains Wigdahl-Hahn. "The average woman has ten minutes to surf. She needs to be able to find and review about three new sources instead of sorting through thousands of things that aren't relevant to her. "Anyone who wants to market services to women on the Internet had better keep time, ease of use, and multi-function in mind," advises Wigdahl-Hahn, who is currently adding free marketing features on her woman's portal specifically for female Realtors. Baby boomers and Generation X Since beginning its survey of Internet users over 5 years ago, the Internet Demographic Study performed every six to nine months by Nielson Media Research and CommerceNet has shown a dramatic increase in Internet users. Other surveys show that the two fastest growing groups on the Internet are the baby boomers and and generation X, which also are the two target groups for home buying services. The boomers are the wealthiest generation in modern history, but they may soon be overtaken in wealth by generation X. The boomers are shopping for their third home or moving into their final move-up home. By many accounts, the boomer is materialistic, competitive, and interested in his/her own pleasure. They appreciate service and are willing to pay handsomely for it. They follow traditional sources of financial advice - stock brokers they can call on the phone, mortgage bankers they call by name, and Realtors to whom they have been referred. The generation X'er, is skeptical, aloof, elitist, and pragmatic. They don't believe in brand identity alone and are less trusting of traditional sources. As first-time homebuyers and first-time move-up buyers, they are careful with their money, including deciding whether Realtors are worth their commissions. This is the generation that is driving open information consumerism. They were weaned on the Internet, and most are at least computer literate. And they have money. According to American Demographics magazine, writer Kendra L. Darko, notes that "the number of unattached 18 to 24-year-olds making over $50,000 a year grew by 75 percent from 1994 to 1997, while the number of single 25 to 44 year-olds making the same amount grew by 59 percent." "Six-figure earners in both categories also showed respectable growth: 38,000 singles aged 18 to 24 made over $100,000 in 1997, an increase of 65 percent over 1994, while 241,000 25-to-44 year olds did the same, a 35 percent increase," wrote Ms. Darko. The New Generation Gap The NAR profile of the typical real estate professional is a sales associate in his or her late 40s, and brokers in his or her early 50s. Shockingly, only six percent of Realtors are under the age of 29, a complete demographic reversal of the age demographics in most professions. Clearly, young professionals and older Realtors are in danger of a communication gap due to the differences in generations and their approach to problem solving such as finding a home, or finding professional assistance. One Realtor, Steve Jacobson of Brian Logan Real Estate in Washington, was quoted in a recent Realty Times article, as finding the generations very different in how they buy homes. He said, "The problem is, X'ers buy from X'ers. They trust people closer to their own age." Jacobson, in his in 50s, said, "I work with a lot of young women, but these women are making $75,000 to $125,000 per year. And the thing is, they all under buy. They all are buying less house than what they can afford." Historically, said Jacobson, homebuyers have purchased as much as they could afford. Now they want to get in for as little as possible and get the tax write-offs. What is going unrecognized by the real estate industry is that these younger people are seeking their financial advice outside of the traditional sources relied upon by the boomers - banks and Realtors. The new financial gurus, such as Ric Edelman, advise home buyers to invest their money in the stock market and to keep the "money out of the house" whenever possible. Edelman advises his clients to use a real estate professional, and so do others, such as the Motley Fool brokers. However, a search of the site under "home buying" and using an agent reveals an article by David Wolpe which suggests that agents ought to be paid a transaction fee, not a commission. Learn about the Internet consumer in more detail Demographics compounded by sex and age are just a couple of denominators that are useful in understanding the online consumer and their habits and preferences. There are many others, including demographic searches by region, ethnicity, and income levels. To develop your Internet niche, you can start by finding out the statistical evidence of any demographic you wish - using the Internet, of course. For more demographical information, see the following:
Also See:
Published: December 22, 1999 Use of this article without permission is a violation of federal copyright laws. 
Related Articles:
|
Real Estate News Network
Today's Real Estate Outlook
 Spotlight
Today's Headlines
|
|||||||||||||||||
| ||||||||||||||||||
|
for Agents
Readers' Choice
|
||||||||||||||||||
Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68.
