The Internet: Driving Volume at the Expense of Profit?

The Internet: Driving Volume at the Expense of Profit? - UK

Published Date: June 2007

Published By: Mintel International Group Ltd.

Page Count: 111

Order Code: R560-2731

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Scope of the report
Insights and Opportunities: There are clear opportunities for general insurers to exploit; Allaying security fears would help stimulate online activity; Search engine optimisation is the key to successful online marketing; Keen pricing is likely to remain a feature of Internet shopping…; …although heavy online discounting may not be inevitable
Report in Brief: Rising Internet penetration is boosting online financial services; The Internet is an effective way to target affluent consumers; Mintel’s research findings: Online product ownership; Mintel’s research findings: Purchasing behaviour; Mintel’s research findings: The importance of price; Mintel’s research findings: Attitudes towards online products
Background: Key points; Major structural changes have altered the pattern of distribution; The direct-sell revolution was the catalyst for change…; …but development of the Internet has accelerated this change; Online financial services have a number of inherent advantages; The Internet is one part of a multichannel strategy
Market Factors: Key points; Rising Internet penetration is boosting online financial services; An increase in the range of access routes will also boost usage; The sharp rise in broadband connections will also be significant; Changing lifestyles are impacting on access requirements; The Internet is performing an increasing role in people’s lives; A number of potential market barriers are also being tackled…; …although security fears continue to act as a drag on the market; Steps are being taken, but more needs to be done to allay consumer fears
Online User Profile: Key points; The Internet is an effective way to target affluent consumers; Consumers now conduct a broad range of activities online; Finance news sites offer little appeal for online browsers; Insurance and banking sites attract a rising flow of potential buyers; Financial sector still lags behind in terms of online purchases
Trade Perspective: Internet sales have increased strongly in the last few years; The Internet provides businesses with a range of benefits; Convenience and cost are the key benefits to the consumer; It allows customers to shop around; but not all are price-sensitive; Future growth in Internet sales seems assured
The Consumer - Online Product Ownership: Key points; Survey background; Almost a third of all adults can access their current account online; Two thirds of heavy Internet users hold online financial accounts; More than half of ABs and 25-34s can access their finances online; High earners are most likely to hold online financial accounts; Over half of all broadsheet readers manage their finances online; A fifth of ABs can access investment products online; More than half of all high earners hold an online savings account; One in 12 consumers have online access to four or more products; Almost half of ABs are multiple online financial account holders; Online current accounts dominate the single-product group; Lloyds TSB and HBOS have the most online account holders; Young adults are more likely to hold accounts with the ‘big five’; Internet banks have the potential to generate cross-sales; Lloyds TSB and Barclays have the highest concentration of ABC1s; Four in ten Internet users would manage all their accounts online; Over half of ABC1 18-34 Internet users would run all their finances online; Most heavy Internet users can imagine running their accounts online
The Consumer - Purchasing Behaviour: Key points; Motor insurance is the most common financial online purchase; Four in ten Internet users bought financial products online; The 45-54s form a key target audience for online travel policies; Almost six in ten high earners bought financial products online; One in seven adults bought two or more products online last year; Over a quarter of ABs and 25-34s made multiple online purchases; The Internet offers online insurers a chance to boost cross-sales; Search engines provide a key source of Internet business; Younger consumers are most likely to use search engines; ABs tend to use the broadest range of websites; Almost 19 million consumers can see themselves buying online; Six in ten 18-34s might buy a financial product online; Three in ten in the ABC1 family group might buy home cover; One in seven 25-34-year-olds would apply for a credit card online
The Consumer - The Importance of Price: Key points; The Internet is encouraging shoppers to be price-conscious; The 25-34s are most likely to compare prices when buying online; Heavy Internet users tend to be more inclined to compare prices; Online financial purchasers are particularly price-conscious; Half of Internet users would only buy discounted products online; Young adults are most expectant of online discounts; Most popular tabloid readers demand better rates online; Only a third of online savers demand preferential rates; Convenience rather than price is widely seen as the key benefit; Heavy Internet users focus more on convenience than price; Internet-exclusive offers are more likely to attract young adults; Three in ten ABs are attracted by cheaper products
The Consumer - Attitudes towards Online Products: Key points; Allaying security fears could help stimulate online activity; Price incentives hold more sway with medium Internet users; Improved security could have a big impact on 18-24s and 35-44s; Three in ten ABC1 non-subscribers expressed security fears; Only half of Internet shoppers have bought financial products online
The Future: What does Mintel’s research tell us?; Keen pricing is set to remain a feature of the online market…; …although the need for heavy discounts may not be inevitable

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