Study: Online firms shop Web for products, services

More than three-quarters of online small businesses shop the Web for products and services, according to a report released last week by JupiterResearch.

Fully 79 percent of small online firms use the Web for purchases. By comparison, 65 percent of online consumers bought products over the Web in 2005, according to the report, "Small-Business Online Shopping: Understanding Online Research and Purchase Behavior."

Supplier or brand familiarity and comparison shopping are two main factors affecting purchasing decisions, the report said.

"Traditionally, small businesses have bought from suppliers based on ongoing relationships and we have found that they are emulating this same purchasing behavior online," Sonal Gandhi, JupiterResearch analyst and lead author of the report, said in a statement. "Sixty-two percent of small business online purchases are influenced by familiarity or an existing online or off-line relationship with a supplier. Comparison shopping, however, also influences almost one-half of the online small business purchases."

Comparison shoppers also research offline purchases on the Web and respond more favorably to online advertising than do relationship-driven shoppers, according to the report.

The products and services for which small businesses now compare prices while online will continue to be popular, according to the report. New small businesses will not only help bring about a shift toward even more online shopping, but are expected to lead the way in buying complex products and services over the Web.

Categories such as advertising/marketing services, financial services, credit cards, vehicles and furniture will benefit most from the growing Internet expertise of small business customers and efforts by suppliers to make these online transactions easier, according to the report. Travel currently leads the small-business shopping categories, followed by computer hardware and software and office supplies.

Companies that hope to stay competitive and want to encourage more small-business customers to shift their buying to the Web must provide shoppers with comparative information, the report said. At the same time, companies should emphasize the convenience of the Web to foster relationships with small-business customers and retain their loyalty, the report said.

"The most interesting fact is that four out of five small businesses are shopping regularly for business-related products and services online," Gandhi said. "Companies that are marketing to small businesses online would be happy to know that they are there and they are shopping on a regular basis."

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