TECHQUAL: AC omprehensive Research Program on Technology Readiness by HC121103231832

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									   The 2000 National Technology
Readiness Survey: Implications for E-
Commerce and Internet-Based Services

     Ninth Annual Frontiers in Services Conference
                  September 23, 2000


         A. Parasuraman, University of Miami
                          &
       Charles Colby, Rockbridge Associates, Inc.
    Presentation Outline
   Overview of TR and the NTRS
   Comparison of the 1999 and 2000 NTRS
    – Properties of the TR Index
    – TR-based typology of customers

   E-Commerce-related findings from the 2000
    NTRS
    – Selected e-commerce behaviors
    – Variations across TR-based segments
 What is Technology
 Readiness [TR]?

TR refers to “people’s
propensity to embrace
and use new
technologies for
accomplishing goals
in home life and at
work”
NTRS Background & Purpose

   Developed jointly with Rockbridge
    Associates, Inc.

   Intended as an aid for effectively
    implementing technology among customers
    and employees

   Provides an in-depth view of customer
    beliefs about technology

   Profiles customers by their level of
    “Technology Readiness”
Methodology for 1999 and 2000
NTRS
 Each survey included a sample of 1000
  U.S. adults
 Respondents chosen through random
  digit dialing
 Data collected via computer-assisted
  telephone interviewing
 Survey included questions about
  technology beliefs, demographics,
  psychographics, and technology-related
  behaviors and preferences
    Drivers of Technology Readiness

Contributors   Optimism     Innovativeness



                Technology Readiness


 Inhibitors    Discomfort     Insecurity
Definitions of the TRI Dimensions
 Optimism: Positive view of technology;
  belief that it offers increased control,
  flexibility and efficiency
 Innovativeness: Tendency to be a
  technology pioneer and thought leader
 Discomfort: Perceived lack of control over
  technology and a feeling of being
  overwhelmed by it
 Insecurity: Distrust of technology and
  skepticism about its working properly
       TR Scores by Dimension and
               Overall TRI
        5
                          1999          2000
        4

Mean TR 3
Scores
        2

        1

        0
            OPT.   INN.          DIS.          INS.   TRI
Technology Readiness Index
Distribution [Mean = 100]

                         100                    1999
                         100
                                                2000




                    92         107
      Low TR        91         107     High TR
   (Lower Third)                     (Upper Third)
                    Medium TR
                   (Middle Third)
 The TRI’s Reliability [Coefficient Alphas]

                         1999         2000
 Optimism [10 items]……. .81           .81

 Innovativeness   [7 items]. .80      .81

 Discomfort    [10 items]….. .75      .74

 Insecurity   [9 items]……... .74      .74
    Shared Variance among TR Dimensions


    100

    80
                               1999       2000
    60
%
    40

    20

     0
          Opt-Inn   Opt-Dis   Opt-Ins   Inn-Dis   Inn-Ins   Dis-Ins
   Characteristics of Technology
   Segments

          Optimism Innovative-     Dis-
     Insecur-                 ness      comfort
     ity
Explorers High      High      Low       Low
Pioneers  High      High      High      High
Skeptics Low        Low       Low       Low
Paranoids High      Low       High      High
Laggards Low        Low       High      High
Typology of Technology Customers: Mean TR
Scores for Segments (Population Mean = 100)

       140
                                               1999          2000
       120
       100
        80
        60
        40
        20
         0




                                                             Laggards
             Explorers




                                    Skeptics
                         Pioneers




                                                 Paranoids
Typology of Technology Customers:
Percent of Population in Each Segment

     30
                                            1999         2000
     25
     20
 %   15
     10
     5
     0
          Explorers


                      Pioneers




                                                         Laggards
                                 Skeptics


                                             Paranoids
Typology of Technology Customers:
Mean Age in Each Segment

    60
                                           1999         2000
    50
                                                                    Overall
    40                                                             Mean: 43.5
    30
    20
    10
     0




                                                        Laggards
         Explorers




                                Skeptics
                     Pioneers




                                            Paranoids
Typology of Technology Customers:
Percent of Males in Each Segment

     70
                                            1999         2000
     60
     50                                                             50%
     40
 %   30
     20
     10
      0




                                                         Laggards
          Explorers




                                 Skeptics
                      Pioneers




                                             Paranoids
 Typology of Technology Customers:
 Mean Household Income (in 000’s of US$)

         60
                                                 1999         2000
         50                                                               Overall
         40
                                                                         Mean: 48
US$ 000’s 30
         20
         10
          0




                                                              Laggards
               Explorers




                                      Skeptics
                           Pioneers




                                                  Paranoids
Research Implications
Need to examine:
 Temporal stability of TR scores over the
  long term -- e.g., Are some dimensions more
  stable than others?
 Possible variations in TR across countries
  and cultures, reasons for such variations,
  and their implications for multinational
  companies.
 Individual-specific drivers (e.g.,
  psychographics) and consequences (e.g.,
  satisfaction) of TR in past year, only 16%
  checked their bank
 E-commerce in 2000

Findings from the 2000 NTRS
    Concern over the Safety of E-
    Commerce Persists
                                      1999   2000
“Do not consider it safe giving out
                                     77%     73%
  a credit card number over a
  computer”
“Do not feel confident doing
                                     67%     70%
  business with a place that can
  only be reached online”
“Do not consider it safe to do any
                                     58%     59%
  kind of financial business online”
    Despite Concerns, E-Commerce
    Continues to Grow, Especially for
    Items Costing $10 or More

                     Purchase Incidence (past year)

    35
                                    29
    30
    25
    20                        17                      16     1999
%               13
    15    11                                                 2000
                                                9
    10
     5
     0
         Items < $10      Items between $10   Items > $100
                              and $100
    Explorers are Leading the Pack (almost
    half make big ticket purchases), Followed
    by Pioneers and Skeptics

               Incidence of Online Purchase (past year)

    100

     80                                       Browsed
                                              >$100
%    60
                                              Online Auction
     40

     20

      0
          Explorers   Pioneers   Skeptics   Paranoids   Laggards
What are People Buying Online?

        Males               Females
 Books/magazines      Books/Magazines
  (49%)                 (48%)
 Computer             Clothing (37%)
  Equipment (44%)      Music (29%)
 Music (42%)

                Businesses
  Computer Software, Computer
   Hardware, Books, Office Supplies,
   Airline Travel
Motivations for Buying Online

 70%   of purchases are for personal
  use, 12% business, 17% gifts
 Reasons for buying online include:
  convenience, availability (items not
  found in a nearby store), better
  prices
 Major reason for NOT buying online
  is a concern about safety/security
 Purchases tend to be planned
The Most Important Features of E-
Commerce Sites are those that Protect
and Reassure the Consumer
% Extremely/Very Important



                             90
                             80
                             70
                             60
                             50
                             40
                             30
                             20
                             10
                              0
                                  Privacy   Return     Explanation Warranties   Clear
                                   Policy   Policies   of Shipping            Agreements
                                                           Fees
    The More Popular E-Commerce Sites
    Stand Out by Offering Availability,
    Selection and Ease of Use; Needs
    Differ by TR-Level
                 What Makes a Site Your Favorite?

    50
    40
    30                                               Low TR*
%                                                    Medium TR
    20
                                                     High TR
    10
     0
         Availability Selection   Easy to   Prices
                                   Use

           * Note: Small sample size (n=22) for Low TR group
 Other Observations about E-
 Commerce
 Most Preferred Method of Customer
  Service is Telephone Support
 Credit Cards are the Preferred and Most
  Widely Used Payment Method for
  Merchandise
 Services seem to lag behind products;
  e.g., account online & only 5% have
  signed up for telecom service online
    Who is Buying Online?
 50% are female
 Fastest growth among females and medium-
  TR consumers
 Slightly younger (55% are under 40, versus
  45% of U.S.)
 Much more educated (41% have 4 yr. college
  degree versus 24% of U.S.)
 Higher income (median income $52K versus
  $40K for all U.S.)
 Similar marital, family and ethnic
  background
Implications
    Managerial Implications
 Insecurity and Discomfort are major
  inhibitors of e-commerce; consumer beliefs
  so far remain unchanged
 E-commerce providers can address these
  concerns through: secure sites, privacy
  policies, warranties, clear information,
  telephone support
 Less techno-ready consumers seek out sites
  for their availability of unique goods; they
  are less price conscious than more techno-
  ready consumers
 It is critical for providers to test their sites
  for ease of navigation and use
For More Information...

 Watch  out for Techno-Ready
  Marketing: How and Why Your
  Customers Acquire Technology, A.
  Parasuraman and Charles Colby, Free
  Press, NY, May 2001
 Visit www.rockresearch.com and select
  “Technology Readiness”

								
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