Abstract

The recent stagnation of electronic commerce highlights the need to understand contemporary online consumer behavior.  E-commerce’s slow growth has coincided with an explosion in the usage of Web 2.0 activities. These novel online venues have created many new channels for online retailers to reach buyers, yet these online activities have gone largely unstudied. This study incorporates current user demographics and Web 2.0 activities to dynamically model the determinants of two key measurements of recent online shopping, a recent purchase and the novel dependent variable, percentage of income spent online.  Regression analysis is applied to a nationally representative 2007 survey of the U.S. online population.  Determinants of a recent online purchase include, ownership of a credit card, PayPal^TM account, listening to podcasts, participating in online auctions, and for the first time, female gender.  In a second regression, positive determinants for the percentage of income spent online include, male gender, educational attainment, online auctions, instant messaging, and online dating.  Online spending increases with time online, and appears to compete with other forms of online entertainment and social networking.  These results produce snapshots of contemporary online shoppers that can be used by electronic retailers to determine which product characteristics to highlight for greatest impact, and to efficiently target specific Web 2.0 activities, such as entertainment, podcast and social network websites, to develop new and robust marketing platforms. 

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