In the initial growth phase of the Word Wide Web, its use were primarily for business to consumer applications, and the emergence of well-known internet merchants, such as Amazon.com and eBay.com, was seen. These businesses were created solely to operate on the Internet in order to directly market their goods to consumers. Initial uses of the Internet were not perceived by many businesses that do not sell their products directly to the consumer, as beneficial for transacting or interacting with their business partners. Further, because of the newness and openness of this technology, many firms felt extremely uncomfortable using this medium for their business applications. In many cases, this feeling of discomfort stems from the longstanding use of their internal systems, with which their comfort level over security was quite good.
It is important for businesses wishing to operate in Internet markets to recognise that it is
quite different from offline markets in that there are other segmentation variables that should be considered when segmenting Internet markets: Behavioural and psychographic variables. In the case of behavioural segmentation, the nature of the product and the purchase situation determine the criteria a marketer might choose to use, and include: The expected benefits to the consumer of making a particular purchase, the situation or reason for making the purchase, the frequency and quantity of purchases of a particular product. In the case of psychographic segmentation, the focus is on the individual, and their lifestyle and personality.
From a retailing perspective, the use of the Internet is an elective activity whereby consumers require effort to access retail web sites and select products. As a consequence, carefully planned shopping online may dominate, rather than impulse shopping. Also, online consumers incur costs that they can directly attribute to their shopping behaviour, such as call charges. This suggests that web sites that are not well designed, and which require the potential customer to browse through many screens before locating their chosen products, could easily deter customers from ever returning to the site. The difficulties encountered in locating web sites and searching the Web may also prevent some consumer segments from switching to the Internet to do their shopping. Additionally, consumer behaviour is also affected by gender, age and income.
Web sites focussing on the consumer vary in their function, some offer a whole suite of interactive services, whereas others just provide information. One important factor in internet retailing is that comparison and price shopping across a greater number of sites is made relatively easy.
