There are a number of factors driving the dramatic growth of e-commerce including broadband penetration, convenience, mobile, value, ease of use, improved marketing, social media and so on. One, perhaps less obvious driver, is the cost of gas. Recent research has identified the cost of gas as a prime motivator for people staying home and shopping online.
According to a survey conducted exclusively for Internet Retailer by Synovate, a global market research firm, more than 28% of U.S. consumers say they are shopping online more because of rising gas costs. National average gasoline prices have jumped $1.07 per gallon in the last year to an average of $3.703 Regular and $3.953 Premium, according to the U.S. Energy Information Administration.
Synovate's survey of 1000 US Adults found:
* 28.2% said recent rise in gas costs had led them to do more shopping online rather than travel to stores.
* Consumers in the Northeast and Midwest stated they did more shopping online (each at 31.5%) while fewer consumers in the South (26.8%) and West (24.5%) answered the same. These numbers reflected the price of gas in the area with the price of gas varying between $3.70 and $4.14 per gallon.
* 35.1% of consumers living in areas with a population density—defined as the total population of a defined metropolitan area and its adjacent counties—of 50,000 to 100,000 said they were shopping more online because of higher gas costs.
* Fewer shoppers but still significant in numbers, 26.3%, living in extremely rural areas said they were shopping more online because of higher gas costs.
The impact of high gas prices may have shown up in e-retail sales as early as April where online retail sales were up 19.2% year over year. Michael McNamara, vice president, research and analysis for MasterCard Advisors SpendingPulse, says higher gas prices will likely boost online sales. “We can expect consumers to make fewer shopping trips, especially on weekends, and this may contribute to an ever stronger growth for e-commerce,” he says.
The price of a gallon of gas tend to fluctuate at the pump and drivers focus on the cost of a purchased gallon of gas. However the true price of a gallon of gas is hidden from drivers and is dramatically higher. According to the International Center for Technology Assessment, the true cost of gas includes:
* Tax Subsidization of the Oil Industry
* Government Program Subsidies
* Protection Costs Involved in Oil Shipment and Motor Vehicle Services
* Environmental, Health,and Social Costs of Gasoline Usage
* Other Important Externalities of Motor Vehicle Use
Together, these external costs total $558.7 billion to $1.69 trillion per year, which, when added to the retail price of gasoline, results in a per gallon price of closer to $15.14. If consumers knew the true price of a gallon of gas is five times what they are paying at the pump, how many more would be parking their cars and shopping online?
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