The 2000 National Technology The 2000 National Technology Readiness Survey: Implications for E-Readiness Survey: Implications for E-

Commerce and Internet-Based Services Commerce and Internet-Based Services

Ninth Annual Frontiers in Services ConferenceNinth Annual Frontiers in Services Conference September 23, 2000 September 23, 2000

A. Parasuraman, University of MiamiA. Parasuraman, University of Miami&&

Charles Colby, Rockbridge Associates, Inc.Charles Colby, Rockbridge Associates, Inc.

Presentation OutlinePresentation Outline

Overview of TR and the NTRSOverview of TR and the NTRS

Comparison of the 1999 and 2000 NTRSComparison of the 1999 and 2000 NTRS

– Properties of the TR IndexProperties of the TR Index

– TR-based typology of customersTR-based typology of customers

E-Commerce-related findings from the 2000 E-Commerce-related findings from the 2000

NTRS NTRS

– Selected e-commerce behaviorsSelected e-commerce behaviors

– Variations across TR-based segmentsVariations across TR-based segments

Research and Managerial ImplicationsResearch and Managerial Implications

What is Technology What is Technology Readiness [TR]?Readiness [TR]?

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

NTRS Background & PurposeNTRS Background & Purpose

Developed jointly with Rockbridge Developed jointly with Rockbridge Associates, Inc. Associates, Inc.

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

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

Profiles customers by their level of Profiles customers by their level of “Technology Readiness”“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 ReadinessDrivers of Technology Readiness

Discomfort InsecurityInhibitors

Contributors InnovativenessOptimism

Technology Readiness

Definitions of the TRI DimensionsDefinitions 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

0

1

2

3

4

5

OPT. TRIINS.DIS.INN.

1999 2000

Mean TRScores

TR Scores by Dimension and Overall TRI

Low TR(Lower Third)

100

92 107

Technology Readiness IndexTechnology Readiness IndexDistribution [Mean = 100]Distribution [Mean = 100]

19992000

100

91 107

Medium TR(Middle Third)

High TR(Upper Third)

Optimism [10 items]……. .81 .81

Innovativeness [7 items]. .80 .81

Discomfort [10 items]….. .75 .74

Insecurity [9 items]……... .74 .74

The TRI’s Reliability [Coefficient Alphas]

1999 2000

Shared Variance among TR Dimensions

%

0

20

40

60

80

100

1999 2000

Opt-Inn Opt-Dis Opt-Ins Inn-Dis Inn-Ins Dis-Ins

Characteristics of Characteristics of Technology SegmentsTechnology Segments

OptimismOptimism Innovative-Innovative- Dis-Dis- Insecur-Insecur-nessness comfortcomfort ityity

ExplorersExplorers HighHigh HighHigh LowLow LowLow

PioneersPioneers HighHigh HighHigh HighHighHighHigh

SkepticsSkeptics LowLow LowLow LowLow LowLow

ParanoidsParanoids HighHigh LowLow HighHigh HighHigh

LaggardsLaggards LowLow LowLow HighHigh HighHigh

020

406080

100120140

Exp

lore

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Pio

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Skep

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1999 2000

Typology of Technology Customers: Mean TR Typology of Technology Customers: Mean TR Scores for Segments (Population Mean = 100)Scores for Segments (Population Mean = 100)

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25

30

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%

1999 2000

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

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10

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60

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1999 2000

Typology of Technology Customers: Typology of Technology Customers: Mean Age in Each SegmentMean Age in Each Segment

Overall Mean: 43.5

010

203040

506070

Exp

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Pio

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Skep

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%

1999 2000

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

50%

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60

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1999 2000

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

Overall Mean: 48

US$ 000’s

Research ImplicationsResearch ImplicationsNeed to examine:Need to examine: Temporal stability of TR scores over the long Temporal stability of TR scores over the long

term -- e.g., Are some dimensions more stable term -- e.g., Are some dimensions more stable than others?than others?

Possible variations in TR across countries and Possible variations in TR across countries and cultures, reasons for such variations, and cultures, reasons for such variations, and their implications for multinational their implications for multinational companies.companies.

Individual-specific drivers (e.g., Individual-specific drivers (e.g., psychographics) and consequences (e.g., psychographics) and consequences (e.g., satisfaction) of TR satisfaction) of TR in past year, only 16% checked in past year, only 16% checked their bank their bank

E-commerce in 2000E-commerce in 2000

Findings from the 2000 Findings from the 2000 NTRSNTRS

Concern over the Safety of E-Concern over the Safety of E-Commerce PersistsCommerce Persists

““Do not consider it safe giving out Do not consider it safe giving out

a credit card number over a a credit card number over a computer”computer”

““Do not feel confident doing Do not feel confident doing business with a place that can only business with a place that can only be reached online”be reached online”

““Do not consider it safe to do any Do not consider it safe to do any kind of financial business online”kind of financial business online”

19991999 2000 2000 77%77% 73% 73%

67% 70%67% 70% 58% 59%58% 59%

Despite Concerns, E-Commerce Despite Concerns, E-Commerce Continues to Grow, Especially for Continues to Grow, Especially for Items Costing $10 or MoreItems Costing $10 or More

Purchase Incidence (past year)

11

17

913

29

16

05

101520253035

Items < $10 Items between $10and $100

Items > $100

19992000

%

Explorers are Leading the Pack (almost Explorers are Leading the Pack (almost half make big ticket purchases), Followed half make big ticket purchases), Followed by Pioneers and Skepticsby Pioneers and Skeptics

Incidence of Online Purchase (past year)

0

20

40

60

80

100

Explorers Pioneers Skeptics Paranoids Laggards

Browsed>$100Online Auction%

What are People Buying Online?What are People Buying Online?

MalesMales Books/magazines Books/magazines

(49%)(49%) Computer Computer

Equipment (44%)Equipment (44%) Music (42%)Music (42%)

FemalesFemales Books/Magazines Books/Magazines

(48%)(48%) Clothing (37%)Clothing (37%) Music (29%)Music (29%)

BusinessesBusinesses Computer Software, Computer Computer Software, Computer

Hardware, Books, Office Supplies, Hardware, Books, Office Supplies, Airline TravelAirline Travel

Motivations for Buying OnlineMotivations for Buying Online

70% of purchases are for personal use, 70% of purchases are for personal use, 12% business, 17% gifts12% business, 17% gifts

Reasons for buying online include: Reasons for buying online include: convenience, availability (items not convenience, availability (items not found in a nearby store), better pricesfound in a nearby store), better prices

Major reason for NOT buying online is Major reason for NOT buying online is a concern about safety/securitya concern about safety/security

Purchases tend to be planned Purchases tend to be planned

The Most Important Features of E-The Most Important Features of E-Commerce Sites are those that Protect Commerce Sites are those that Protect and Reassure the Consumer and Reassure the Consumer

0102030405060708090

PrivacyPolicy

ReturnPolicies

Explanationof Shipping

Fees

Warranties ClearAgreements

% E

xtre

mel

y/V

ery

Impo

rtan

t

The More Popular E-Commerce Sites The More Popular E-Commerce Sites Stand Out by Offering Availability, Stand Out by Offering Availability, Selection and Ease of Use; Needs Selection and Ease of Use; Needs Differ by TR-LevelDiffer by TR-Level

What Makes a Site Your Favorite?

0

10

20

30

40

50

Availability Selection Easy toUse

Prices

Low TR*

Medium TR

High TR

* * Note: Small sample size (n=22) for Low TR groupNote: Small sample size (n=22) for Low TR group

%

Other Observations about E-Other Observations about E-CommerceCommerce

Most Preferred Method of Customer Most Preferred Method of Customer Service is Telephone SupportService is Telephone Support

Credit Cards are the Preferred and Most Credit Cards are the Preferred and Most Widely Used Payment Method for Widely Used Payment Method for MerchandiseMerchandise

Services seem to lag behind products; Services seem to lag behind products; e.g., account online & only 5% have e.g., account online & only 5% have signed up for telecom service onlinesigned up for telecom service online

Who is Buying Online?Who is Buying Online?

50% are female50% are female Fastest growth among females and medium-TR Fastest growth among females and medium-TR

consumersconsumers Slightly younger (55% are under 40, versus 45% of Slightly younger (55% are under 40, versus 45% of

U.S.)U.S.) Much more educated (41% have 4 yr. college Much more educated (41% have 4 yr. college

degree versus 24% of U.S.) degree versus 24% of U.S.) Higher income (median income $52K versus $40K Higher income (median income $52K versus $40K

for all U.S.)for all U.S.) Similar marital, family and ethnic backgroundSimilar marital, family and ethnic background

ImplicationsImplications

Managerial ImplicationsManagerial Implications Insecurity and Discomfort are major inhibitors of e-Insecurity and Discomfort are major inhibitors of e-

commerce; consumer beliefs so far remain commerce; consumer beliefs so far remain unchangedunchanged

E-commerce providers can address these concerns E-commerce providers can address these concerns through: secure sites, privacy policies, warranties, through: secure sites, privacy policies, warranties, clear information, telephone supportclear information, telephone support

Less techno-ready consumers seek out sites for their Less techno-ready consumers seek out sites for their availability of unique goods; they are less price availability of unique goods; they are less price conscious than more techno-ready consumersconscious than more techno-ready consumers

It is critical for providers to test their sites for ease of It is critical for providers to test their sites for ease of navigation and usenavigation and use

Watch out for Watch out for Techno-Ready Techno-Ready Marketing: How and Why Your Marketing: How and Why Your Customers Acquire TechnologyCustomers Acquire Technology, A. , A. Parasuraman and Charles Colby, Parasuraman and Charles Colby, Free Press, NY, May 2001Free Press, NY, May 2001

Visit www.rockresearch.com and Visit www.rockresearch.com and select “Technology Readiness”select “Technology Readiness”

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