More Australian shoppers are spending smarter and going online to research brands, products and services as a recession looms, according to the findings of News Digital Media’s latest Digital Insight Report, released today.

News Digital Media’s second Insight Report – Anxiety, the Internet and the Hip-pocket – is based on a late September survey of more than 5,000 users of News Digital Media’s news, sport, entertainment, search and shopping sites.

It is also based on focus group discussions and extensive interviews with Australian and international commentators and industry leaders.

The report found that most respondents have increased their expenditure during the last six months and predict that they will continue to do so during the next six.

However, while they are continuing to shop, almost three-quarters are being more careful in how they spend money – and turning to the internet for the information they need to make smart decisions.

Richard Freudenstein, chief executive officer, News Digital Media, said the report revealed how consumers were integrating the internet into their everyday purchasing decisions.

“As the economy slows, researching prior to buying has become so prevalent that almost 75 percent of respondents name shopping research as an important role of the internet in their lives – ahead of socialising, keeping up with the news and organising their finances,” he said.

“The internet has ‘democratised’ shopping. Before they even walk into a store, consumers are better informed and more decisive than ever – they know what brands they like, what products and services they want, how much they should spend and how to bargain.

“Our audience is engaging with brands online, with ads involving interactivity generating strong brand recall. And they appreciate being delivered ads targeted at their interests.

“This shift is making online an even more essential part of the marketing mix for building brands as well as promoting products.”

Forrester Research has found that almost $US400 billion of American store sales are directly influenced by the web, with consumers researching products online before purchasing them offline. This is in addition to the more than $US200 billion of online sales Forrester Research predicts will occur in the US this year.

Mr Freudenstein said the integration of online with offline channels and its influence on purchasing decisions was set to increase as consumers hunted for value.

“Our audience is more resilient and confident than we anticipated in the face of the economic downturn, but they are increasingly dollar sensitive,” he said.

“Rather than cutting spending, they want to make sure that they are making the right decision on anything they buy in times when the perceived cost of making a mistake is much higher. And they do that by undertaking more pre-purchase research online.

“Internationally, advertisers are responding to the economic downturn by increasing the share of marketing budgets dedicated to digital as overall budgets are being cut. Retailers are experiencing a fall in foot-traffic but an increase in internet traffic and are reacting accordingly.”

The News Digital Media Insight Report, produced quarterly, also found that:

• More than 50% have increased their expenditure on cars and groceries online during the past six months. At least 33% are spending more on travel and technology and more than 25% are spending more on financial services, home entertainment, music downloads, entertainment bookings and games/software.
• Approximately 40% of respondents now spend more than an hour each week researching their purchasing decisions – up from less than 30% six months ago.
• Time spent online is continuing to grow with nearly half of all respondents now spending more time online than they did six months ago, with those respondents averaging more than 1.5 hours online each day.