High speed Internet Use Saves Consumers Nearly $8K Annually?

Perhaps the best enticement for bringing non-internet adopters online has just been found. Saving Money.

According to new data from the Internet Innovation Alliance (IIA), “the average US household earning $62,857 per year before taxes can save $7,707 annually through use of broadband internet” (after factoring the average $490 yearly cost of broadband access).

Here’s how:

Housing

Using online apartment postings, which provide rent alternatives cheaper than going rental rates in major US housing markets, broadband internet access can provide annual savings of $974 per year (7.7% of the average US total of $12,697 spent in rent annually) Site examples: www.padmapper.com, www.apartments.com, www.craigslist.org

Food

IIA created a standard basket of monthly groceries to establish a baseline retail cost, then conducted a series of online searches against the baseline to identify cost savings exclusive to the internet. Potential savings of $965 per year, or 25.7% of the $3,573 the average US household spends annually on food at home, is based on cost reductions at the aggregate basket level. Site examples: www.couponmom.com, www.peapod.com

Travel

Online-only deals can save a consumer who spends the average of $7,658 per year on travel up to 20% of that figure, or $1,532. Source: Amadeus Case Study amadeus.com/us/documents/aco/us/BearingPoint.pdf

Automotive

Online-only deals can save consumers an average of 1.5% on the typical $29,217 net outlay for a new American-made car in 2010, or $438. Source: usatoday.com/money/autos/2010-07-12-carprices12_ST_N.htm

Non-prescription Drugs

IIA created a standard basket of the best-selling non-prescription drugs to establish a baseline retail cost and then conducted a series of online searches against the baseline to identify cost savings exclusive to the internet. They determined the average consumer can save $76 per year, or 24.2% of the average $312.60 spent on non-prescription drugs.

IIA applied the 24.2% savings factor to the average annual expenditure on non-prescription drugs, which was derived as 10% of the average annual expenditure on healthcare ($3,126) from the Department of Labor annual study on consumer expenditures. Site examples: www.drugstore.com, www.amazon.com

Gasoline

Searching online for the lowest gas prices within a 10-mile radius of three zip codes for several major US cities, IIA researchers found a savings of 4.76% off the average gasoline expenditure ($1,986) based on the Department of Labor annual study on consumer expenditures. Site example: www.gasbuddy.com

Apparel

IIA created a set of standard baskets of apparel for a man (khakis/jeans and shirts) and a woman (skirts/jeans and tops) to establish a baseline retail cost in each of five price categories. They then conducted a series of online searches against the baseline to identify cost savings exclusive to the internet, and applied 37.12% savings factor to the average annual expenditure on apparel ($1,725) based on the Department of Labor annual study on consumer expenditures, determining yearly savings of $640 on apparel. Site example: www.overstock.com, www.ideeli.com

Newspapers

Reading free online newspapers can save the average consumer 100% of the typical yearly $193 spent on newspaper delivery subscriptions.

Postage

Online bill payment can save consumers 100% of postage paid to mail bills, which averages $47 per year.

Entertainment

IIA conducted a search-based study on restaurant dining, sporting/concert tickets and leisure activities in several major US cities to determine the average consumer can save $2,747 per year, or 51.7% of total average entertainment expenses.

IIA applied a savings factor of 57.6% on dining outside of the home ($2,619) based on the Department of Labor annual study on consumer expenditures, and applied a savings factor of 46% on entertainment such as concerts, events and leisure activities to the entertainment budget ($2,693) based on the Department of Labor annual study on consumer expenditures. Site Examples: www.groupon.com, www.livingsocial.com, www.bargainseatsonline.com

One area that wasn’t specifically called out in the research? Online coupons.

The use of e-coupons and discounts more than doubled in the first half of 2009 compared to 2008 as the worsening economy has brought frugal into fashion.

If you are not familiar with electronic coupons (e-coupons), they are a great way to save even more on the items you purchase. And chances are high that the very websites you shop on offer them if you only take the time to look.

E-coupons may be “pushed” to you by cellphone, iPod, email, Facebook and Twitter, can be purchased on eBay, or found through online searches for manufacturers rebates/special promotions, or simply by searching on an online store’s name plus the word “coupon” “promotion code” or “discount”.  They may also be automatically uploaded to shoppers’ loyalty cards, or found on screens built into grocery cart handles, and so on.  E-coupons can be printed for use in brick-and-mortar stores or entered as promotion codes in online stores.

It is, however, text messaging and email that are emerging as the most popular ways to obtain coupons in the US, with 8.6 million (8%) of the country’s households currently using one or both of these methods to receive money-saving offers, according to an analysis from Scarborough Research that explores and ranks the ways households obtain coupons.

The savings can be significant. If you have not tried e-coupons, you may quickly find yourself a fan as savings of 5-20% off individual items or whole purchases, and free shipping are common.

Why pay more?

Learn more in these to blog posts: Internet Shopping and e-Coupons; Bargain Hunting Online Safely Online Coupons Gaining Momentum; Especially Among Wealthy

Linda

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