NPD Group Blog » I Don’t Trust Digital Stuff

I Don’t Trust Digital Stuff

Monday, June 14th, 2010
By Stephen Baker, Vice President, Industry Analysis

That sentiment is not mine, but it is one that comes through loud and clear from NPD’s latest Online Software Purchasing Report. And while it may be a stretch, these findings may also offer us some insight into consumers’ acceptance of owning virtual content going forward. Consumers are clearly used to buying (and renting) things digitally, iTunes is the largest music store in the U.S. according to NPD, and Netflix streaming is undeniably rocketing in popularity as it is incorporated into more and more devices. But strangely it always feels that computer software remains behind the adoption curve. Sometimes it’s bandwidth, sometimes it’s security, sometimes it’s awareness (or just plain interest), and sometimes it’s just comfort; but consumers desire to download real productivity software is clearly behind where they are in getting their other virtual content.

In our 2010 online survey, we saw no change in the share of online software buyers who still wanted a disc even after they had digitally downloaded their chosen application. With the vast majority of online downloading coming from subscription renewals for products like security, there feels like an opportunity is being missed here. Two-thirds of all online software buyers are downloading what they bought (or renewed), but one-in-three online downloaders still want a disc. And with so many folks still looking for that physical product to hold it makes perfect sense that one of consumers biggest choices about where to shop online revolves around the availability of free shipping. Free shipping on bits and bytes!!!

With the upcoming release of Office 2010 offering many consumers an opportunity to download an upgrade to their current Office suite, the ability to buy a key card to unlock what sits virtually inside their PC, we may see a growth in awareness in the ease and accessibility that virtual software purchasing can offer consumers. As more and more applications offer cloud based options (as Office 2010 and Google Docs do) it is vitally important for retailers and publishers alike to message this ease of use and convenience to the mainstream consumer to keep them buying retail. Otherwise we could see the consumer lose interest in the benefits of ownership of software in the face of the no cost alternative, which would be a real tragedy when the alternative of virtual purchasing already exists.

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