In updating the “Top 10 Ways Being Online Saves You Money” report for 2018, IIA looked at important areas of consumer spending and discounts that are available exclusively to internet users. Based on the 2017 Consumer Expenditure Survey by the U.S. Department of Labor, we used online resources and applications to estimate savings on essentials like housing, apparel, gasoline and food. Virtual marketplaces and mobile apps have changed the way that people shop online, providing access to discounts on everything from leisure activities to groceries. Some areas of this analysis, such as housing, gasoline and newspaper expenditures, required local data. For the purposes of this report, we chose five of the top 12 U.S. cities by population (New York, Chicago, Los Angeles, Dallas and Jacksonville), also keeping geographic diversity in mind.
Overall, we found that the potential cost savings in our analysis of the 2017 BLS data was $10,539.09.
This year, we looked at similar products and tapped similar websites for comparison, using public data on November 13-15, 2018. The methodology in some categories has changed from last year to better reflect current internet usage and to more closely align the study with baskets of goods studied by BLS. Savings, therefore, represent possibly higher 2018 costs, while the most recent BLS figures available are for 2017. Measured by percentages, the greatest source of savings in this year’s analysis were in the bill pay and newspaper categories. As in the past, we factored in the average annual cost of a mobile data plan and home internet connection ($1,575.00).
The methodology for each category below provides more detail as to the calculations used for each estimate of savings.
ONE. HOUSING. POTENTIAL SAVINGS: $3,413.18/YR (21.25%)
Source: Search based study on apartments in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Sampled 48 online postings in the above markets to determine average cost savings relative to local apartment rent. Considered the average annual expenditure on shelter ($11,895) plus the annual expenditure on rented dwellings ($4,167) based on the Department of Labor annual study on consumer expenditures. Applied 21.25% savings factor to the remaining average expenditure for apartment living ($16,062.00).
TWO. AUTOMOTIVE. POTENTIAL SAVINGS: $3,383.00 (A ONE-TIME SAVINGS OF 9.43%)
Source: Cost analysis based on average new car purchase price in October 2017
THREE. HEALTHCARE. POTENTIAL SAVINGS: $1,600.00/YR (32.47%)
Source: eHealth prescription drugs savings tool in comparison to healthcare expenditures of BLS study
Methodology: As prescription drugs are an important part of many people’s healthcare, applied $1,600 savings identified by eHealthInsurance.com to the average amount spent on healthcare ($4,928) based on the Department of Labor annual study on consumer expenditures for a savings factor of 32.47%.
Source example: eHealthInsurance savings tool: https://news.ehealthinsurance.com/news/users-of-ehealths-prescription-drug-coverage-comparison-tool-found-median-savings-of-more-than-1-600
FOUR. FOOD. POTENTIAL SAVINGS: $684.55/YR (15.69%)
Source: Search-based study on basket of groceries with categories of food items that tracks with the basket of food used in the BLS study of consumer expenditures
Methodology: Basket of food selected based on basket of goods in the BLS Consumer Expenditures Survey. Conducted a series of online searches against the basket to identify cost savings exclusive to the internet. Potential savings based on cost reductions at the aggregate basket level. Applied 15.69% savings factor to the average annual expenditure on food for use at home ($4,363) based on the Department of Labor annual study on consumer expenditures.
FIVE. NON-PRESCRIPTION DRUGS. $53.00/YR (15.68%)
Source: Search-based study on common over-the-counter medicines (Pain Relievers, Antacids, Cold Remedies, Allergy Relief, Natural Remedies)
Methodology: Created a standard basket of the best-selling non-prescription drugs to establish a baseline retail cost. Conducted a series of online searches against the baseline to identify cost savings exclusive to the internet. Potential savings based on cost reductions at the aggregate basket level. Applied 15.68% savings factor to the average annual expenditure on non-prescription drugs, $338 annually according to a 2017 study by the Consumer Healthcare Products Association.
Source example: www.drugstore.com, www.overstockdrugstore.com
SIX. GASOLINE. POTENTIAL SAVINGS: $157.64/YR (8.01%)
Source: Search-based study on lowest gasoline prices in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Researched average gas prices for each of the above cities, and found the lowest advertised prices in each, for a savings of 8.01% off of average gasoline expenditure ($1,968) based on the Department of Labor annual study on consumer expenditures.
Source example: www.gasbuddy.com, GasBuddy App
SEVEN. ENTERTAINMENT. POTENTIAL SAVINGS: $1,692.79/YR (52.85%)
Source: Search-based study on a wide variety of entertainment and leisure activities in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Applied savings factor of 52.85% on entertainment such as events, outdoor activities, and leisure activities to the average entertainment budget ($3,203) according to the Department of Labor annual study on consumer expenditures.
EIGHT. APPAREL. POTENTIAL SAVINGS: $921.45/YR (50.27%)
Source: Search-based study on basic clothing combinations for men and women
Methodology: Basket of clothes selected for both men and women based on basket of goods in the BLS Consumer Expenditures Survey. Conducted a series of online searches against the basket to identify cost savings exclusive to the internet from a national online-only clothing retailer. Applied 50.27% savings factor to the average annual expenditure on apparel ($1,833) according to the Department of Labor annual study on consumer expenditures.
Source example: www.6pm.com
NINE. NEWSPAPERS. POTENTIAL SAVINGS: $167.33/YR (58.03%)
Source: Search-based study reviewing prices of major newspapers in New York, Chicago, Los Angeles, Dallas and Jacksonville
Methodology: Calculated the standard annual rate for a daily delivery (including Sunday) subscription for three top papers in each of the above cities. Potential savings factor based on average annual daily subscription rates vs. online subscription rates and access to the newspaper’s app (where available).
TEN. BILL PAY. POTENTIAL SAVINGS: $41.16/YR (100%)
Source: Cost analysis based on average consumer’s postage for seven bills per month
Methodology: Created a standard multiple of monthly bills that are traditionally paid via postage (rent/mortgage, gas, electric, water, cable/phone/internet, mobile, credit card). Applied average 2017 cost per U.S. postage stamp ($0.49) for each monthly bill.