British Users Will Lead E-Commerce in Europe

Despite consumer pessimism and the U.S. recession, European online retail spending will grow this holiday season to 160 percent of the total for 2000, bringing in €4.1 billion according to Forrester Research B.V.

The month of December alone will account for almost 25 percent of all European online sales for 2001, with U.K. consumers spending €1.4 billion to lead the way. U.K. consumers will account for almost 35 percent of all online spending in Europe, marking year-on-year growth of 116 percent.

“Despite the general reluctance to fly, many European consumers will buy a leisure trip online this December, and travel will total €727 million. Electronics is the next strongest category, and European shoppers will spend €489 million on new PCs and other hardware, and 365 million on consumer electronics like new DVD players,” said Jaap Favier, research director at Forrester.

Favier noted that the number of Europeans online has grown substantially since the 2000 holiday season. There are 24 percent more Germans visiting the Web, 31 percent more Brits and 35 percent more French. While few of this year’s Net newbies will buy online this Christmas — only 12 percent of online users purchase online in their first six months — inhibitions to shopping will drop with experience. One-quarter of those with one to two years’ experience are online shoppers.

This holiday season is a decisive time for Europe’s retailers and their online success. With almost 25 percent of this year’s total online consumer shopping yet to be done in December, Europe’s online retailers face a hectic and critical month, in which they need to get fulfillment right to win return customers. First-time online buyers have high expectations, and on-time delivery is crucial, but most online retailers have only tested their processes with merely half of their December sales volume.

“Also, to make consumers return in the New Year requires more than faultless fulfillment,” Favier said. “Net retailers need to already prepare for follow-up email campaigns in January, offering value-added customer service and relevant offers such as insurance to leisure trip buyers and the latest DVD releases to the purchasers of new players. With such well-targeted campaigns, they will top the average email conversion rate of 15 percent and maintain high turnover till next Christmas.”

As you might expect, online shopping is most popular in Europe’s more advanced Internet markets. According to the First Quarter 2001 Global Internet Trends report from Nielsen//NetRatings, one in six European adults used the Internet to seek pricing or product information for products and services. One in 11 adults actually made an online purchase in the same period. Denmark, Sweden and Switzerland led the region in terms of Web-based browsing and purchasing, while Belgium/Luxembourg, Italy and Spain had relatively few people browsing or purchasing via the Internet.

Half of the Europeans who have browsed for information in the past six months have purchased, with browsing to purchase rates highest in Britain, Norway and Sweden. Italians and Spanish, on the other hand, are more reluctant than other Europeans to buy after having sought product information online. According to Nielsen//NetRatings, only Sweden comes close to the United States, where 74 percent of all Web surfers shop online each month and 30 percent buy online.

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