Europe Taking Part in Holiday E-Commerce

Forrester Research expects European consumers will spend 2.6 billion Euros online during the 2000 holiday season — 30 percent of all 2000 online retail in Europe, but a far cry from the $10 billion in holiday sales expected in the US. The 2.6 billion Euros nearly equals all online retail sales in Europe for the entire year of 1999.

In all European countries, holiday shopping will account for a significant percentage of this year’s total online sales — ranging from 23 percent in Denmark to 39 percent in Greece, Forrester found. German retailers will reap the highest revenues, taking 715 million Euros from online shoppers, which equates to 31 percent of all 2000 online sales. Second will be the UK, where the holiday season will drive 664 million Euros in sales and account for 29 percent of all online sales in 2000. In France, the online shopping season will be worth 292 million Euros, delivering 36 percent of all online sales for the year.

“As the number of online shoppers grows over time — in the first six months of this year alone, the number nearly doubled — retailers have found more justification to migrate their offering to the Net,” said Forrester analyst Abigail Leland. “In addition to enjoying better selection from trusted retailers, Europe’s online consumers simply gain trust as they spend more time online. In Europe’s biggest Net economies, such as the UK, consumers have been online long enough for the effect to hit. In countries like Spain and Italy, the waves of free ISP Internet initiates, who first came online last Christmas, will hit their first-year mark and make their first online purchases this holiday.”

In key categories such as toys, offline holiday sales can account for up to 50 percent of total annual sales. Only in categories like groceries and travel do retailers see proportionately little additional spending during the holidays than in other seasons.

“Europe’s retailers learned a lesson from the fiascoes that US online retailers encountered last year so they included basics like customer service, performance, and products in this year’s plans,” Leland said. “Those that aren’t scrambling to implement these basics at the last minute must now focus on the finishing touches that eliminate barriers to online shopping.”

Recognizing that many of this year’s online shoppers in Europe will be first timers, Forrester has advised retailers to employ three simple elements to reassure Net buyers during their early online purchases: provide them with a simple statement on payment guarantees to reassure inexperienced users that there is little to fear; second, keep a phone number visible at all times to confirm to users that there is a true business behind the fancy interface; and finally, use peers’ advice (such as top 10 lists and user-generated product reviews) to give customers objective reassurance to click the “buy” button.

“Smart retailers will make online shopping a no-brainer by packaging convenience offers — top-selling products complete with wrapping service, delivery coverage, and shipping costs — that send users straight from the home page to the checkout,” Leland said. “And retailers can’t ignore email — the function that is the first port of call for most new Net users. Successful players will use this to their advantage by sending out low-tech, text-only emails that encourage users to ‘pass it on’ — reaching consumers that aren’t particularly Web-savvy yet but who will recognize a good offer when they see it.”

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