European e-tailers have yet to provide reliable and efficient delivery and customer service to consumers, according to a study by Andersen Consulting, which finds European e-tailers running about one year behind their American counterparts.
European e-tailers have yet to provide reliable and efficient delivery and customer service to consumers, according to a study by Andersen Consulting, which finds European e-tailers running about one year behind their American counterparts.
“Clearly, the issues that plagued online shopping in the US last year plague Europe this year,” said Robert Mann, an associate in Andersen Consulting’s supply chain practice. “It appears that European retailers did not learn from the challenges faced by their American counterparts — namely that the long-term success of a B2C model depends on reliability and efficiency of product fulfillment.”
The research — conducted by Andersen Consulting in France, Germany, Italy, Spain, Sweden, and the UK in the spring of 2000 — analyzed efficiencies and effectiveness of online purchasing in Europe. The study participants placed a total of 445 orders with 162 dot-com companies and monitored each company’s ability to capture and fulfill orders, process payments and refunds and handle returns. The study targeted a mix of leading e-tailers, upstart e-tailers, retailers with an online presence, and catalog companies with online purchasing capabilities.
According to the study, European retailers are doing reasonably well in helping potential shopper’ complete online purchases. Most sites provided some sort of confirmation that the order was received and on its way. Almost two-thirds provided a confirmation the order had been placed, and 27 percent confirmed when the order was shipped. Less than 25 percent offered information about whether the product was in stock at the time of purchase. Only half the sites had a clear or visible process for handling returned products.
Uncompleted orders are costing Europe’s e-tailers valuable business. Thirty-nine percent of the orders placed failed to be completed transactions. One-third of the failed orders were not completed due to technical or procedural problems. The remaining two-thirds of failed orders were successfully completed online but the purchased goods were not delivered. In more than half of these cases the retailer’s delivery execution was at fault.
Eighty-six percent of the successfully completed orders were paid by credit card. However, payment options and preferences varied from country to country. In Germany and Spain, money orders were a popular payment option, while Swedish and British companies preferred debit or credit cards. Other payment methods offered by companies and used in some countries included cash on delivery and purchase orders.
The study found that one area where e-tailers need to focus is on providing customers with better information about the purchase delivery. Only 28 percent offered an expected delivery date. Of those, less than half delivered the goods early or on time. Twenty percent of orders arrived within five days of the expected delivery date. Where a delivery date had not been provided, 59 percent of goods were never delivered.
Overall, 57 percent of successful orders were delivered within seven days of placing the order. However, when an order was being delivered between European countries, less than four in ten arrived within a week. Delivery times seemed to vary significantly among product types. Three-quarters of the gift products purchased were received within a week, while only slightly more than one-quarter of electronics were delivered within the same time period. In most cases, the electronics product ordered turned out to be out of stock.
Other findings from the Andersen Consulting survey include:
“One thing is evident — like the US last year, European online retailers are making strides in managing the order process, but they still have a long way to go in managing the overall service proposition in terms of fulfillment and returns,” Mann said. “The success of the business depends not only on attracting demand to the site, but on fulfilling this demand in a way that creates repeat business.”
