Online Retail Making Converts in Europe

Online retail sales in Europe will grow 98 percent annually over the next five years, soaring from 2.9 billion euros in 1999 to 175 billion euros in 2005, according to a report by Forrester Research B.V.

The report, “Retail’s Pan-European Future,” predicts that the Internet’s arrival as a viable sales channel will accelerate the evolution of pan-European retailers that aggressively sell across borders both on- and offline.

“Over the next five years, both Internet pure plays and traditional retailers must develop cross-border strategies that culminate in pan-European sales, or their businesses will be eroded by competitors who do,” said Matthew Nordan, a senior analyst at Forrester. “The resulting industry consolidation will shrink the number of pure plays to a few pan-European leaders, while traditional retailers, leveraging their considerable strengths, will claim more than 75 percent of online sales in Europe by 2003.”

Europe’s online retail growth will be driven by the rush of consumers, retailers, and products onto the Net. Forrester expects European home Internet access via PCs to increase threefold by 2005, while interactive digital TV (iDTV) and wireless application protocol (WAP) phones will provide two new channels for retail transactions. At the same time, traditional retailers will be coming online with full-featured e-commerce sites to recapture sales lost to Internet competitors. With the launch of these retail sites, the biggest retail categories in Europe — groceries, apparel, leisure travel, and autos — will begin to hit stride. In 1999, media, electronics, and leisure travel accounted for more than 80 percent of Europe’s online sales. Their share will drop to less than 40 percent in 2005 as new categories gain volume, Forrester predicts.

By 2005, e-commerce will account for 7 percent of Europe’s retail sales, narrowing the gap with the US, according to Forrester. In Northern Europe, Sweden, Germany, and the UK will close the gap entirely, leading the US in some categories, like travel in Germany and groceries in the UK. While Sweden will lead Europe with 9.3 percent of its retail sales occurring online, Germany’s huge economy will account for 26 percent of Europe’s overall online sales. Although Southern Europe will continue to lag behind the rest of Europe, France will claim 14 percent of Europe’s online sales.

According to an Internet User Profile Survey by NOP Research Group, online shopping in the UK should exceed £10 billion in 2000. The survey found that more than 3 million of the Web’s 12 million regular users in the UK had shopped online in the the four weeks before Christmas of 1999, a threefold increase over the same time period in 1998. NOP estimates that British consumers spent £3.2 billion online in 1999.

The biggest growth category for online sales in the UK is groceries, according to NOP. More than 200,000 people are doing at least some of their everyday shopping through the Web. Online book buying continues to storm ahead, with the number of Web users buying books increasing by more than 50 percent in 1999. Nearly half (49 percent) of all Web users now buy books online; 31 percent buy CDs or music.

“Contrary to some recent speculation, the online shopping experience remains a generally positive one, with shoppers planning significant increases in their spending in 2000,” said Richard Jameson, Internet research director at NOP. “Online grocery shopping is beginning to make its mark and supermarket home delivery vans will become an increasingly common sight.”

Many European consumers remain hesitant to shop online despite the increasing numbers of online buyers, and their satisfaction. According to a Technographics® Europe report from Forrester, 90 percent of Europe’s online shoppers say they will purchase online again in the near future. According to the report, many European consumers are held back by a lack of experience, trust, and need.

Only 4 percent of the households in five countries Forrester surveyed (France, Germany, the Netherlands, Sweden, and the UK) have purchased online in the last three months. These shoppers resemble early online shoppers in the US — well-educated, high-income, urban males who mainly buy CDs, books, and software. These early European shoppers also demonstrate important cultural differences that reflect national patterns in preferred payment and delivery method.

“Although online behavior in Europe varies by country, nationality is not always the strongest predictor of online shopping behavior,” said Reineke Reitsma, analyst for Forrester’s Technographics Europe. “Forrester’s segmentation found that consumers’ attitudes toward the Net, which are largely shaped by experience and trust, are a stronger indicator of when consumers will shop online.”

Related reading

/IMG/581/253581/amazon-logo-com-uk-320x198
hillary-clinton-text-message-signup
pokemon go
Five tips to maximise the content ROI for every industry
<