Predicts '99: Euro retailers learn Web lessons

Predicts '99: Euro retailers learn Web lessons

Even though European retail companies may not understand the most advantageous reasons for setting up storefronts on the World Wide Web, they are doing so in increasing numbers, according to a presentation at Dataquest's Predicts '99 conference here on Monday.

Based on a Dataquest study of 250 retailers in four European countries, most retailers are going online in the hope of increasing customers or sales -- while the greater benefit to be realised from an online shop is one of decreased costs, said Petra Gartzen, senior industry analyst at Dataquest in the UK.

"Very few realised one of the main reasons for being on the Web is to reduce the cost of making sales," she said. "The Net in Europe has the potential to become a major retail channel."

Gartzen's study included France, Germany, the Netherlands and the UK. Although France is the country with the lowest Internet penetration among the four, France came out far ahead of the other three European countries as the market leader in terms of how many retailers have online stores.

The French tended to offer bilingual sites, Gartzen said, in spite of their reputation for being hostile to the English language. "The French sites offered order forms in French and English," Gartzen said, while most German retailers offered forms only in German. "There it was, the enemy language [English] on French Web sites," she mused.

Rather than making shopping more mechanical, the Web -- if properly used -- may take consumers back to the days of personalised service from the local shopkeeper who knows all the shop's customers, Gartzen said. Instead of the merchant's knowledge being based on a good memory of a small market, the knowledge will come through automated tools that help retailers track their customers' preferences.

"The Web may help you to really know your customers again," Gartzen said.

In order for more retailers to get on the Net in the four countries, Internet access needs to speed up, more consumers have to get online, more banks should offer e-commerce payment mechanisms and Internet security should be increased, according to survey responses. "Local call charges will continue to restrict the amount of time online" and retail shopping along with it, Gartzen explained.

In another presentation at Predicts, Dataquest principal analyst Ian Keene agreed that security issues are key when he discussed companies' anxieties about getting online. "The number-one concern is security," Keene said.

Speaking on the issue of Internet speed, Keene said that Web-caching devices will become more prevalent, cutting Internet traffic and improving network performance. Caching devices keep a copy of a previously accessed Web page, delivering it to the user the next time the page is requested -- avoiding time-consuming download time. Today, such devices are used primarily in server farms, he said, but their use will increase greatly in the future and should boost Internet acceptance here.

Also, more European retailers will get online once retailing success stories begin to circulate, Gartzen said, explaining that stories about US e-commerce lack relevance for the European market. "We get bored hearing about," Gartzen said.

Europe also needs better portals as a way to present shopping options to consumers, Gartzen said. US portals that offer sites in European markets have only given European customers a subset of what US users can get, she said.

"Microsoft Network (MSN) and Yahoo have done themselves no service by presenting a poor relation [to their US-based portals] in Europe," she said.

Fortunately, European portals, such as the one offered by Deutsche Telekom AG's T-Online, are offering online shoppers a better, local alternative. "T-Online is well on the way with portals for all sorts of interesting subjects," Gartzen said. "This will give the MSNs and Yahoos of Europe a run for their money."http://www.dataquest.com

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