Study: Lack of Options Thwarts European E-Commerce

European e-commerce is being hampered by a combination of inflexiblepayment schemes, strict governmental mandates, and small-scale businessmodels, according to a study released Wednesday by Forrester Research.

“Cultural differences matter, but payment issues, regulations and domesticmarket size are the dominant reasons why consumers don’t buy online,” saidForrester analyst Jed Kolko.

“The world over, convenience and price top the list of reasons people shoponline,” Kolko said, “but their importance wanes where payments, regulation and scale hold back shopping.”

To overcome these obstacles, the report said retailers must take into account specific local barriers and consumerInternet experience when creating online initiatives.

As part of itsstudy on “What’s Stopping Shopping,” Forrester surveyed 26,700 consumers in13 European countries.

Check Please

Among its chief findings, the study said that Europeans have “wildlydifferent” expectations about payment for goods both online and offline. Asa result, consumers who are already using credit or debit cards toconduct transactions are “much more likely” to shop via the Web, said Forrester.

For instance, while shoppers in France often rely upon checks when buyingproducts, shoppers in Germany, Switzerland and Austria want the option to pay byinvoice. Of those surveyed, only UK consumerssaid that credit cards were among their top three payment preferences.

“To succeed, retailers selling online across Europe must offer a multitudeof payment options,” Forrester advised.

Too Many Laws

Forrester also found that there is a strong correlation between strictretail regulations and decreased online spending.

The research firm cited the “light regulatory hands” of the UK and Sweden as a legal framework conducive to Internet shopping. In contrast, heavy-handed laws regulating pricing promotions and discounts in southern Europe, as well as strict business-hourregulations in German-speaking countries, are “emblematic” of the over-regulation of retail trade, Forrester said.

“While retail is tightly regulated, the decision to shop online depends moreon whether consumers find online or in-person shopping more enjoyable,” saidthe report. “Where regulations are less onerous, low prices stand out as thereason why people shop online.

Domestic Growth

Another stumbling block for the expansion of European e-commerce is the lack of e-tailers that have aggressively moved into localonline markets.

According to Forrester, consumers who have Internet access in largecountries such as Germany, the UK and France are half as likely to makepurchases from online marketers as shoppers in smaller countries. However,the study said e-tailers should view their domestic markets as prime candidatesfor e-commerce initiatives.

“Online retailers need scale, and larger countries have domestic marketssufficient to provide scale without having to face cross-border challenges,”Forrester said.

At the same time, the report said that consumers also stand to benefit from ramped-up penetration efforts. With more products available for purchase online,competition would thrive, bringing lower prices and improved service, the firm said.

2 Comments

  • After reading the rules: it would be nice if the box “Your Name” would be larger than 14 digits and this box allow inserting to correct spelling mistakes or is this the level of your QA policy??

    Concerning the article

    What is the influence of local languages? These split markets in Central and Eastern Europe because general knowledge of English is not common.

  • I’ve long been an advocate of multiple payment acceptance methods. This article just reaffirms the point that you need to allow for multiple payment acceptance faucets, with credit card cards being first. Another payment option to include would be Checks by Phone/Fax/Internet. And don’t forget to include an address for those who would rather mail their payment instead. Other options would include an order phone line and fax line. The thing to remember is the wider your range of payment acceptance methods, the more customers you will attract. This goes for both online and retail establishments.

    – Jim Conley II

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