Lessons European e-tailers can learn from the US

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While the online shopping experience is getting better, the issues that plagued the US last year are plaguing Europe now. New research shows that customers may wait for weeks for a purchase, and risk not seeing it at all.

“It appears that European retailers did not learn from the challenges faced by their American counterparts – the long-term success of a B2C model depends on reliability and efficiency of product fulfilment,” said Robert Mann, an associate partner in Andersen Consulting.

The study shows that Europe lags one year behind the United States in the evolution of online consumer shopping, based on the same study conducted in the US in 1999 which revealed similar results.

The research – conducted in the spring by Andersen Consulting in France, Germany, Italy, Spain, Sweden and the United Kingdom – analyzed the effectiveness of online purchasing in Europe. The participants placed a total of 445 orders with 162 dot-com companies and monitored each company’s ability to capture and fulfil orders, process payments and refunds and handle returns. The United Kingdom had the highest percentage of orders that arrived early or on time (21%), but delivery in Sweden was most efficient, with 71% of goods arriving in seven days or less.

The study targeted a mix of leading e-tailers, upstart e-tailers, retailers with an online presence and catalogue companies with online purchasing capabilities.

European retailers are doing reasonably well in helping potential shoppers. Most sites provided some form of confirmation that the order was on its way. Almost two-thirds confirmed that the order had been placed, and 27% confirmed when the order was shipped. A quarter provided both services. But sites are still not giving consumers enough information about availability. Fewer than 25% said whether the product was in stock, and only half of the sites had a clear process for returning goods.

Uncompleted orders are costing e-tailers valuable business; 39% of the orders placed failed. One third of the failed orders were not completed due to technical or procedural problems. The remaining two thirds were completed online, but the goods were not delivered. In more than half of these cases, the retailer’s delivery was at fault.

Eighty-six per cent of orders were paid by credit card: in Germany and Spain, money orders were a popular option, while Swedish and British companies preferred debit or credit cards. Other payment methods included cash on delivery and purchase orders.

A mere 28% offered an expected delivery date. Of those, less than half delivered the goods early or on time. One in every five orders arrived within five days of the expected date. Where a delivery date had not been provided, 59% of goods were never delivered.

Overall, 57% of successful orders were delivered within seven days of placing the order, but when an order was being delivered between European countries, fewer than four in ten arrived within a week.

Delivery times varied significantly among product types. Three-quarters of the gift products purchased were received within a week, but only slightly more than one-quarter of electronics. In most cases, the electronics product turned out to be out of stock.

The survey highlighted the differences between countries.

• Websites in Germany were most likely to offer delivery dates, but 28% of orders were late or failed to arrive.

• Italy had the most expensive delivery charges and the least reliable service, with just four per cent of products arriving on time.

• 79% of UK web sites offered order confirmation.

• Italian companies were most likely to provide confirmation of shipment.

• Online ordering was most successful in the UK, where 80% of orders were fulfilled.

• France was the only country where retail delivery charges were higher than e-tail.

The survey was taken during a period when sales are relatively quiet, but how well will retailers handle the busy holiday shopping season.

“The success of the business depends on fulfilling demand in a way that creates repeat business,” said Mann.

The research measured order management, order fulfilment and returns. A total of 510 orders were placed at 162 websites, of which 445 survey responses were obtained and reviewed. The sites sold a wide range of products, including clothes, books, CDs, electronics, gifts, healthcare products, sports goods, toys and videos.

Andersen Consulting

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