eCommerce Thriving in Europe Despite Economic Woes, Says Surprise Accenture Study

Executives report increased investment over next 12 months

PARIS, 16 October 2001 – - European businesses are continuing to invest in eCommerce despite the threat of economic recession, an Accenture study reveals today. Sixty percent of senior executives interviewed said they would increase their eCommerce spending by an average of 15 percent over the next 12 months, while 50 percent expect to be pursuing major opportunities in wireless commerce within three years.

Their reasons for doing so, however, have changed significantly from a year ago, says the study, “The Unexpected eEurope”. In the harsh new competitive environment, businesses are seeking the efficiencies that eCommerce can deliver by investing in eCommerce initiatives in their back office and supply chain as well as in sales and marketing. Their primary focus is no longer the acquisition of new customers, but the deepening of customer relationships through the delivery of more tailored services. Sixty-one percent will increase their dependency on service-based revenues and 75 percent will make the delivery of these services more tailored over the next three years.

“It may come as a surprise to many observers that eCommerce is alive and well and thriving in Europe,” commented Rosemary O’Mahony, Accenture’s Managing Partner – Technology for Europe, Middle East, Africa and India, launching the study in Paris today. “In the face of deepening economic gloom, most European businesses are using eCommerce to consolidate their competitive position and prepare for the future. Those who hesitate will be left behind when the economy picks up.”

More than 800 board-level executives were interviewed for the study across 25 countries in Europe, Asia and the United States during the summer of 2001, as the major economies were already slowing down. “The Unexpected eEurope” is the first in-depth survey of executive attitudes to eCommerce in Europe since the onset of the current economic crisis, and Accenture’s fourth annual eEurope study.

It depicts an environment that has changed dramatically from last year. Then, 74 percent of executives said their primary motivation for investing in eCommerce was to keep pace with their competitors. That figure is just 54 percent today. Most businesses are focused now on consolidating their existing opportunities; a process they admit has taken them longer than expected. But eCommerce has become an essential tool in their strategic armoury. Executives across Europe report that it is penetrating more deeply into their organisation, moving beyond sales and marketing into back-office areas of purchasing, logistics and human resources. European companies also expect to double their use of business-to-business exchanges, despite the doubts that are expressed currently about their viability.

More executives than ever before report that their eCommerce initiatives have been a success – an increase from 34 percent last year to 51 percent this year. This success is being enjoyed by larger businesses, long thought to be losing out to their smaller, nimbler rivals. In fact, executives believe strongly that eCommerce favours the large and established. About half think it is increasing the level of market concentration in their industry and two-thirds say eCommerce increases the benefits of being a larger business. Significant economies of scale are being achieved by large organisations in crucial areas such as marketing, branding and software investment, says the study. And a new focus on entrepreneurship and flexibility – long considered the sole preserve of start-ups – is reinvigorating larger organisations.

While understandably concentrating on consolidation and competitiveness today, European executives still plan to deploy new forms of eCommerce in the near future – 49 percent intend using wireless commerce, 24 percent voice commerce and 25 percent television commerce within three years. Significant growth will also come from silent commerce – the use of radio frequency chips to tag, track and monitor objects as they move within an organisation or through its supply chain. In fact, 83 percent of executives expect these new technologies to deliver more opportunities than traditional ‘wired’ eCommerce. Soon it will be more accurate to speak of ubiquitous or uCommerce, predicts the study, as commerce will be able to take place at any time, anywhere.

The gap between Europe and the U.S. in the adoption of eCommerce has narrowed to 12 months, notes the study. Yet European executives continue to betray a lack of confidence in Europe’s ability to take the lead in new forms of eCommerce. While most expect to be leading in wireless commerce in three years time, they see the U.S. leading in all other areas: television, voice and silent commerce, as well as traditional eCommerce. This is in danger of becoming a “self-fulfilling prophecy”, the study warns. To become truly world-class in uCommerce, Europe needs to transform its approach across business and build rapidly on its strength in wireless commerce, it says.

Notes to editors

About Accenture
Accenture is the world’s leading provider of management and technology consulting services and solutions, with more than 75,000 people in 46 countries delivering a wide range of specialised capabilities and solutions to clients across all industries. Accenture operates globally with one common brand and business model designed to enable the company to serve its clients on a consistent basis around the world. Under its strategy, Accenture is building a network of businesses to meet the full range of any organisation’s needs - consulting, technology, outsourcing, alliances and venture capital. Its home page is http://www.accenture.com.

###

Allen Valahu

+33 1 53 23 57 54

allen.valahu@accenture.com