Jill E. Posnick
New York
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Lisa Gordon-Miller
New York
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November 03, 2000
European Online Purchasing Opportunities Grow But Face Delivery Problems

eFulfillment Study Reveals European eTailers Didn’t Heed Lessons Learned From U.S. eTailers Last Year

New York, NY, November 3,st 2000 – A European consumer shopping online today will find much to be satisfied with, but he may still wait weeks for delivery and, in some cases, may risk never seeing his purchase at all. These are the key findings of a new Accenture research study of online shopping across Europe, released today. The study suggests that while online purchasing experiences are improving, eTailers still have a way to go in providing consumers reliable and efficient delivery and customer service. The study also reveals that Europe lags one year behind the United States in the evolution of online consumer shopping based on the same study conducted in the U.S. in 1999 which revealed the same or similar results.

"Clearly, the issues that plagued online shopping in the U.S. last year plague Europe this year," said Robert Mann, an associate partner in Accenture’s supply chain practice. "It appears that European retailers did not learn from the challenges faced by their American counterparts -- namely that the long-term success of a B2C model depends on reliability and efficiency of product fulfillment."

The research – conducted by Accenture in France, Germany, Italy, Spain, Sweden and the United Kingdom in the Spring of 2000 – analyzed the efficiencies and effectiveness of online purchasing in Europe. The study participants placed a total of 445 orders with 162 dot-com companies and monitored each company’s ability to capture and fulfill orders, process payments and refunds and handle returns. The study targeted a mix of leading eTailers, upstart eTailers, retailers with an online presence and catalogue companies with online purchasing capabilities.

Order Management and Information Improving

The results show that European retailers are doing reasonably well in helping potential shoppers’ complete online purchases. Most sites provided some form of confirmation that the order was on its way. Almost two- thirds of the websites provided a confirmation that the order had been placed, and twenty-seven percent confirmed when the order was shipped. Approximately one- quarter provided both services. However, sites are still not providing consumers enough information about their order and product availability. Less than one-quarter offered information about whether the product was in stock at the time of purchase. Only half of the sites had a clear or visible process for handling returned products. In general and across all countries, eTailers were best at providing those forms of confirmation.

The study shows that uncompleted orders are costing eTailers valuable business as well. Thirty-nine percent of the orders placed failed to be completed transactions. One-third of the failed orders were not completed due to technical or procedural problems. The remaining two-thirds of failed orders were successfully completed online but the purchased goods were not delivered. In more than half of these cases, the retailer’s delivery execution was at fault.

Eighty-six percent of the successfully completed orders were paid by credit card. However, payment options and preferences varied from country to country. In Germany and Spain, money orders were a popular payment option, while Swedish and British companies preferred debit or credit cards. Other payment methods offered by companies and used in some countries included cash on delivery and purchase orders.

eFulfillment Still Short of Customer Satisfaction

The study shows that one area where eTailers need to focus is in providing customers better information about the purchase delivery. A mere twenty-eight percent 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 delivery date. Where a delivery date had not been provided, 59 percent of goods were never delivered.

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

"If an eTailer wants to succeed both in its home market and across borders, it must have a service proposition that meets the need of the market – and meets those needs in a consistent fashion." said Mann.

Delivery times seemed to vary significantly among product types. Three-quarters of the gift products purchased were received within a week, while only slightly more than one-quarter of electronics were delivered within the same time period. In most cases, the electronics product ordered turned out to be out of stock.

Other Findings

The survey highlighted important differences in performance between countries:

  • Web sites in Germany were most likely to offer delivery dates, but 28 percent of orders were late or failed to arrive. The United Kingdom had the highest percentage of orders that arrived early or on time (21 percent).
  • Delivery charges varied significantly from country to country. Italy also had the most expensive delivery charges, averaging 11.6 Euros, and the least reliable delivery, with just 4 percent of products arriving on time.
  • Delivery services in Sweden were most efficient, with 71 percent of goods arriving in seven days or less.
  • Seventy-nine percent of web sites in the United Kingdom offered order confirmation. Italian companies were most effective in providing confirmation of shipment.
  • Online ordering was most successful in the United Kingdom, with 80 percent of orders being completed successfully.
  • France was the only country where retail delivery charges were higher than eTail.

The survey was taken during a period when retail sales are relatively quiet. However, the results show that online retailers need significant improvements to make online purchasing experience satisfactory and sustainable for consumers. What remains to be seen is how well retailers handle the upcoming busy holiday shopping season.

"One thing is evident – like the U.S. last year, European online retailers are making strides in managing the order process, but they still have a long way to go in managing the overall service proposition in terms of fulfillment and returns," said Mann. "The success of the business depends not only on attracting demand to the site, but on fulfilling this demand in a way that creates repeat business."

Notes for Editors

The research was conducted over a two-month period in the spring of 2000 to measure two stages of online purchasing: order management, and order fulfillment and returns. A total of 510 orders were placed were placed at 162 web sites in France, Germany, Italy, Spain, Sweden and the UK, of which 445 survey responses were obtained and reviewed. The web sites sold a wide range of products, including clothes, books, CDs, electronics, gifts, healthcare products, sports goods, toys and videos. Results by country are available to media upon request.

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