Allen Valahu
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Lisa Gordon-Miller
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December 12, 2001
Online Ordering Improves for e-Tailers in the U.S. as Europe Struggles to Catch Up

NEW YORK, December 12, 2001 – Online purchasing continues to improve for consumers in the United States and remains far ahead of key European markets, according to Accenture’s third annual holiday eFullfillment survey, which included for the first time this year France, Germany, Spain and the United Kingdom.

In fact, European e-tailers are at roughly the same level of performance as U.S. sites were in 1999. For example, in providing in-stock information, only 32 percent of European e-tailers show this information, ranging from a low of 8 percent in Spain to a high of 58 percent in France. This compares to the 44 percent rate seen in the U.S. for 1999.

In the U.S., e-tailers have improved their ability to guarantee that product is instock when it is ordered. The percentage of sites showing this information almost doubled from last year, moving from 38 percent to 72 percent of the sites. They are making sure that consumers know what is going on every step of the way. For example, e-mail confirmations for orders were received on 81 percent of orders in 2000, rising to 98 percent this year.

Also, the study showed that it takes a bit longer to place orders this year, but not because the Web sites are slow. E-tailers are generally expanding their product lines and it is taking consumers longer to find and navigate to the products they want. Typical ordering time increased to13 minutes this year, compared to only 10 minutes in 2000.

"That’s still a lot faster than most store visits. Online buying still has the edge on convenience. Pure e-tailer’s sites continue to be a bit faster than traditional retailers’ or catalogers’, reflecting apparently better web-savvy designs," said Bob Mann, an associate partner at Accenture.

Orders seem to be arriving at about the same speed as last year, a bit less that seven days, on average. Mann says, "e-tailers are padding their arrival estimates, like they did last year, making promises of 10 to 14 days for goods to arrive. They are generally doing better than that."

Costs for shipping packages are almost exactly the same as last year, averaging an additional 15 percent of product costs. This is despite price increases for many major parcel carriers since last year’s study. However, fewer sites are offering free shipping—only two companies in this year’s study, down from 14 last year.

In Europe, consumer online buying faces some very different challenges than in the U.S. Language and country barriers have a big affect on which companies consumers can shop and how easy it is to place an order and actually receive it. This is despite the efforts that have been underway for many years to create a seamless trading community for the continent.

The reality is there are very few Pan-European sites. Most sites serve only one country, and even large, cross-border eTailers like Amazon and Etam have country-specific web pages that use the consumer’s language, and that handle seemingly simple things like different street address formats. Consumers can run into trouble if they try to "force" a country site to ship across the border, sometimes even crashing the site. With these barriers, it is perhaps not surprising that eTailing has developed more slowly in Europe than in the U.S. and it shows in the study results.

European sites are actually a bit faster for placing orders than was seen in the U.S. this year—averaging 11 minutes to place an order, with France doing best at seven minutes, and Spanish sites being slowest at twice the time to place an order, 14 minutes. Overall, it appears European sites are less complex that their U.S. counterparts and are easier to navigate as a result. The longer time for the Spanish sites is at least partially due to their apparently greater emphasis on security—they often requested passport or bank information before an order would be accepted.

National Postal Services have a much greater influence on online buying in Europe, than in the U.S. Quite often it is the only choice for shipping that consumers get, and it is possible that lower reliability for postal delivery is the reason for fewer delivery promises. On the plus side, shipping charges are much lower for consumers in Europe than they are in the U.S. Overall shipping charges are about 20 percent less in Europe, averaging just over 11 percent of product value. Germany has the lowest rates at less than 8 percent, with Spain more than doubling that at over 16 percent.

"The Internet is a great place to shop, and it is going to get better in Europe very quickly if companies take the U.S. lessons to heart," said Jon Bumstead a UK based Partner at Accenture.

About Accenture
Accenture is the world’s leading management and technology consulting organization. Through its network of businesses approach, in which the company enhances its consulting and outsourcing expertise through alliances, ventures and other capabilities, Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is http://www.accenture.com.

About the Study
The U.S. part of the study attempted to place 530 orders at 85 different Web sites. To conduct the study, Accenture’s Supply Chain practice provided 18 of its professionals with a credit card number, asking them to place orders online. All orders, ranging from books and toys to clothing, were placed over a seven-day period at different times of the day and delivered to Atlanta, Chicago or San Francisco.

The European part of the study attempted to place 392 orders at 81 different web-sites. To conduct the study, Accenture’s Supply Chain group gathered 25 of its professionals with native language skills to do the ordering. Orders were placed over the same, exact time period as for the U.S. part of the study.

Companies were selected for the study by combining last year’s list with information from a variety of industry associations naming the top Internet retailers. Orders were planned for particular sites, products, order placement times of day, and delivery destination. All orders were placed between November 26 and December 2, 2001 on both continents. In total, over 1,700 products were purchased on almost 1,000 orders, in five countries, amounting to over $30,000 of merchandise. Orders are being delivered to Atlanta, Chicago, and San Francisco in the U.S.; and to Barcelona, Frankfurt, London, and Paris in Europe; where they are logged and checked for accuracy. Complete information on the actual receipts will be available later this month. Roughly $20,000 of the merchandise will be donated to children’s charities, while the remaining items will be sent back in order to gauge companies’ performance on returns. Final results for the returns are expected to be available in January 2002.

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