European Consumers Getting Comfortable with Online Channel
European consumers have become sophisticated, discriminating and happy to make an independent decision about how to deal with the interactive channel, according to an interactive consumer survey by Datamonitor.European consumers have become sophisticated, discriminating and happy to make an independent decision about how to deal with the interactive channel, according to Datamonitor's third annual interactive consumer survey, IMPACT 2001.
Given the readiness of online consumers, Datamonitor found that business that fail to "cross the chasm" in new markets must not blame consumers, but instead the inability of suppliers to identify and meet needs beyond those of early adopters.
Datamonitor also found that $16.4 billion worth of e-commerce revenue in Europe is generated by just 14 percent of online shoppers -- 50 percent don't even access the Internet. The research firm also divided Europe's consumers into five categories: The Resistors, Agnostics, Phantoms, Moderates and Internet Globetrotters.
The Resistors are the 50 percent of European consumers who don't access the Internet. Nine percent are known as Agnostics -- they have access but do not browse for products online. Phantoms, at 27 percent, make up the largest share. However, although they browse for products online, they make the purchase offline. The Moderates (8 percent) make online purchases but are low-spending. The biggest online spenders are the Internet Globe Trotters (IGTs), yet they make up the smallest share, just 6 percent.
Datamonitor's IMPACT 2001 survey indicates that consumers have decided on a level of use of the "e" channel that they feel comfortable with. There is no evidence that lack of awareness or ability to gain access is a factor in determining consumer type. They will not therefore, progress from one group to another over time or as they become more familiar with the technology, unless there is a compelling reason, such as a new application that widens the appeal of the channel.
This where it is important for retailers to master multiple channels when dealing with customers. A pure-play Internet proposition will only be able to address a small proportion -- at present just 14 percent of the total European population. A truly multichannel proposition may address a much larger group of potential customers, IGTs, Moderates and Phantoms -- 41 percent of the population, three times the number that can be reached through an Internet-only solution.
"The Internet is very poor at delivering the instant gratification that is associated with many buying decisions," said Jon Newman, director of e-commerce at Datamonitor. "Rather than trying to convince more consumers that they should spend more of their money online, it may be preferable to offer true multichannel solutions in the marketplace. Implemented well, (allowing customers to swap seamlessly between online and offline modes at their own discretion), this will provide the dual benefit of addressing a much wider audience who will find the proposition does not require them to change their attitudes before they find it to be attractive."
Datamonitor also expects that a new round of deals can be expected that will align strong Internet and offline businesses. For example, an Internet grocery operation that allows the user to drive by, pick up the shopping and pay for it on collection, may make the vendor's business model more cost effective while offering greater flexibility to the consumer (including the ability to swap unsatisfactory goods immediately and to collect whenever convenient rather than to have to stay at home throughout a defined window of time). Alternatively, an online car retailer could align with a suitable bricks-and-mortar operation so consumers have confidence that they have somewhere to take the car and someone to talk to if, for example, warranty work is required.
"Vendors that wait for consumers to realize what they are missing with their current offerings will discover that, contrary to the popular saying, nothing comes to those who wait," Newman said. "Indications from Datamonitor's IMPACT 2001 research reveal the potential for such hybrid transactions is 10 times that for pure e-commerce, which makes the $16 billion identified in this research, truly the tip of the e-commerce iceberg".
Datamonitor's IMPACT 2001 research is comprised of over 7,500 interviews covering the United States, Britain, France, Germany, Spain, Sweden and Italy. Industry sectors covered include cosmetics and toiletries, food, travel, banking, insurance, investments, automotive and energy.
Reprinted from CyberAtlas.