BUSINESSWEEK LIFESTYLE
Europe's Not-So-Merry E-Christmas (int'l edition)
Shoppers are slow to buy online
Jo Tucker plans to do all her Christmas shopping online this year--hardly surprising, since she is managing director of Interactive Media in Retail Group, an association in London of European Internet retailers. But Tucker confesses that she'll probably make many of her purchases from U.S. Web sites. 'In Europe, unfortunately, the service is still not there in the majority of cases,' she says with a sigh. U.S. e-retailers have easier-to-use sites and more on sale, Tucker adds. Delivery is quicker, and prices are often lower, even with transatlantic shipping.
Hey, wasn't this supposed to be Europe's first big e-Christmas? An estimated 16% of Western Europeans are now online, up from less than 10% a year ago. Web retailers are sprouting from Dublin to the Danube. The problem is, most Europeans still aren't buying. Dataquest Inc. estimates that European Web sites will ring up $1.9 billion in sales this holiday season, compared with $9.4 billion in North America. The Old World has yet to produce a smash-hit startup such as Amazon.com Inc. Indeed, Amazon has crossed the Atlantic and is now Europe's biggest online bookseller. And while established U.S. retailers such as Gap Inc. and Lands' End Inc. have moved onto the Net, Europe's bricks-and-mortar retailers are only now waking up to the Web's potential.
RELUCTANT. Activity is picking up as the holidays approach. In France, retail chain Pinault-Printemps-Redoute is launching NoelOnline.com, a site offering a wide variety of merchandise and services--such as an e-mail address where children can write to Santa. Swedish menswear site dressmart.com, one of the strongest retailers in Europe, is setting up a tuxedo department catering to millennium celebrations. Smaller European e-retailers have plenty to offer, too, from Venetian glass to French cheese to Irish lace. Many of them also ship to the U.S.
Still, Europeans seem reluctant to give Web shopping a try. In the U.S., 26% of people who are connected to the Internet use it to make purchases. In Europe the figure is 18%. Europeans are less likely than Americans to have credit cards, a prerequisite for most Web purchases. For example, in Germany, less than one-fourth of households have credit cards. And analysts say European cardholders are hesitant to use them. Such caution helps explain why some sites such as Sephora.com, run by France's Sephora cosmetics chain, and Harrods.com, run by the British department store, Harrods, sell only in North America.
That's not all European retailers are doing to discourage consumers. Despite the introduction of the euro and customs-free trade in the European Union, a surprising number of retailers--from Karstadt.com, run by German department store Karstadt, to ELC.co.uk, by British toy merchant Early Learning Center--won't ship across national borders. And now that Web surfers can comparison-shop with a few clicks of the mouse, they are growing impatient with the relatively high prices on European sites. Scottish computer programmer Darren Craig, for example, buys compact disks from a Canadian Web site, absound.com. 'Even including postage, I effectively get two CDs for the price of one, compared with prices in Britain,' he says.
Often, sites promise more than they can deliver. Paris department store Printemps launched an online shopping service, Webcamer.com, featuring roller-skating clerks equipped with minicams. Customers are invited to log on and ask the clerks to find items in the store, display them on camera, and answer questions about them. But would-be customers are often stuck in a long line and the site sometimes shuts down with no explanation. Britain's boo.com, has billed itself as Europe's largest Web apparel retailer but has been forced to delay its launch because of unspecified technical problems. The company still hopes to be up and running for Christmas shopping.
PRICE WAR. There are bright spots in European e-retailing, especially in music and books. Sweden's Boxman.com has built a strong following for CD sales, with a wide selection of titles and sites in eight languages. In February, Germany's Bertelsmann launched its Europewide bookselling site, bol.com, which is expected to post $24.3 million in sales by yearend and is now moving into music. In Britain, it is already second only to Amazon.com, sparking a book price war that is benefiting consumers. There's much less price competition in France, Germany, the Netherlands, Spain, and Portugal--in all of which the government protects small booksellers by setting minimum retail prices for books. But online bookseller Proxis.be in Belgium, where there are no restrictions, is doing a booming business selling books in French and Flemish.
So how should shoppers navigate the confusion? A good place to start is at an Internet portal such as Yahoo.com, which has sites in most European countries listing hundreds of e-retailers grouped by category. To find the best deal, try a service such as Germany's DealPilot.com or Britain's ShopGuide.co.uk, both of which offer price comparisons for dozens of shopping sites. ShopGuide.co.uk also rates online sites, ranking them on the variety of merchandise offered and the ease of navigating and ordering. Bargain-hunters can also try an auction site such as qxl.com, a startup with sites in Britain, France, Germany, Italy and the Netherlands.
The competition is certainly going to get tougher among sites--both European and American--that cater to e-shoppers. For them, the message for now can only be Happy Holidays, and caveat emptor.
By CAROL MATLACK |
