European e-commerce worth �114bn: Forrester

Online innovation is continuing to drive European e-commerce revenues, although online consumers are now as likely to use the Web to research and inform offline purchases as they are to buy online. According to a report from Forrester Research, social technologies like user-generated reviews and product ratings have become the most effective influencer over online sales.

Online retail sales in western Europe reached €68bn last year, and are forecast to grow to €114bn by 2014. The analyst’s ‘Online Retail Forecast 2009-2014’ for the region found that 19 per cent of Europeans scrutinise Web-based customer ratings and reviews a minimum of once a month: 46 per cent of them agree that customer such guidance decides whether they purchase a product or service.

Comparison shopping sites are used by 20 per cent of online consumers - although only 5 per cent begin their research there, with search engines the starting point for other online shopping. These activities are leading to continued “wallet shift” from offline to online, says Forrester research director Patti Freeman Evans.

Books (27 per cent), event tickets (18 per cent), and clothing (17 per cent), are the top three product categories purchased online in most of Europe last year, followed by CDs (14 per cent), DVDs (13 per cent), and software (10 per cent). This contrasts with the US, where footwear, computer equipment, and consumer electronics top the purchasing league for online buyers.

The number of online shoppers in Europe will grow from 141m in 2009 to 190m by 2014, Forrester predicts. Average spend per online shopper will rise from €483 to €601 over the same period.

Retailers, meanwhile, are still looking to derive direct sales value from their efforts with blogs, discussion forums, and branded presences on social networking sites like Facebook and Twitter, Forrester avers. Retailers say they will continue to seek the return on investment and added value from social tools that has been elusive so far.

The report also confirms a divide in online retail development between Northern- and Southern Europe. The EU-7 (UK, France, Germany, Italy, Spain, Sweden, and the Netherlands) take 85 per cent of online sales for Western Europe. Southern countries like Italy and Spain are still emerging with fewer online sellers, and consumers are slower at adopting online purchasing

Broadband penetration levels, which vary widely across Northern and Southern European regions, is a defining factor in e-retail uptake, ranging from 86 per cent of Dutch consumers using it, to 45 per cent of users in Spain and 36 per cent in Italy.

“Online tenure and broadband adoption are foundational building blocks that support an online retail economy,” says Forrester’s Freeman Evans.

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