European online companies are choosing not to cash in on ample Web-based business opportunities, a study shows.
Online research firm, Jupiter Communications, released its study during the recent Jupiter Consumer Online Forum-Europe, held in London.
The study probes Internet “sophistication” - defined by Jupiter as “an understanding of what the Internet is, how to access it and how to use it once logged on”. Jupiter ranked the most sophisticated Internet users by country.
Although European nations fill 12 of the top 20, Jupiter says Europe's Web users’ are failing to make the most of the vibrant e-commerce market. Reasons for this, says Jupiter, include metered telephone billing. Another key reason was time spent online.
"Europeans do have a life outside of the Internet. They're more developed socially, so there is less of a need to be online," Fabiola Arrendondo, managing director of Yahoo Europe, said.
When it comes to Web usage, Europeans are about “18-24 months behind the US”, Arrendondo added.
“Currently, the average amount of time spent online in the US is between 30 hours and 32 hours per month. This is way beyond the average in Europe because telecom companies charge per-minute of phone usage, even for local calls,” said Phil Dwyer, managing director (Europe) of Jupiter Communications.
"Even in Finland, which has the lowest telephone charges in Europe, average usage time is still only about seven hours per month. It's really a question of perception. Consumers don't have a perception of value for money," Dwyer said.
Dwyer believes that the UK, where British Telecom meters local calls, is about two years behind the US when it comes to Web usage. Sweden is about six months behind the US, he said.
The cost for products and services once users are online is also a barrier. “In order for companies to become successful on the Web, they must offer low prices to customers at high volumes,” Jupiter said.
"Low prices are the most compelling reason to buy online," Brent Hoberman, managing director of the European travel e-commerce site LastMinute.com said.
Forum contributors agreed that, while there is a cultural barrier to Europeans feeling comfortable buying online, it is up to companies to change this, by educating users about how to locate low-priced products online. Forum panellists added that firms must soothe Euro-cultural worries about e-commerce, through customer services, marketing and outreach projects.
"The user experience is different in Europe. Whereas retail turns out to be a very therapeutic experience in the US, in Europe it's more about efficiency and getting access," Roger Wood, a corporate vice president for global e-commerce at Reebok, said.
The more time users spend online, the more comfortable they will feel online, and that should translate into spending more money over the Internet, the panellists agreed.
Unfortunately, European companies have not taken advantage of the potential European online markets with aggressive marketing and sales efforts, the Jupiter report said.
An abundance of ISPs (Internet service providers) offering access without subscription charges has sprung up over Europe in the past year, bringing more people online.
For the most part, companies have been unable to compel Europeans to spend increased leisure time and spending power on the Internet, the report concluded.