RealTime IT News

Forrester Puzzles Over "Laggard" Southern Europe

[London, ENGLAND] Emerging technology analyst Forrester Research has turned its attention to southern Europe, comining up with various reasons why the region's retailers are still not selling online.

According to Forrester, retailers in southern Europe "remain paralyzed in the face of unique regional roadblocks," opening up opportunities for "portals, invaders, and grocers" to usurp their place online.

Abigail Leland, an analyst at Forrester Research, says that online retail sales in Portugal, Spain, Italy, and Greece lag their Northern European neighbors for two reasons. Firstly, there are fewer online consumers, while those who are online have less experience. Secondly -- but more importantly in Leland's view -- online retail supply is very meager.

"Southern Europeans simply have fewer places to shop online in their own language, and get exposed to fewer ads, promotions, and media pieces about online retail as a result," said Leland.

Leland points out that a huge number of small, independent retailers claims a very large portion of retail sales in Southern Europe. These firms often do not have the resources to establish a powerful e-commerce presence.

"Few publicly quoted firms means little external pressure to announce e-commerce plans over the past two years, absent venture capital has held back dot-coms, and inadequate fulfillment makes delivery difficult," said Leland.

Filling the gap left by the retailers will be the three groups of companies mentioned above -- portals looking for new revenue streams, invading retailers expanding their online businesses into other regions, and local grocers who will start offering more categories of product.

Forrester expects portals to "prime the market" rather than run away with a lion's share of it forever. They will spread consumer awareness, prompting other invaders to move in. The threat of losing their market share will eventually force local players to join the game, says Forrester.

"Invading retailers will go for Spain and Italy first, prioritizing the countries' large populations," said Leland.

A lack of consolidation among wholesalers will tend to favor incumbent grocers with existing supplier deals while handicapping dot-com entrants, Leland added.

Whatever happens eventually, it appears that southern Europe will remain in e-commerce's slow lane for a long time to come.