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.