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Monday 6th September 2010

European eTailers Want 'Proven' e-Services

European businesses are wrongly prioritizing IT investment for eCommerce success in favor of devising robust strategies and validating their online presence, according to Datamonitor. After interviewing 193 major retailers, the firm's "The European eTailer Survey", found that 60 per cent do not expect a profit within the first year of their online investment. Rather, 40 per cent of eTailers anticipate a profit within 1 year, 24 per cent within 2 years, 27 per cent, within 5 years, and 9 per cent, not expecting a profit at all.

Merchants investigating eCommerce solution providers, want a proven track record, with 'bricks-and-mortar' firms being particularly risk-averse and cost-sensitive, due to having more to lose than start-ups. In total, 28 per cent of eTailers want benchmark implementations, with cost a priority for 22 per cent, and 13.5 per cent requesting industry expertise. SMEs favor hosted offerings, but service providers have to prove their trust in the high-end marketplace, with the Netherlands and Sweden leading in this respect.

Most online ventures are managed in-house, but cost and operational issues are expected to induce "even large online businesses" to contract with service providers for transparency and management. A key question Datamonitor asks, is, "Can ASPs, ISPs and other service providers provide the adequate levels of support, security, control and application flexibility to win the trust of large players?" Meanwhile, most eBusinesses offer only a limited range of goods, with IT, entertainment and travel, the noted leaders.

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