European E-Commerce Market Still Untapped

According to a new study by Jupiter Communications, Inc., neither U.S. nor European e-tailers have moved aggressively to establish consumer relationships in the continent’s most sophisticated Web markets.

The research — which was delivered to attendees of the Jupiter Consumer Online Forum Europe held this week in London — featured rankings of the top nations for Web sophistication and Internet marketing potential.

The report found that European nations secured 12 of the top 20 spots for Internet sophistication and 10 of the top 20 spots for future Internet market potential.

Unprecedented Opportunity

“These rankings are a snapshot in time, and at this point, they highlight the unprecedented opportunity that Europe’s markets afford,” said Evan Neufeld, Jupiter’s vice president of International Research. “However, the continued development of Europe’s Internet Economy is far from assured unless Web ventures establish increasingly more meaningful, high-value relationships with European consumers.”

So far, the study found that the key elements of Internet access, e-commerce and content are low-value driven in the European marketplace — with e-tailers focusing only on developing high-volume relationships with consumers. However, the study suggests that this marketing tactic must change to one of customer retention if e-tailers ever hope to cash in on the full potential of European e-commerce.

“The European markets are at a key juncture now where fundamental changes in the way access is provided, content is marketed and goods are sold must occur if the market is to advance,” Neufeld added.

Trouble Spots

In the case of Internet access, free online service providers such as the UK’s Freeserve have increased the sheer number of people online in Europe. Nonetheless, the free services have failed to increase the incremental use of the Internet, according to the report.

Additionally, while content players have attempted to increase their overall audiences by focusing on portals, they have neglected to drive customers to specially-focused sports or lifestyle sites.

According to Jupiter, online merchants have been guilty of only driving traffic to their sites instead of developing strategies to maintain and grow existing online customer loyalty. In fact, another Jupiter survey of the top European e-commerce sites points out that more than 60 percent of sites did not respond to a customer’s inquiry within 48 hours.

About Jupiter Communications

Jupiter Communications (Nasdaq: JPTR) is based in New York City, with operations in London, San Francisco, Stockholm and Sydney.

Jupiter’s research is solely focused upon the Internet economy, providing its clients with comprehensive views of industry trends, forecasts and best practices. The company also stages Internet-related conferences and offers custom research.