When the World Trade Organization (WTO) gave e-commerce its blessing by extending the moratorium on Internet taxes, it may have signaled the next big step in online consumer spending.
Until now, online shoppers have — for the most part — been shopping in their own backyards. Americans shop America and Europeans shop Europe. However, now that the industry is becoming more sophisticated and e-tailers are seeking out new pathways to profit, a new world order may be dawning.
According to International Data Corp. (IDC), 9.36 million western Europeans are expected to make Web purchases in the last quarter of this year, up from 4.62 million a year ago. That significant market segment is one that U.S. e-tailers are anxious to tap into, and with a combination of progressive technology and business ingenuity, next year could be the year of international e-commerce.
Amazon.com Crosses Continents
Not surprisingly, online powerhouse Amazon.com may lead the way for consumers to shop without borders. Earlier this week, the company announced an alliance with Sprint PCS that will enable consumers to shop online using Internet-ready Sprint PCS phones. In announcing the innovation, Amazon’s chief executive Jeff Bezos said, “Our Amazon.com Anywhere initiative continues to expand how our customers find, discover and buy anything online, at any time, from anywhere.”
“Anywhere” clearly includes international shopping. In fact, the technology will allow American online shoppers to easily shop at Amazon’s British branch, where they may be surprised to find some items priced lower than at domestic sites.
Foreign Sites Become U.S.-Friendly
Recognizing the immense buying power of American consumers, key European e-tailers are doing everything possible to make shopping easier. For example, Harrods, the venerable British department store much loved by American tourists, named its Web site Harrods.com, forsaking the “co.uk” address.
Additionally, a visit to the site will find most items priced in U.S. dollars as well as pounds.
European Retailers Slow to Adapt
According to Jupiter Communications, only 35 percent of Europe’s top retailers are offering online shopping at this time. Although that condition is likely to change in the near future, it still puts U.S. companies at an advantage in swallowing up sales from European shoppers that are hungry for the online experience.
Jupiter expects Europeans to become 43 percent of the online population by 2003. While user numbers are increasing exponentially, new e-tailers are not. Those consumers will want to shop somewhere, and U.S.-based sites will likely be the obvious choice.
The British Are Coming
According to a report by Ernst and Young, the same things that drive online shopping in the U.S. will appeal to Europeans, including convenience, time savings and avoiding the crowds.
“On the supply side, the leading U.S. e-tailers are now operating in Europe, providing consumers with a much broader range of online shopping choices, and the level of marketing spent promoting e-tailers has also dramatically increased,” the report said.
And what are the Europeans — particularly the British and Germans — buying? CDs, books and videos mostly, just like Americans.