Top 500 retailers take a local approach to European e-commerce

But succeeding there requires a local approach to selling, a retail expert says.

Mark Brohan

Despite tough economic conditions that vary from country to country and ongoing problems with austerity measures and unemployment that continue to impact consumer spending in the United Kingdom, Spain and Greece, Europe is still a top international market for many Top 500 merchants.

But 2012 brought mixed results for several public Top 500 retailers that break out European e-commerce sales. Europe remains a top e-commerce market for Top 500 merchants such as Amazon.com Inc. (No. 1), Gap Inc. (No. 19) and Vistaprint NV (No. 33). In 2012, Amazon’s Germany sales grew 20.7% to $8.73 billion from $7.23 billion in 2011, while its U.K. sales grew year over year 21.2% to $6.47 billion from $5.34 billion. In comparison Gap’s European web-only sales grew year over year 31.6% to $50 million from $38 million while Vistaprint generated web sales of $415.2 million in Europe in fiscal 2012, up 29.1% from $321.7 million in 2011.

But not every Top 500 retailer showed an increase in 2012 European e-commerce sales. European web sales for Coastal Contacts Inc. (No. 123) declined year over year 0.14% (to about $70.4 million from $70.5 million. E-commerce sales for Europe also dropped 8.6% for Crocs Inc. (No. 196) to $30.8 million in 2012 from $33.7 million in 2011.

Being successful in European online retailing means being able to adapt to various national markets, says Forrester principal analyst Martin Gill, who covers European e-commerce and technology. “U.S. retailers are present in Europe, but they face a fundamental challenge that all pan-European businesses face because Europe isn't really ‘Europe’–it’s a loose collection of collaborating countries with different languages, laws, customer behaviors, cultures, payment preferences and currencies,” Gill says. “Gaining a strong foothold in a range of European countries demands localization and there aren't many truly successful pan-European online retailers, whether U.S. based or European.”

To be successful in Europe some retailers are adopting strategies that leverage their established e-commerce technology and deep understanding of online buying behavior gleaned from years of selling online successfully in the U.S. QVC Corp., a part of Liberty Interactive Corp. (No. 5), is counting on mobile commerce and a universal technology platform to grow its sales online in Europe.

Today QVC sells online in Germany, Italy and the U.K. In 2012 Internet Retailer estimates that QVC generated total European e-commerce sales of about $103. 8 million in the fourth quarter ended Jan. 31. That figure is based on e-commerce breakouts, provided by CEO Mike George during an investor’s day presentation, of 17% for Germany, 25% for the U.K. and 9% for Italy. Based on additional breakouts of the percentage of e-commerce sales that come from web-enabled mobile devices of 4% in Germany, 24% in the U.K. and 10% in Italy, Internet Retailer also estimates that European mobile commerce sales for QVC in the fourth quarter totaled about $13.8 million or about 13% of all European web sales. Specific figures for 2011 were unavailable.

For the year, Internet Retailer estimates European web sales totaled about $330.6 million, with mobile accounting for about 13% or $43.0 million. Specific figures for 2011 were unavailable.

QVC is taking several measures to grow its e-commerce business in Europe. In the past several months QVC has moved its European e-commerce platform onto a new IBM platform, says QVC Europe CEO Steve Hofmann. QVC also is looking to increase its awareness with bigger initiatives for mobile commerce and social media and to eventually begin selling online in other European countries such as France, Spain and in Eastern Europe. “We look at e-commerce in Europe on a national level,” Hoffman says.

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More on these and other metrics and analysis is contained in The 2013 Top 500 Guide.

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