The European e-Business Report The European e ... - empirica

The European E-Business Report 2005
1.4 Improving Customer Service: Electronic Marketing
and Sales
1.4.1 Adoption of online selling
The continued e-commerce paradox – a boom that is hard to track in statistics
The E-Business Report 2004 pointed at the "e-commerce paradox" (cf. p. 26f.): while a vast majority of
observers agree that e-commerce is booming in special markets such as tourism, retail and IT
services, a paradox appears when it comes to tracking this boom statistically. The percentage of
companies that allow customers to order products and services online appeared to be stagnating. This
observation holds still true for 2005, at least on the aggregate level. There is hardly an increase in the
percentage of firms reporting online sales.
These observations lead to a frequently cited phenomenon. If e-procurement activities have gained
momentum, as an increasing number of enterprises report buying supply goods online, who is the
seller on the other side of the line? In fact, there is no straight forward simple answer, although two
possible explanations are plausible:
• Firstly, it appears that there is only a limited number of companies in many sectors which have
specialised in selling their products online (either through their own website, on B2B
marketplaces or via dedicated proprietary networks), while there are many more companies in
the respective value chains that make use of this offer without selling their own products
online. In other words, online selling could be – to some extent – a one-to-many activity.
• Secondly, some companies make only rudimentary use of e-procurement, for instance for
rather insignificant purchases of office material or other MRO goods 22 , without necessarily
selling anything online themselves. The e-Business Survey 2005 provides new evidence for
this assumption (see chapter 1.3.2, use of ICT systems for e-procurement).
On the other hand, it is uncontested that the internet has had a profound impact on customer service
and sales in several industries. A recent special report and cover story of The Economist about the
impact of the internet on consumer power concluded that the digital marketplace has made the claim
that "the customer is king" come true. 23 While this perspective mainly applies to B2C oriented sectors,
e-Business W@tch sector reports of 2005 indicate that applications supporting customer service are
clearly gaining momentum in B2B oriented sectors as well, for example in the machinery and
equipment and the pharmaceutical industries.
Electronic marketing and sales: key figures in 2004/05
A majority of firms from the 10 sectors studied in 2005 had a website on the internet. Figures are
largely comparable to those presented in 2003. About 60% of small firms, 80% of medium-sized and
90% of large companies are represented on the internet. However, these statistics do not provide a
good picture about the use which a company makes of its website. Figures include on the one hand
the most simple, basic websites which may consist of only one or two pages with company
information, and, on the other, highly developed sites with sophisticated interactive features, including
high level e-commerce functionalities such as secure ordering and online payment systems.
A useful indicator as to whether websites consist of more than just a few pages and whether they are
regularly updated is the use of Content Management Systems (CMS). Currently, about 30% of firms
that have a website say that they use a CMS. Among large firms, the share is about 40%.
22
23
Maintenance, repair and operating goods. Supplies which companies need to maintain their operations, for
example office supplies, in contrast to direct production inputs.
"Crowned at last. A survey of consumer power", in: The Economist, April 2-8 2005. 14-page special report.
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