Saturday, January 28, 2012

Building trust in European Ecommerce: what to do?



As everybody knows, there is by far not a single ecommerce market in Europe. There are so many differences between countries that online shopping between EU countries is still not done much.
It is shocking if you know that about 57 % of the EU consumers buy something online, but only 9 % of the people has ever bought something online across his country of living.

The EU also noticed that and wrote a framework to build more trust. The document is called:
A coherent framework for building trust in the Digital Single Market for e-commerce 
and online service

According to the EU commission there are five main obstacles to the digital single market, below I shortly describe them, with my own comments.

1) The supply of legal, cross border online services is still inadequate.

This of course is very true. There are lot's of differences between EU countries on very simple things like the return policy, cookies, profiling and for example the mentioning of the director of a company at the website and all outgoing email (as is mandatory in Germany but does not matter in most other countries).

2) There is not enough information for online service operators or protection for internet users.

In some countries in Europe there is a lot to do about profiling and privacy. (for example Germany) It is important to take away these barriers and as the EU states in it's reports, some Airline companies are difficult to get into contact with via the web (although you ordered via the web). I think especially social media and the so called web 3.0 can help build trust in this field. Social media for contacting companies and combined with the social web (like reviews and ratings) for building trust. Social Media is already revolutionizing business communications. Big or small, private or public, B2B and B2C. Social media will transform them and force them to be more open and transparent and more succesfull.

3) Payment and delivery systems are still inadequate.

Still many people are afraid by using their credit card online. In multiple countries financial institutions started to develop their own payment methods. Like Ideal in the Netherlands or Dankort in Denmark. They build trust locally and are often used. But there is no international connection. Both Ideal and Dankort are only local players. In France the payment method "cheque" is still often used, even in online transactions! In this case you order and after that you sent over a cheque for payment by regular post!  I think there should be a new cross border initiative.






Cross border initiative :European solution to only transfer the payment, after the goods have arrived.

In my opinion, to build even more trust, a pan European payment method should be developed where the payment is only transferred if the goods arrived and arrived in good quality. These kind of payment methods already exists in China where people use alipay for example. It is time to develop something like this in Europe as well. A payment service that holds money in escrow untill the goods have arrived. This would build trust in cross border e-commerce! Of course there are exceptions for example for living goods, but for most of the goods this will be a perfect solution.

4) There are too many cases of abuse and disputes that are often difficult to settle.

So true. If you buy something in another country and it breaks down after a few weeks, what are your rights? What can you do? If you bought your goods from Poland, but you live in Luxembourg, what are your options? I can imagine people hesitate by cross border because of this. A nice and big task for the European homeshopping organisations to work together to make guidelines and to develop Europe wide guidelines and frameworks.
If you look now, even between the European homeshopping certificates (like the thuiswinkel trustmark or the German BVH for example, there are so many differences, that I think, there should at least be a basic certificate that can be applied for by companies and that is valid across Europe. This basic certificate covers the most important aspects like: where to go with complaints, legal aspects, cross border guarantee etc.
Extra guidelines and rules can then be added per country in a 'plus' certificate.

5) Insufficient use is made of high-speed communication networks and high tech solutions.

Also true, there are many differences between internet access and usage in Europe, but also Asia is really leading the high speed internet access. Especially Japan and South Korea.  Europe is getting behind. In Holland telco's removed the unlimited usage of bandwidth at most mobile phone contracts. Not a good sign for e-commerce. What if it is at the end of the month and you exceeded your bandwidth, and you are disconnected for the rest of the month but you are hungry and you want to use the takeaway.com app to order a pizza via your cellphone. Probably you will not do it. Or what if I live in Holland and I bought some goods via the web in Italy. I have some urgent additional questions and I can contact them by skype. But again I exceeded my data limit for the month.

Of course there are more difficulties, like languages, delivery (track and trace and the possibility to select a delivery carrier, different legislation for promotions (etc in Belgium there are government selected sales preiods outside these periods you cannot put articles in "sale") etc. but all of these problems can be solved and there are workarounds if you are creative. To solve these 5 main obstacles is a very good start. I hope the EU speeds up in solving these things.

The full report can be downloaded here.

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