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Page updated:
20 September 2000
E-commerce:
Business Levels of Satisfaction
Extracted from the European IT Observatory 1999 report on E-commerce
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E-commerce:
Business Levels of Satisfaction
Extracted from the European IT Observatory 1999 report on E-commerce.
The years 1996-1999 have seen a massive increase in investment in e-commerce by companies of all sizes. The 1999 European IT Observatory Report includes the results of a detailed survey of 570 organisations in eight industry sectors. One of the key questions in the survey focused on (a) the relative importance of ten benefits of e-commerce and (b) the level of satisfaction in achieving these benefits. The difference between importance rating and satisfaction level indicates a "satisfaction gap" that provides useful input to companies developing their e-commerce strategies, to consultants and other organisations advising on e-commerce, to suppliers looking for gaps in the market and wishing to strengthen their marketing approach, to investors in e-business and to governments and economic development agencies implementing support for e-commerce.
Benefits prioritised:
The ten identified benefits (listed here in perceived level of importance) are:- Quality of customer service
- achieved (for example) by one-to-one communications, elimination of intermediaries, precise targeting of customer services, 24/7 service provision
- Providing new channels to market
- for example, online in parallel with high street or sales force presence
- Flexibility of customer service
- for example, offering multiple communications methods, 24/7 or extended hours support, manning out of hours by time-zone shifting
- Competitive advantage
- perceived as both an opportunity (for first movers) and a threat (if competitors succeed in changing market paradigms)
- New markets and/or new customers
- using online methods to reach customers and markets that cannot be reached through conventional methods
- Reduced operating costs
- through automation and by shifting transactions and other activities towards the customer
- Reduced delivery times
- through supply chain efficiencies, dynamic inventory management, online delivery etc
- Incremental sales revenues
- through add on products and services and by reaching new customers
- Reduced cost of sales
- replacing higher cost (eg physical presence, human labour) with lower cost resources (eg online presence, automated customer-driven facilities)
- Reduced cost of purchasing
- through wider search, increased market transparency, supply chain improvements
The satisfaction gap
This is illustrated in the chart:
Note: Click on chart to see full size.
Some comments:
- The largest proportionate gap was in achieving increased sales revenue.
- The relatively highest match between satisfaction and importance level was in reducing operating costs.
- The second best match was in reducing purchasing costs.
- Overall, the level of satisfaction was remarkably high - from 5.8 to 7.1 on a scale of ten - but leaving ample scope for substantial further improvements.
- In addition to ways of increasing sales revenue, sensitive areas for suppliers, consultants and advisers to aim for include:
- Demonstrating how e-commerce can open new channels to market
- Ditto for new markets and new customers
- Showing practical ways to enhance the quality of customer service and flexibility in delivering customer service.
Further information
The complete survey results are published in the 1999 European IT Observatory, click here for contents and ordering details.The results include a breakdown by industry sector, and commentaries by country, plus estimates of current take up and forecasts of take up.