Online Retailing Will Survive Failure of Online Retailers 30/11/00 According to recent research from Jupiter Research, shopping online in Europe is alive and well, despite a number of high profile failures in retailing on the Internet. The results of a recent survey into the attitude and behaviour of Internet users in Europe's seven most mature Internet markets show that more consumers are becoming online shoppers and that existing shoppers are spending more of their income online. The failure of companies such as Boxman, Boo.com, Dressmart, Clickmango and the consumer operations of Urbanfetch have made the industry sceptical about the future of online shopping. However, according to the Jupiter report, troubles in the business to consumer sector have more to do with inevitable market consolidation and the difficulty in securing new funding than with the failure of Internet retailing. The European Online User Survey conducted by Jupiter in conjunction with Ipsos, its sole European survey provider, polled a representative sample of 6,000 regular Internet users across the UK, Germany, France, Sweden, Denmark, Finland, and Norway. The survey identified three categories of Internet users according to the length of time they have been online: Newbies (those who have been using the Internet for 1 year or less) Intermediate users (1 to 2 years) Veterans (more than 2 years) The results show that the longer consumers have been using the Internet the more likely they are to become shoppers. It also indicates that the longer users have been shopping online the more money they spend on the Internet. 11% of newbies stated that they had purchased products and services online, versus 41% of veterans. Meanwhile, 34% of inexperienced shoppers (who had been shopping for less than a year) stated that they had spent less than Euros 100 over the last 12 months, compared to just 13% of experienced shoppers (who had been shopping for more than two years). In contrast, 25% of experienced shoppers reported that they had spent more than Euros 1,000 over the same period, compared to just 12% of inexperienced shoppers. According to Mark Mulligan, a Jupiter analyst, "These figures show that online consumers are initially more comfortable buying inexpensive items but graduate onto higher margin purchases as they become more familiar and confident with using the Internet as a shopping tool. It is essential for retailers to recognise this long-term life span of the online shopper and thus the importance of customer retention." Comparing market maturity and average spend reinforces this trend. For example, in Sweden, where 51% of the population is online, the reported average spend per person is Euros 1,043. In France, where Internet penetration is just 18%, the reported average spend per online shopper is only Euros 520. Today's European Internet audience still largely consists of newbies (24%) and intermediate users (49%), with many people using the Web to window shop and then going out to purchase on the high street. By 2002, over half (51%) the online population will have become veterans, and their likelihood to shop online as well as their spending will increase accordingly.