The number of transactional web sites in Europe will grow from 2,200 in 1997 to over 22,500 by 2002, according to DatamonitorÆs new report, Consumer Online Shopping. The UK market research consultancy says that European retailers are learning from their US counterparts by increasingly exploiting the internet as a distribution channel. Datamonitor says that possessing a transactional web site will soon be regarded as a natural extension of more traditional marketing channels, but it will still be some time before online transactions form a significant part of retail sales. The internet shopping market will continue to be dominated by small sites. By 2002, over 60% of European transactional sites will be small, low-sophistication sites. Datamonitor says this is largely because many small and medium-sized retailers are gradually moving to the internet with a limited investment in a modest site. Datamonitor categorizes web sites as either small, medium or large, depending on the expenditure required to set up the site. Set-up costs range from $10-15,000 for small sites, $34-60,000 for medium sites and up to $700,000 for large sites.Between 1997 and 2002 the number of small transactional sites in Europe will grow from 1,410 to 13,780, Datamonitor says, while the number of medium sites will grow from 320 to 4,770 and the number of large sites will rise from 550 to 3,990. Datamonitor notes that 60% of European transactional sites were externally hosted in 1997 and this is expected to increase to almost 70% by 2002. Over time, larger sites will become far less inclined to enter a cybermall, as they generally fail to see the benefits of a cluster of retailers. For large companies with strong brand names, it is just as easy for customers to access a stand-alone site. Larger retailers are therefore much more likely to become independent from third parties, and use an in-house solution. Medium sites will follow a similar pattern to the large sites, with the impact of cybermall as a solution dramatically decreasing, although they will be more inclined to seek hosting services. New small sites will also increasingly move towards external management, resulting in a significant increase in demand for small and medium-sized hosts.
