Taking the tablets: How Italy learned to stop worrying and love online shopping

Summary:Italians have always been wary of making purchases online, but things could be about to change, thanks to growing adoption of smartphones and slates.

With the holiday season approaching, Italians — just like their fellow Europeans — are ready to shop. Chances are, though, they'll spend much less online than the Germans, French, Brits, and even the Spaniards.

According to recently published research by the School of Management at Milan's Polytechnic University, online shopping in the Boot is on the rise but it's still not as widespread a habit as in other developed markets.

So why have Italians yet to embrace online shopping to the fullest? The reasons include of lack of traditional retailers with an online presence, low broadband penetration and a below-average credit card adoption, all of which make Italians less inclined to buy goods and services on the internet. Some hope, though, comes from mobile and new online payment systems.

Overall, the research says, sales through Italian websites grew by 18 percent in 2013 to reach €11.3bn — which amounts to three percent of the of total retail sales. It's a noticeably smaller percentage than the UK (14 percent) and Germany (eight percent) and lower than France (six percent) and Spain (four percent).

Several factors are contributing to this lag, the first being that, unlike other major markets, traditional retailers are not leading the way when it comes to internet shopping. Among the top 10 online retailers in Italy, just three are also bricks and mortar chains compared to between five and seven in more advanced markets, the Politecnico's research shows.

"For years Italian retailers have opted to invest on new real world shops neglecting ecommerce," Roberto Mangiaracina, who coordinated the research, told ZDNet.

He said that the chains didn't understand this is not just another selling point but a way to integrate different channels, innovate and build new relationships with the customers.

"Think about how some clothing retailers are integrating the in-store experience and the online catalogue, with sales staff helping customers to shop online for those garments that are not on the shelf in the colours and sizes the customers want."

Getting more traditional retailers online will then be crucial in attracting some loyal customers to online shopping. "Well-known brands are already part of users' shopping habits and they could overcome the reluctance towards the online world that still many Italians feel," Mangiaracina said.

Italy's web shopping struggles also have to do with the sorry state of the country's broadband: sub-par penetration and average download speeds have long been an unpleasant trait of the Boot’s digital landscape. Add to this that card payments are not as popular as they are abroad and you have the perfect recipe for limited web commerce takeup. Italians hold just 1.2 cards per person (the EU average is 1.5) and spend €50 per capita per year for non-cash payments versus €230 in France.

It's a trend that has a long story behind it, according to Roberto Liscia, chairman of Netcomm, an e-commerce lobby group. "Italians have always been a cash-loving people. They are used to making small purchases in different little shops close to home, most of which don't take credit cards. Plus, people tend not to trust websites to keep their credit cards data safe."

One way to encourage increased uptake of online payments could be to introduce a third-party system tied to their online banking. That's why Netcomm is pushing for MyBank, a European level e-commerce payment system similar to the popular Dutch solution called Ideal that allows users to make online payments using direct transfers from their bank account.

"This type of operation might be reassuring for some people," Liscia said. "It won't be a substitute for credit cards but will suit some customers' needs."

Still, the biggest hope for electronic shopping in the peninsula comes from the mobile realm. The value of purchases made over smartphones is expected to grow to €510m this year (a 255 percent jump on 2012), while sales over tablets are predicted to reach around €1bn.

The combined worth of shopping on both is forecast to account for 12 percent of Italy's total online shopping this year, (and 20 percent of its annual growth. Italy's smartphone penetration is among the highest in Europe and Italians are growing more accustomed to use the devices for shopping.

"The smartphone is always with you and increases the feeling of control for the user. Plus, apps create a familiar environment where customers feel safer shopping in," Liscia said.

It's mainly thanks to mobile that the number of Italians doing their shopping online grew to 14 million in 2013 from nine million, which gives at last one reason for optimism about the future of Italy's online shopping.

"If mobile commerce were to maintain this pace in 2014 that could really make Italy's ecommerce market mature," Mangiaracina said.

So, in the end, we might have to wait one more year for a merrier Italian e-Christmas.

Further reading

Topics: Tablets, E-Commerce, EU

About

Raffaele Mastrolonardo is a journalist and co-founder of effecinque (www.effecinque.org) news agency. He has been writing about technology for the past 11 years or so for some of the most important Italian news media, both on and offline, including Corriere della Sera, Wired Italia, SKY.it. He's covered the government IT sector for severa... Full Bio

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