Europe: DRTV Support Services for a Single Market?

By Stuart Anderson

The current European home shopping market is worth over £67 billion, according to a 2005 report by Mintel. Northern Europe has seen the biggest growth despite the decline in Germany, as well as the European market in general.

There are, however, some things to consider before venturing into this area. Sourcing support services in the European market is somewhat of a challenge for many global DRTV companies. The question is whether there is truly a "global European" solution to our market here. The potential is huge but are there fulfillment houses and call centers that offer a complete integrated European solution? Being realistic, the answer is no.

A CLOSER LOOK
Let's examine some of the reasons why. Firstly, how call centers communicate with customers is crucial. Within Europe, you'll find about 40 major languages (which incidentally are defined by the European Union as a dialect with an army and a navy) Of course, Europeans are generally talented linguists but how practical and effective is it to staff a global call center with all these language possibilities? The answer is that it is totally impractical.

Secondly, there are the cultural differences--a major factor. How well can German agents speaking French sell to your eager French callers? Talking is one thing, but selling effectively in a different cross-cultural language is a different matter altogether. And if you can't sell effectively, then you can't maximize your call opportunity or your media purchases.

Thirdly are local habits. In some countries, you'll get over 90 percent of your customers paying by credit card and 10 percent in another.
Lastly is legislation. This is a massive issue and a bit of a minefield. For example, you will not be able to have consistent scripting between countries. In some you'll be able to upsell, in some you won't; while in some you'll have to give guarantees and refunds and others not. The list is almost endless.

Warehousing and logistics is the next issue. There is no courier in Europe that can store and ship to all markets cost-effectively from a single location. Logistics companies will set up individual distribution hubs, which is the best you can hope for in this case. Added to this you have the problem of cash on delivery (COD), which accounts for 90 percent of sales in some countries. You also must consider product returns (a free right for many), which can sometimes cost more than the original product purchase.

Europe is certainly not a "nation." Global players need to seriously consider this when entering the European market. Success can only come from selecting strategic partners, with specialized knowledge and global resources, or by treating each country as a separate market.

Having said all of this, the European market has massive potential. In southern Europe, home shopping hardly exists at all. As more countries join the EU--and historically "poorer" countries become more "westernized"--the home shopping market will grow by default.

Stuart Anderson is managing director of ama Home Shopping, a leading full service direct marketing agency based in Ireland. He can be reached at 44028 9128 1281.