Did Covid-19 really catapult e-commerce forward ten years, as the often heard statement goes these days? The European E-commerce Report paints a more nuanced picture. How did online retail really fare in Europe last year?
Lasting digital shift
According to NYU professor Scott Galloway’s calculations, eight weeks of lockdown would have given online retail more growth than in the past ten years. However, this oft-quoted statement is about the US and about the share of e-commerce compared to physical retail – which, of course, was almost non-existent at the time. In their annual European E-commerce Report, trade associations Eurocommerce and Ecommerce Europe investigate how the sector really is doing.
What strikes the most? European e-commerce grew less in 2020 than in 2019. Turnover growth went from 14% to 10%, despite what Eurocommerce calls an exceptional year of growth in which online retail “played an extraordinary role in society”. However, tickets and travel are still the largest categories online and the absence of tourism and events therefore represented a major loss. Product sales, on the other hand, experienced exceptional growth.
For 2021, the report expects a growth rate of 12%, which shows that a lasting digital shift has indeed taken place. E-commerce accounts for 10 to 15% of total retail sales in the EU, Ecommerce Europe points out. Yet it still influences a much larger part of the consumer journey (up to 50% or more), which nowadays includes a mix of physical and online. The robust growth over the past decade accelerated with the Covid-19 pandemic, with many more consumers going online for the first time: 71% of the population bought online in 2020.
70% of retailers lack webshop
Still, there is room for growth, especially in Southern and Central Europe. In the Netherlands, no less than 91% of people sometimes buy online, in Germany this is 87%. More than a quarter of Dutch consumers buy online at least six times a quarter, yet the absolute frontrunners are the British with no less than 47%. The disadvantage? There is more turnover growth in less mature markets, such as Belgium (7%), than in the Netherlands (3%), for example.
Especially small webshops and national players saw their web traffic increase sharply as a result of the covid measures: the largest webshops with more than 200 million visitors per year received only 9% more visitors, while the online traffic of the smallest players (less than 2 million visitors) increased by almost a third. People also turned more to domestic webshops, possibly out of fear of the closed borders. Still, only 20% of SMEs have an online offer, compared to 43% of large companies. Before the pandemic, 70% of European retailers, especially small shops, had no e-commerce offer.
European web shops show maturity
The report also looked at the services provided by European web shops. It found that almost all European webshops (93%) show their social media channels on their website. Facebook, Instagram and YouTube are generally the most popular, but each category and each region has its own preferences. In Belgium, for example, Facebook (61%), Pinterest (27%) and Twitter (6%) are the most popular social media. Instagram and Youtube are conspicuously lagging behind with only 2% of Belgians as users.
Webshops clearly go for dialogue, because 59% also allow product reviews and almost a quarter even let customers rate the company. Such an extensive use of marketing and communication channels is a sign of maturity, according to the trade associations. For example, almost half of all leading web shops in the EU also have a mobile app. However, the report recommends that delivery options be further expanded: a large majority do not yet offer same-day or next-day delivery.
Above all, however, Ecommerce Europe calls for “channel-neutral” legislation, as regulation in the EU still often makes a distinction between online and offline, whereas today this difference no longer really exists. The e-commerce sector also has the potential to become a major driver of the circular economy as it “constantly opens up new opportunities for more sustainable practices”.
