E-COMMERCE GROWTH AND MATURITY IN EUROPE AT A GLANCE
E-commerce is growing at a rapid pace in Europe and this growth is expected to continue for years to come. The various behaviours motivating e-commerce utilisation is resulting in dramatic shifts in required performance for supply chain solutions, when compared to supplying conventional retail markets.
The convenience factor is likely to place greater demands still on options related to short delivery times and home delivery. This further highlights the demand for sustainable solutions to supply chain challenges.
This article offers a glimpse based on official statistics and relevant published surveys. It is based on the Sweco Urban Insight report “Signed, sealed, delivered – Analysing the impact of e-commerce on urban areas”.
E-COMMERCE IS GROWING AT A HIGH RATE
Business-to-consumer (B2C) e-commerce is a relatively new phenomenon and began representing a statistically measurable percentage only a few years ago. On the EU level, two per cent of B2C sales were made online in 2016. The corresponding figure for EU-level retail B2C sales was 5 per cent, with Eurostat citing 12 per cent for Sweden and 8 per cent for the UK.
As measured in turnover, the e-commerce growth rate has been in the range 10–15 per cent per year for several years, according to statistics from Sweden and the UK. It is expected to continue growing. Conventional retail is also expected to grow, but typically at a rate of 1–2 per cent per year.
People become more inclined to spend money online as markets mature. As of this writing, e-commerce has a higher adoption rate in Western and Northern European countries, while Southern and Eastern European countries generally have a lower share of individuals who have made online purchases.
SOME CATEGORIES ARE MORE POPULAR THAN OTHERS
Clothing and sports equipment are the most frequently purchased items online. On the EU level, 30–40 per cent of individuals have purchased clothing and sports equipment online.
The second largest category for online purchases is household goods, with an EU average of over 20 per cent of individuals making these purchases.
Notably, food and groceries are in the same range as computer hardware and electronic equipment, with 10 per cent of individuals buying these goods.
URBAN RESIDENTS SLIGHTLY MORE INCLINED TO SHOP ONLINE
According to Eurostat statistics, individuals in more densely populated areas utilise e-commerce compared to rural areas. However, the difference is fairly small, meaning that e-commerce affects both urban and rural areas.
AGE AND GENDER AFFECT ONLINE SHOPPING BEHAVIOUR
On average, younger people are more frequent e-commerce users than older people.
Different age groups also tend to purchase different items. Clothing is a more popular category among younger shoppers, whereas older shoppers are more inclined to order household goods and groceries online.
There is also a gender difference, as women tend to purchase groceries and clothing online, while men buy more electronic hardware.
CLOTHING PURCHASES ARE OFTEN RETURNED
The percentage of e-commerce returns vary a great deal between product categories. For example, 30–50 per cent of online shoppers have returned clothing and shoes, while home electronics and home furnishings are returned to a lesser extent. This demonstrates that the fitting room is moving from in-store to people’s homes.
DELIVERY PREFERENCE IS LARGELY BASED ON NATIONAL CIRCUMSTANCES
In France and the Nordic countries, collection points are often requested. In most other countries including the UK, however, home deliveries are very common. The small non-food product category, home delivery is the most common delivery method by far. Groceries, large non-food items and takeaway meals are other product categories where home delivery is common.
FEW CUSTOMERS REQUIRE EXTRA FAST DELIVERY
Delivery time preference is yet another factor that varies between European countries, though on average, there is acceptance for a delivery time of 3–5 days. Nordic e-commerce consumers will generally accept longer delivery times, while there is a preference for faster deliveries in the Netherlands.
About one third of online shoppers in the UK, Poland and Italy are willing to pay extra for fast delivery. The UK has moved towards more next-day deliveries, from one-fifth to one third of parcel deliveries between 2013-2016. Faster than next-day delivery still represents a small share.
SUMMARY: WHAT THE STATISTICS TELL US
E-commerce utilisation and delivery preferences differ greatly between European countries. People’s motivations for shopping online also differ, but certain aspects stand out:
- For some, saving time is the most important factor. This group orders a large variety of products online and consider it a convenience worth paying extra for.
- Others view the wider range of available products as the primary benefit, as they are able to find products that are not available locally.
- Price is another important aspect for many users, due to the competitive prices generally offered via e-commerce.
- Some prefer to shop in stores but still use e-commerce for some product categories to avoid travelling to some stores or for the convenience of not needing to carry products home.
- People may use e-commerce for sustainability reasons
This Urban Insight report details how the growth of B2C e-commerce relates, not only to logistics and supply chain issues, but also its effects on city planning.