European eCommerce Set To Reach €717 Billion In 2020
The eCommerce market is now predicted to hit a €717 Billion valuation by the end of this year.
However, this means that the percentage at which the market value is growing will have declined again this year, as it has every year since 2017 – not surprising as market penetration reaches more saturated levels. However, the 12.7% growth rate expected for this year is still strong growth in what is a very important market for global brands.
Western Europe is a highly developed region, with the Europe 2020: Ecommerce Region Report from Retail X proving it to be the most developed market in Europe in terms of eCommerce. This location, which includes countries like Spain, France, Italy, and Belgium, accounts for 70% of the entire continents’ eCommerce value. On the flip side, this means that the growth rate in other parts of Europe has been much higher. Romania and Bulgaria both saw increases of 30% last year, making them the fastest growing in the continent. It should be noted that both of these countries have exceptionally low shares of online shoppers (31% and 29% respectively). Spain was another fast growth market, despite being considered a Western European country, with 29%. The lowest growth was recorded in Iceland (3%), with Belgium and Ireland not far behind.
The UK had the highest share of online shoppers of all the countries, with 94% of consumers being considered online shoppers. June was a very positive month for UK eCommerce sales, with a record-breaking 34% increase in year-on-year sales. This despite the fact that many brick and mortar stores re-opened during June, for the first time since COVID lockdowns were put in place.
New Report Shows Changing Consumer Behaviour Online
A new report from Klarna has demonstrated that digital consumers are prioritizing engagement, functionality, and enriched experiences while shopping online.
The report also demonstrates that almost 40% of UK shoppers will abandon a purchase at least once per week.
Of the 2000 UK consumers surveyed, 32% considered the pain of creating an account as a primary reason for abandoning their cart, while 33% highlighted poor website functionality as a reason they might decide against purchasing while on the site. On the other hand, good customer service, simple website functionality, and fun content or experiences were seen as reasons that customers would return to an online shop.
The report lays out a list of priorities for brands that want to keep customers coming back. Inspired by Maslow’s famous ‘Hierarchy of Needs’ theory, the information is demonstrated by a triangle, with functionality at the bottom, providing the foundation, and enriched experiences making up the top layer.
Meanwhile, a separate study has shown the increasing customer interest in sustainability, with 79% of a group of consumers saying they are changing their shopping habits based on sustainability factors.
This is according to Capgemini, in their report “How sustainability is fundamentally changing consumer preferences” . It looks at how Covid-19 has changed views on sustainability in retail, with 67% of respondents saying they will be more cautious about using up natural resources as a result of the global pandemic. Alongside that, 65% claim they will give more thought to what impact their consumption makes on the planet going forward. Health, cleanliness ad safety will also be big factors that consumers take into account when making decisions post-covid, as 62% say they will favour brands that exhibit higher levels of product safety.
Elderly Consumers To Become A Key eCommerce Demographic
According to a new study from Mintel, those aged 65+ are set to become an important demographic for online stores, driving large eCommerce growth for a short-medium term period.
The survey looked at a group of 2,000 internet users from a range of ages, and discovered that 43% of people aged 65 and over have done more online shopping since the pandemic went global back in March.
One of the primary reasons for this is that elderly consumers have been forced to use eCommerce as a means of shopping during Covid-19. The report believes that many of them will continue to shift towards eCommerce as time goes on, after getting accustomed to online shopping during quarantine, despite being traditionally thought of as a group who favour the simplicity of brick and mortar shopping.
Another aspect that makes the elderly a growing eCommerce demographic, is that they are more likely to have discretionary income than younger generations, as the effects of the virus continue to unfold. Those who fall under the generation Z and millennial categories are likely to be hit harder by the economic impact of Covid-19.
Francesco Salau, Mintel research analyst, commented: “A generational divide will arise as a result of Covid-19. Many older consumers have been forced to engage with online retailing, as they’re part of the population especially at risk from the pandemic.
“While Gen Z and Millennial consumers are likely to continue to be the driving forces of the market as the leading online shoppers, they will also be more likely to be cutting back on non-essential spending than older groups. As a result, online retailers, and indeed courier services, are more likely to rely on new business from older consumers in the short to medium-term.”