Online Sales in Western Europe Are Growing 10 Times Faster Than Retail Market: Forrester
Online sales will grow at an average of 11.9 percent per year over the next five years in Western Europe with 21 percent of non-grocery retail sales being online by 2022, according to a new report from Forrester Research. Although grocery will be one of the fastest-growing online retail categories, just 4.5 percent of grocery sales will occur online in 2022.
That forecast is from Forrester’s updated Western European Online Retail Forecast for 2017 to 2022, which outlines the growth of the online retail market across 17 markets in Western Europe.
Retail growth varies significantly across Western Europe. While consumer confidence in the eurozone is at an eight-year high, retail sales growth and economic activity growth vary considerably across Europe. Retail sales growth is strong in Ireland, the Netherlands, and Portugal but subdued in France, the UK, and Italy.
in the UK, retail sales growth is subdued, Forrester says. The inflation-independent retail growth rate in the UK is one of the lowest in Western Europe. Weekly wages in the UK are growing at 2.2 percent -- lagging inflation, which increased 3.1 percent in December 2017, its highest level in six years. Meanwhile, Brexit uncertainty contributes to subdued economic growth in the UK.
eCommerce impacts profitability, the research found. UK shopping center footfall declined 2.7 percent in the first nine months of 2017. UK clothing retailer Next estimates that store profitability will decline by between 1 percent and 3 percent per year as footfall continues to decline.
Online grocery sales in France and the Netherlands are strong. In the Netherlands, online grocery sales grew to €1 billion in 2017, and 5 percent of supermarket sales are online. Meanwhile, Carrefour, one of the largest supermarket retailers in France, plans to triple its online grocery sales by 2020.
In addition, Forrester’s research revealed that digital and mobile touchpoints are driving offline sales in Europe. The report finds that digital-influenced sales will account for 38 percent of total retail sales in the EU by 2021.
In addition, Forrester predicts that 55 percent of total European retail sales, or €1 trillion, will involve digital touchpoints by 2021. Mobile plays a significant role, as some 59 percent of EU-7 adult mobile phone owners use their phones to research physical products before purchase. As such, retailers must invest in their mobile offerings to capitalize on its increasing influence.
(For more information visit https://www.forrester.com).