European e-commerce has seen explosive growth with no signs of stopping. Currently, the UK, France, and Germany dominate the e-commerce market, making up 68.9% of European sales.
In August of last year, it was revealed that Facebook had more than two billion active monthly users. That means that more than 25% of Earth’s population logs into their Facebook account at least once a month. In 2017, there were 3.5 million searches on Google, 156 million sent e-mails, 46.200 posts uploaded on Instagram, 342.000 apps downloaded on Google Play and App Store, and $258,751.90 earned by Amazon – per minute!
That’s the scale of the Internet.
The numbers for online shopping are equally impressive. People all over the world spent online $751.222 every minute of every day in 2017. Revenue in the European e-commerce market amounted to a total of $321,796 million, according to Statista, and it is expected to grow to $471,170 million in 2022, while the number of online shoppers in Europe is expected to amount to 383.9 million by the same year.
Ecommerce News reports that 16% of European companies sell online. Among those companies, almost all of them sell to their own country, while less than half sell to customers located in other EU member states and over a quarter sell to non-EU customers.
The Habits of European Online Shoppers
Internet has become part of everyday life and doing tasks online such as shopping is no longer a novelty. People shop online mostly because of convenience – it’s saving them time and allows them to avoid crowds. It also allows them to easily compare prices, check customer reviews from other online shoppers and find a wide range of products to choose from. In the last year, two thirds of Europeans with Internet access made some kind of online purchase, and countries in Western Europe are still leading the way as the largest market for ecommerce.
According to European Ecommerce Report 2017, the proportion of consumers shopping online is highest in the UK (87%), with Denmark coming to a close second (84%) and followed by Germany (82%). In contrast, the share of people shopping online are the lowest in Romania, Macedonia and Bulgaria.
In 2017, top selling products in European countries were clothing and footwear, according to HiPay, followed by home electronics and books, while the preferred payment methods were debit or credit cards.
Online Shopping is Fashionable
According to a study by the consulting firm Bain & Co., online luxury sales jumped by 24 percent in 2017, and are expected to make up 25 percent of the market by 2025. It is interesting to note that the Millennials provided 30 percent of all spending and, together with Generation Z (born between 1995 and 2010), generated 85 percent of the luxury growth in the last 12 months.
To illustrate, Net-a-Porter, the world’s premier online luxury fashion destination and the world’s largest luxury retailer thanks to the merger with Yoox in 2015, reported sales of 1.5 billion euros for the first nine months of 2017, which is up 19 percent year-over-year. The group also unveiled ambitious plans to double the size of the business by 2020. Net-a-Porter is a company that has always been known for being on the leading edge of online fashion, and their brand signature is their elaborate packaging which proves that the luxury and the utilitarian nature of the Internet don’t have to be mutually exclusive.
Customer in the Centre of Everything
Whether it is about meeting customers’ expectations and anticipating their needs, or about providing new and diverse payment options and covering all the sales channels, trends in e-commerce are extremely customer-centric. While 2017 was all about understanding how best to connect data to understand customers better, 2018 will be the year where customers are put firmly at the center of communications, according to iProspect.
These are the key trends that will continue to have an impact on e-commerce:
Programmatic advertising, customized landing pages, recommended products, loyalty programs and contextual shopping – the aim is to anticipate customers’ needs and provide them with an intuitive shopping experience.
- ARTIFICIAL INTELLIGENCE
Algorithms help customer segmentation and identification of patterns based on the customer’s browsing history. Companies using predictive analytics record sales figures 73% higher than those who have never used it.
According to Google, 85% of online shoppers start a purchase on one device and finish on another. An omnichannel approach to commerce seeks to make transitions from one channel to the next seamlessly, providing the customers with a friction-free experience from search to receipt.
In 2017, 62% of smartphone users made an online purchase using their mobile device and we all know that a mobile device is the one thing that no one leaves home without!
- NEW PAYMENT OPTIONS
Making different payment options available results in more conversions and sales, while new payment options such as mobile wallets add to the speed and simplicity offered to consumers. In-store mobile payment is expected to jump to $503 billion by 2020.
Sources: Sift Science, Trellis, Brandwatch, Outerbox
How is Amazon Making Its Billions with E-commerce?
Currently, Amazon accounts for 34% of the ecommerce field in the US, and it is expected that it will dominate 50% of all United States ecommerce by 2021. Over 1 million new sellers joined Amazon Marketplace in 2017, and more than 360,000 of them are from Europe.
It’s impossible to overlook how Amazon shaped the way people shop online. From 1-Click Shopping, first introduced in 1997, and drone deliveries, first announced in 2013, to the development of processes such as automated emails, user-generated ratings, reviews and recommendations based on previous purchases, Amazon is a true innovator of shopping online and offline.
According to a Sellbrite infographic, 35% of the company’s revenue today stems from purchases made from the “Frequently Bought Together” and “Customers Who Bought This Item Also Bought” features, which means that Amazon focuses on customers and growth instead of profits.
Learn more about our E-commerce solutions.