Online: UK, Europe & N. America

European Online Growth

E-commerce is the fastest growing segment of the retail market in Europe and North America.

Combined ecommerce sales in Western Europe (UK, Germany, France, Netherlands, Italy and Spain) were £152.20bn in 2015 and should reach £224.42bn in 2019 (growth of +47.5%). By 2020 the combined total should be £249bn.

Online retail sales are expected to reach an average of 10.8% of total retail sales in these six countries in 2019, although the figures are dominated by the UK, Germany and France.  Table 1 shows that these three countries made up 85.6% of Western Europe’s ecommerce in 2018. Britain had the largest online retail sector, whose retail share is expected to grow from 17.8% in 2018 to 19.0% in 2019. 

Table 1
Total Online Retail Sales 2018-2019 (estimate)
Currency values are Sterling (£) billions

 

2018

2019

Share of Sales 2018

Forecast share of retail sales 2019

UK

£69.708

£76.036

17.8%

19.0%

France

£42.141

£46.688

10.1%

10.9%

Germany

£63.207

£68.484

15.1%

15.9%

Spain

£12.220

£14.111

4.8%

5.4%

Italy

£9.191

£10.140

3.4%

3.7%

Netherlands

£7.975

£8.964

9.1%

9.9%

Totals

£204.442

£224.425

10.1%

10.8%

[source: estimates by CRR]

What is, and is not, retail? Note that these estimates relate only to sales of retail merchandise and exclude gambling, fast food, vehicle sales and repair, casual dining, banks and insurance. We use the same definition of ‘retail’ as the ONS, the OECD and the Oxford Dictionary, ie the sale of merchandise to the final consumer. We also exclude the sale of vehicle fuel, which is not readily supplied online.

Online Growth in North America

Online sales in the U.S. have grown from $349.25 bn [£269.46 bn] in 2015 to $529.76 bn [£408.74 bn] in 2018. U.S observers generally assess the U.S. online share of retail as somewhere around 14%, but our estimate is 16.6% for 2018. We have no quarrel with the value of U.S. retail sales but we have recalculated online sales using the UK and European definitions of ‘retail’. The U.S. Census counts cooked food, auto sales/repair, and vehicle fuel as part of retail, which understates the U.S. online share of retail compared the European estimates.

Canada's online sector is starting to develop rapidly, helped by a depreciating Can$. It is forecast to grow by 22.6% in 2017, from US$12.69 bn [£9.79 bn] in 2016 to reach $19.97 bn [£12.57 bn] in 2017.

The Research

The Centre for Retail Research has forecast the trends in online retail sales in Europe and the U.S. for more than ten years. It is based on consumer surveys of 5,500 shoppers in each country plus interviews with retail businesses that account for more than 20% of retail sales. This independent study carried out in 2019 has been carried out by CRR and funded by RetailMeNot as a contribution to discussion on trends within the sector. RetailMeNot is a leading digital savings destination, whose subsidiaries include RetailMeNot.com (U.S.), VoucherCodes.co.uk (UK), Ma Reduc (France) and the French cashback service Poulpeo.

Figure 1
The Increase in Online Shares of Retail Trade 2012-2018Europe and U.S.

[source: CRR Limited]

Figure 2 gives European-only figures for the change in online sales shares between 2017 and 2018.

Figure 2
The Growth of Online Shares 2017-2018

Main Results: Regular and Unceasing Growth (so far)
The 2008 recession induced many shoppers to switch to cheaper retailers, and this often involved buying online rather from traditional stores. The fact that internet search is comparatively easy and predictable has made online retailing attractive for a wide range of products. The widespread use of debit and credit cards in the UK and France (and direct debit systems in Germany and Scandinavia) combined with strong legal protection for buyers has supported the increased use of online retailing.

Recent trends include: 

  • the rapid takeup of mobile ecommerce: in 2019 mobile is expected to account for 47% of UK online sales, 45% of German online sales and 40% online sales in The Netherlands;
  • the growth of the ecommerce arms of traditional bricks-and-mortar retailers in competition with pure-play online retailers;
  • the expansion of ‘click and collect’ as an alternative to home delivery.

 Mobile commerce is discussed further in our webpage Mobile Retailing

Proportion of Population that Shops Online
Even by 2019 only an average of 61.1% of the population of Western Europe is expected to shop online at least once in 12 months. However this figure is skewed by the low figures of some countries. The numbers of eShoppers as a percentage of the population in the UK, Germany, The Netherlands and France all exceed 70.0% and the current rapid growth of ecommerce in Spain and Italy should mean that soon these countries should hit the 70% figure in three or four years’ time.

Table 2
Number of eShoppers as Percentage of Population

 

2018

2019   (e)

UK

72.5%

75.8%

France

63.6%

68.5%

Germany

64.2%

70.2%

Spain

35.7%

42.1%

Italy

36.3%

37.7%

Netherlands

64.9%

72.2%

Averages

56.2%

61.1%

[source: estimates by CRR]


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