Online Trends: UK, Europe & N. America 2021.........The Pandemic Curse

A note to our readers.

Our figures for online retailing in the UK and Western Europe have now been updated (February 2022) to include figures for 2021. The rankings and growth rates have been dramatically altered by the boost in online sales caused by the coronavirus pandemic. Naturally the phrase ‘The Pandemic Curse’ is pure hyperbole.

These are the first estimates on online sales and sales share for a range of European countries and the U.S. produced on a consistent basis. The estimates were made in February 2022, when the impacts of the pandemic upon online sales had become clear.

The figures on this webpage relate to retail sales only, excluding hospitality/restaurants, tickets, vacations and vehicle fuel, and hence may differ from estimates based on a wider definition of ecommerce.  By 'retail sales' we mean the sale of goods to the final consumer. U.S. totals have been adjusted to bring them into line with our definition of retail sales – excluding vehicle fuel, auto sales and prepared food sales (hospitality).

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 reached £347.65bn in 2021 (+128.4% growth).

The most-recent two years (2020-2021) have affected the ecommerce ranking of many countries as shoppers, faced with the pandemic, bought considerably more goods online than they have ever done. 

Figure 1 (below) shows that the U.S. online market share of 20.7% (in 2021) now means that the U.S. has the fourth highest online retail market share, but as recently as 2019  it was second (with 16.5%). Other fast-growing players in 2021, after the UK (where online retailers achieved a market share of 28.9%), were The Netherlands (whose online market share was 23.9% by 2021) and Germany (21.9%). Although French ecommerce in 2021 was much larger than two years before (a 14.6% share compared to 10.9% in 2019), the country has dropped a few places, whilst The Netherlands, Poland and Sweden have advanced rapidly.

The pandemic (2020-22) had several different effects upon bricks and mortar retailers. A proportion of consumers kept away from shops or went shopping less frequently. Many stores were closed for long periods in 2020 and 2021, thus making it impossible to buy many items except online. Curbs on travel and concerns about the possible dangers of using public transport meant that the numbers of shoppers fell considerably in major shopping destinations, which also meant that purchases of ‘department store’ products were increasingly made online. Online sales in the UK, Germany, France, Netherlands, Italy and Spain rose by an average of 31.1% in 2020 and 14.0% in 2021.

Although the online shares of retail spending in each country tended to fall back somewhat from each peak, when lockdowns had ended, the pandemic made many more people familiar with ordering goods online and has changed shopping habits for ever.

In 2019 a country with 15% of its retail business purchased online would have been regarded as one of the leaders in ecommerce. Just two years later a country probably needed 20% of its retail sales done online to be a leader.

Table 1 (below) gives recent ecommerce totals and market shares for major Western European countries.  The results are dominated by the UK, Germany and France.  Table 1 shows that these three made up 78.7% of major Western European ecommerce in 2021. Britain had the largest online retail sector, whose retail share rose from 19.2% in 2019 to 28.9% in 2021. German ecommerce grew from a share in 2019 of 14.2% to 21.9% in 2021, and France's from 9.7% to 14.2% over the same period. Special mention should be made of The Netherlands, whose online market share rose from 15.3% in 2019 to 23.9%. A large proportion of Dutch online retailing and e-shopping involves cross-border sales so the figures may be less accurate than for the other countries. 

Table 1
Total Online Retail Sales 2019-2021 
Currency values are Sterling (£) billions

 

2019

2020 2021

 

Share of Online Sales

2019

Share of Online Sales

2021 

 
UK £75.478 £107.330 £119.640   19.2% 28.9%  
France £41.607 £52.550 £59.697   9.7% 14.6%  
Germany £61.031 £80.561 £94.337   14.2% 21.9%  
Spain £20.353 £24.810 £27.782   7.8% 10.9%  
Italy £16.318 £20.815 £23.792   5.9% 9.2%  
Netherlands  £13.872 £19.361 £22.400   15.3% 23.9%  
Totals £228.660 £305.427 £347.648   12.0% 18.2%  

[source: estimates by CRR]   

 

Online Growth in North America: market share now 20.7% 

Recently, the share of ecommerce in the U.S. retailing has tended to lag behind the growth in ecommerce sales in many prosperous European countries. This is in spite of the fact that the U.S. is the headquarters of many ecommerce supergroups and market places and has the largest ecommerce retail sector of any country. U.S. commentators generally assess the U.S. online share of retail as being somewhere around 14%-16%. However U.S. statistics generally understate the strength of U.S. ecommerce compared to the way European statistics are complied. Our estimate of the online share of U.S. retail in 2021, in a comparable way to European statistics, is in the region of 20.7% (Figure 1).

However 20.7% is an estimate. Full data for the whole of 2021 in the U.S. has not yet been published. We may revisit this estimate around Easter.

Unlike European (and UK) statistical sources, the U.S. Census counts cooked food, auto sales/repair, and vehicle fuel as part of the U.S. retail sector. This significantly understates the U.S. online share when compared to European estimates. Moreover a consequence of the vast size of the U.S. market may be great differences between individual states in the use of ecommerce and therefore differences in regional online market shares. We can see from Figure 1 how much variation there is in online market share of different European nations. Similar variations may also occur in the U.S. Hence the U.S. overall average online market share may be lowered because of the fact that not every state in the U.S. is as prolific in its use of ecommerce as its West Coast and East Coast.

Figure 1

 

Increases in online shares of retail trade 2012 to 2021

[source: CRR]

 

The 'Pandemic Effect' on Online Retailing

Estimating a 'Pandemic Effect' on online retailing is an almost impossible job. The coronavirus pandemic has accelerated the growth of online businesses in every market that we have studied. Most eshoppers are not only spending more in total with online businesses, but they are ordering more frequently.  This is a good time to have a large stake in the carboard box industry! Although the pandemic brought about a rapid increase in online sales, once Lockdowns  ended and shops  reopened online sales tended to fall back somewhat - though not to the 2019 levels of course.

The Centre for Retail Research has used a very blunt mechanism to measure a possible 'Pandemic Effect'. We have done this by calculating the 'excess' growth of online market shares compared to what growth in market share might have been anticipated for 2020 and 2021 under more normal conditions.  We conclude that, because of the pandemic, the online retail market shares in the 11 European countries studied have grown by an average of 3.91% more than would have been expected. The calculation of 'normal annual online growth' has used the average rate of growth per anum in market share for each country since 2012. Our figures for the Pandemic Effect are indicative rather than conclusive. Naturally, some countries have done rather better: the Pandemic Effect on online market shares in the UK, Switzerland and also the U.S. is more than six percentage points. However, these estimates should be regarded as the first stab at measuring an impact rather than a full analysis of what has occured to domestic retailing in each country.       

 

Online Spending on Mobiles: now more than 50% of the total

Online purchasing using smartphones has expanded dramatically in the past six years and now accounts for more than half of all European ecommerce. This is a function both of how significant smartphones have become in our daily lives and the success of retailers in making their websites easy to use and to make payments. In countries like the UK and Germany 80% of product searches are done using smartphones. People may be checking out offers or placing orders, lying in bed at 6 am, travelling on a bus at 8.30am, waiting at a railway station at 6pm or talking over possible acquisitions with their friends at any time of day or night.  Although working from home (WFH) in the pandemic might seem likely to change these habits, to be able to search retailers’ websites and place orders in any room of the house or outside it proved increasingly irresistible, particularly at a time when many non-food stores had been closed by government fiat.  

Mobile commerce is discussed further in our webpage Mobile Retailing

 

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. Over recent years, we have carried out consumer surveys of 5,500 shoppers in each country plus interviews with retail businesses that account for more than 20% of retail sales.

 

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 coronavirus pandemic and its lockdowns has accelerated the rate of growth of online retail, particularly in grocery/food e-commerce;
  • the rapid takeup of mobile ecommerce: by 2020 mobile accounted for more than 50% of UK online sales, 48% of German online sales and 45% of 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.

 

Proportion of Population that Shops Online
Even by 2019 only an average of 61.1% of the population of Western Europe shopped 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 (Updated)

 

2019

2020   (e)

UK

75.8% 76.9%

France

68.5% 72.4%

Germany

70.2% 76.4%

Spain

42.1% 51.2%

Italy

37.7% 49.6%

Netherlands

72.2% 76.1%

Averages

61.1% 67.1%

[source: estimates by CRR]


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