Can we say that we are witnessing the awakening of eCommerce in the retail sector? Let's ask the data.
In the UK alone, "3400 jobs a week were lost in 2020," according to the Centre for Retail Research. "And cross-border online retail in the European Union had a total turnover of 146 billion euros over the year, an increase of 35% compared to the previous year"(E-Show Magazine).
One of the sectors most affected by mobility restrictions has been the retail sector. Profitability has been reduced; losses have increased, massive employee layoffs have increased, among many other things. As a result, the retail sector has experienced more losses than gains over a period of time.
How do we leave uncertainty behind? To what extent do technologies play a role in their recovery?
Facts about online retail in 2020
To summarise the changes, we will take a look at the TOP 500 Cross-Border Retail Europe compiled by the Cross-Border Commerce Europe platform.
The UK is the first in the ranking, with 33 billion (+38%), followed by France, Germany, and Spain.
"Of the 146 billion euros of cross-border online retail revenue in the EU during 2020, Eurozone members accounted for 60% of the total, with £87.25 billion. " The figures suggest that this could continue to grow in the coming years.
Details to highlight in the online retail industry during the pandemic:
- Ikea, H&M and Pandora lead the ranking of European cross-border retailers with the highest internet sales in 2020.
- The home furnishings and furniture sector has achieved a turnover of more than £5 billion.
- Specialised toy stores, such as Ireland's Smyths Toys and Denmark's Lego, are next in the ranking of online retailers with the highest turnover during the pandemic.
- Nespresso and Expert are sixth and seventh, while Cos and Other are the bottom two in the ranking.
The most remarkable aspect of this study is that, for the first time, the top 10 is occupied by omnichannel retailers. A communication model is based on using different channels of interaction with the customer in a centralised way and following the same strategy. The user can see an ad on Facebook or another social network, contact the company via email, and then complete the purchase on their website.
As a result, the customer experience is improved thanks to the ability to be in constant contact with the company through multiple channels simultaneously.
"Omnicanality is not an alternative to multicanality, but rather an evolution of multicanality."
How the online retail sector has changed during COVID-19
This is undoubtedly one of the sectors most affected by the restrictions. The impact of the pandemic on retail sales has been felt strongly, and eCommerce has positioned itself as a real alternative to cushion the decline.
This is one of the main reasons why eCommerce is growing. In fact, spending in online stores has been very favourable since the beginning of the pandemic, an evolution that contrasts with that of face-to-face or physical sales.
It is even said that there has been a radical turn in consumer habits, as consumers have internalised new ways of purchasing goods and services and processing their payments. Do you want proof of this? Take, for example, the number of online purchases made in the last year.
The UK has already become the first country in the world where eCommerce has grown the most, and it is expected to continue to do so throughout 2021. In this context, technological enablers have allowed the retail sector to adapt and accelerate its recovery in the short term:
- Digital transformation has established the digitisation and automation that retail needed and will need in the near future.
- Omnichannel experiences make it possible to maintain and build relationships with customers in a closer and more trusted way.
ECommerce gives the consumer a voice and fosters new ways of interacting in the online world. Moreover, due to the digital transformation that many businesses are undergoing, they are surviving this new stage. However, not all sectors have been affected to the same extent.
The question now is what makes the difference between increasing sales and maintaining profitability, or reducing purchases and closing a business?
Key findings on the evolution of online retailing
We have compiled the key findings on the evolution of online retailing during the pandemic and want to share them with you. Take note!
- More and more retailers offer omnichannel experiences (chat, email, social media, SMS, etc.).
- Technology and digital transformation have become the main ways to adapt to the situation, demands, and consumption habits.
- The vast majority of people afraid of online shopping have considered these initiatives to avoid going to physical stores.
- Social distancing has attracted and boosted online consumers.
- Online sales have multiplied throughout 2020 and will continue to do so in the coming years.
- The UK has the highest online turnover of cross-border retailers in Europe
- Turnover figures in the UK have increased by 38% compared to 2019.
- Estimates for 2022, according to the TOP 500 Cross-Border Retail Europe report, the online retail sector could have a total turnover of 220 billion euros, more than double than in 2020.
How are you experiencing this change? Share your experience with us at PayXpert.