E-commerce is the fastest growing retail market in Europe and North America. Online sales in Western Europe and Poland grew from £174.76 bn [€201.33 bn] in 2015 to £201.90 bn [€232.60 bn] in 2016 (+15.6%). In 2017, we expect total e-commerce online sales to increase to £230.62 bn [€265.68 bn], a rise of 14.2%. Further growth of 13.8% in 2018 should mean that online sales reach £262.46 bn [€302.37 bn].
Retail spending only. These figures relate only to retail spending, defined as sales of merchandise to the final consumer, excluding cooked food, restaurants, automobiles and vehicle fuel.
Countries covered. The survey covered UK, Germany, France, Spain, Italy, Netherlands, Belgium Austria, Switzerland, Sweden and Poland. This year the survey has covered additional European countries so cannot easily be compared with previous studies. The U.S.A and Canada have been included as before.
This independent study for 2017-18 has been funded by RetailMeNot as a contribution to discussion on trends within the sector. RetailMeNot is a leading digital savings destination, providing hundreds of thousands of digital coupons and offers on its websites. There were more than 675 mn visits to its websites in y/e 30 September 2016 and 19.2 mn unique mobile visitors in 2016,Q2. The portfolio of coupon and deal websites includes RetailMeNot.com (U.S.), VoucherCodes.co.uk (UK), Ma Reduc (France) and the French cashback service Poulpeo.
Online Growth in North America
Online sales in the U.S. in 2015 were $349.25 bn [£269.46 bn] and grew by 14.4% to $399.53 bn [£308.26 bn] in 2016. In 2017 U.S. online sales are forecast to reach $459.07 bn [£354.20 bn] (+14.9%) and grow to $529.76 bn [£408.74 bn] in 2018 (+15.4%). Canada’s online sector is now starting to develop rapidly, helped by a depreciating Can$. 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 Centre for Retail Research has forecast the trends in online retail sales for Europe (and the US for more than ten years. The calculation is based on the sales of goods (excluding fuel for vehicles and sales of prepared food in cafes and restaurants). Tickets, holidays, gambling and insurance are also excluded because they are not classed as retailing. ‘Online’ is defined as sales where the final transaction is made over the internet or at a distance, irrespective of whether the internet has been used for browsing and price comparisons. Sales made using mobile phones and tablets are included in our figures.
One thousand shoppers in each country (a representative demographic cross section) have been surveyed for this project and 100 online traders in each country, although 600 consumers and 60 retailers in the smaller countries. We have taken advantage of new data to produce results that are more accurate overall.
Main Results: Regular and Unceasing Growth (so far at least)
The online retail sector is the main driver of growth in European and North American retailing, achieving in Europe growth rates of 18.2% (in 2015), 15.6% (2016), and expected increases in 2017 of 14.2% and 13.8% in 2018. In contrast, the annual growth rates for all types of retailing (from stores and online) have ranged between an average of 1.5% and 3.5% pa.
The recession induced many shoppers to buy 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. Retail focus on the growing use of mobile technology is an additional factor in making online retailing attractive and convenient.
As before, the European online market is dominated by the UK, Germany and France. These three countries are responsible for £152 bn online sales, equivalent to 75.1% of European online sales.
Apart from the UK and Germany, market shares were comparatively low in many European countries. In 2015, the average online share of the European countries surveyed was 7.0%, 8.0% in 2016 and is expected to reach 8.8% in 2017. Figure 1 shows the UK online share was 16.8% in 2016 and is forecast to be 17.8% in 2017 (in 2010 it was around 9.4%). The countries with the highest online shares of their internal markets are: the UK (17.8% forecast for 2017); Germany (15.1% for 2017); and France (10.0% forecast for 2017). Other countries with high market shares are Sweden and The Netherlands. Germany has had the fastest-growing online sector for the last few years, but in 2017 its 16.4% forecast growth will be exceeded by Spain (+19.2%), Poland (17.2%) and Netherlands (17.0%).
In previous surveys the CRR argued that the very rapid growth of the smaller ecommerce countries then occurring compared with the slower growth in the larger ecommerce countries meant that the smaller countries would have caught up in the next four or five years. From the vantage point of 2017, this now looks unlikely as the gap between the larger ecommerce countries and the smaller ones is not diminishing. However there is no doubt that most of the countries surveyed will achieve online market shares of at least 18%, the only question is the timescale and no longer whether it will occur.
US Online Spending 2014-2015
US online spending is forecast to rise from $399.53 bn [£308.26 bn] in 2016 by 14.9% to $459.07 bn [£354.20 bn]. If we use the same definition of retail sales that is used in Europe then the US online share of retail (ie sales of goods) was 12.7% in 2015, 13.9% in 2016, and should be 14.8% in 2017. In comparison, the European online market share was 7.0% in 2015, 8.0% in 2016, and is expected to be 8.8% in 2017. There has been a lot of discussion in the US about when the online share would break through the 10% barrier but this has already been achieved if one eliminates the broader non-retail merchandise from the US definition of the retail industry as is already done in Europe.
The US is still the leader in online retailing compared to Europe. The eleven European countries have a total population of 414 mn compared to the U.S. 316 mn., However 208 mn (66.0% of the population) of the US public were eshoppers compared to 219 mn (52.8%) in Europe in 2016. Every online shopper in Europe spent an average of £921.83 [$1,194.77 or €1,062.02] in 2016 compared to £1,477.71 [$1,915.23 or €1,702.43] in the US.