The rise of e-commerce created the need for 24/7 retailing
The rise of e-commerce to an €80 billion business (January-June 2019 excluding North America) created the need for 24/7 retailing. But GfK is already seeing China and Germany showing early signs of online retail’s share plateauing.
A borderless shopping experience is more than purchasing online, it’s about providing the right retail formats in any given shopping situation. It offers a vital opportunity for all retailers to retain customers within their traditional and online shopping universe, ideally switching seamlessly from one to the other. In the first half of 2019 a quarter of the total value of all technical consumer goods sold globally was delivered through online sales (€80 billion excluding North America).
On a regional level, APAC and China are the key markets for online sales. Historically Chinese e-commerce retailers have enjoyed significant double-digit growth, but in the last twelve months, growth rates have fallen. While the total online market for technical consumer goods in China grew by 8%, the major domestic appliances and consumer electronics sectors experienced their first negative rates in the online channel. Despite the share of e-commerce reaching another high of 36% of the turnover, slowing growth created a plateau effect. Chinese retailers have reacted with partnerships and mergers with traditional retailers. This gives them two advantages: they can grow by reaching the less-developed regions, and they can offer consumers a true omnichannel purchase experience.
In Western Europe, online retailers have also been steadily growing their share of online, from 20 percent in 2016 to 26% turnover share today. Due to such a mature market size of €23 billion, e-commerce is starting to see signs of plateauing shares. For instance, in Germany, the share has been stable at between 22% and 23% over the past four years.
Offering the right assortment is key to delivering a rich shopping experience. GfK’s consumer insights reveal that one-third of customers choose a retailer based on the right assortment availability, this reason is second only to price. Comparing assortments, online retailers have the advantage when it comes to size. GfK Point of Sale data demonstrates that the average assortment of online shops is 2.5 times bigger than that of traditional retailers.
GfK’s Point of Sale data reveals the importance of the seamless shopping experience. When the pure-play e-commerce retailers are compared with those who also offer traditional retail experiences, GfK sees that the new trend is for proposing the right retail format for the situation in order to deliver the best shopping experience. Over the past four years, sales of omnichannel retailers have grown by more than 60%, while pure players grew 25%. There are always more opportunities for retailers to improve their offerings. Connecting all channels through marketing and promotions enables retailers to retain more customers than ever before.
SEE ALSO: How to buy on eBay – tips and tricks