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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Online sales set to grow by 11.9% a year in Western Europe: Forrester

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Online sales are set to grow at an average 11.9% a year in Western Europe, according to new research.

Forrester’s updated Western European Online Retail Forecast for 2017 to 2022 suggests that 21% of non-grocery retail sales will be via the internet by 2022. In 2017, it finds, online sales grew 10 times faster than the retail market in Europe. Grocery sales will grow quickly online, it predicts, but will still account for only 4.5% of retail sales in the sector by 2022.

The research also found that retail growth varies significantly across the 17 markets covered by the research. In the UK, sales growth is subdued, with a retail growth rate that’s currently one of the lowest in Western Europe, at a time of uncertainty around Brexit. The retail industry, meanwhile, is contending with falling footfall – down by 2.7% in the first nine months of 2017 – and with it, declining store profitability. In 2017, UK retail – excluding inflation – stayed flat. That contrasts with growth of 2.9% in Ireland and the Netherlands. At the same, finds the research, weekly wage growth of 2.2% is behind the 3.1% rise in inflation, as of December 2017.

Overall retail sales growth is also subdued in France and Italy but strong in Ireland, the Netherlands and Portugal. Online is bucking those trends in some markets, with strong sales in France, where Carrefour plans to triple its sales by 2020, and 5% of supermarket sales online in the Netherlands, where grocers took €1bn online last year.

Report author Michael O’Grady expects to see continued growth in online sales in selected sectors. "In Germany, beauty and cosmetics sales grew by 14% in 2017, faster than the overall German online retail market," he said. "The UK drives online DIY sales in Western Europe, with 14% of its sales online, which is twice the Western European average."

Forrester predicts digital-influenced sales will account for 38% of total retail sales in the EU by 2021 and that 55% of total European retail sales, or €1 trillion, will involve digital touchpoints by 2021.

Mobile plays a significant role as some 59% adult mobile phone owners in the largest nine European markets use their phones to research physical products before purchase. As such, argues Forrester, retailers must invest in their mobile offerings to capitalise on its increasing influence.

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