European Cross-Channel Retail Sales Forecast, 2015 To 2020: Measuring The Influence Of Your Digital Assets Offline

Europe's eBusiness professionals are increasingly focused on their digital presence, and with good reason. Digital touchpoints are feeding into almost every stage of the customer life-cycle. For many retailers over half of all online traffic comes from mobile devices, like smartphones - yet, smartphone conversion rates are considerably lower. Initially this may appear as a cause for concern. But Forrester’s updated European Cross-Channel Retail Sales Forecast sheds a different light on this phenomenon by quantifying the influence of digital touchpoints, including mobile, on overall sales, both online and offline.

eBusiness leaders must consider their digital assets as part of the whole customer-lifecycle, rather than simply channel by channel. Digital touchpoints have a significant influence beyond online sales. In fact, by 2020, Forrester forecasts that digital will influence 53% of total retail sales in EU-7, or €947 billion, including a combination of online sales and offline sales influenced by online research.

Key takeaways from the updated cross-channel retail sales forecast published today include:

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Online Retailers Go In Pursuit Of Europe's Valuable Cross-Border Consumers Worth €40 Billion By 2018

A few weeks ago I was in Barcelona for the Global eCommerce Summit (GeS). One of the hot topics on the agenda, and during the coffee breaks, was internationalization. How best to evaluate and prioritize new market entry? How far do you need to go with localizing your website and the customer experience? How do you manage different market regulations and nuances?

The focus of these questions at GeS this year was the US and China. Yet, these questions also apply when considering market expansion in Europe. Forrester’s new Western European Online Cross-Border Retail Sales Forecast 2013 To 2018 shows the opportunity for eBusiness professionals, pursuing European expansion through cross-border sales, is growing. In fact, European online cross-border sales will reach €40 billion by 2018, growing at a compound annual growth rate (CAGR) of 11% over the five year forecast period.

Key takeaways from the forecast include:

  • The majority of online cross-border revenues will stay within Europe. European online consumers who buy outside their home market are more likely to do so from another European market rather than those outside Europe.
  • More retailers look for growth across borders, broadening the competitive landscape. The number of EU retailers who sell online across borders will grow by a CAGR of 12%, with 28% of European online retailers selling across borders by 2018. eBusiness pros at retailers of different sizes and categories are actively pursuing valuable cross-border shoppers and international sales to drive growth.
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The Devil is in the Detail for Online Apparel Retailers

Reviewing online functionality for a selection of key European online only retailers, I am struck by a shift. With the basics of purchasing and navigation nailed down, the devil is now in the detail of implementing online functionality for apparel retailers – particularly those that are online only. Now we are seeing both subtle and overt efforts to improve merchandising and remote clienteling online proactive live chat, 2D size guides, personal shopping style guides and ‘compete the outfit’ suggestions on product pages.

To get to the next level of best practice and differentiation online apparel retailers need to keep refining their website functionality in order to succeed in a competitive and increasingly crowded category. Empowered customers are using multiple devices to shop online helping to drive forecasted online retail sales growth of 12% in Europe (2013 to 2018). To secure their chunk of this growth, online apparel retailers need to constantly evaluate, test and implement new and improved functionality to support merchandising and drive consumers through the path to purchase.

To assess whether European online-only apparel retailers have the features and functionality to compete, Forrester conducted a Website Functionality Benchmark to evaluate selected sites: Asos.com, LaRedoute.fr, Netaporter.com, Very.co.uk, Wehkamp.nl, and Zalando.de.

Key takeaways from the report include:

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Black Friday Plagues the 2014 UK Holiday Sales Season

Black Friday has been a constant feature in the postmortem of the 2014 UK holiday sales season. It has gradually extended its influence across the Atlantic over the years; despite having no cultural significance outside of the US (Black Friday is a sales day that traditionally follows the US Thanksgiving holiday). Retailers in France, Germany and Spain tested the waters with Black Friday promotions in 2014. But it was in the UK where Black Friday sales surged to new heights.

UK retailers who embraced Black Friday reported massive sales uplift on the day. Department store House of Fraser recorded a 125% increase in year on year sales while Very.co.uk saw orders jump 134% compared to Black Friday 2013.Yet, for most, this uplift did not translate to an overall sales increase or the holiday season.

Our new report "Black Friday: The Sales That Stole Christmas", written with my colleague Martin Gill, evaluates the impact of Black Friday sales in the UK holiday season 2014, foretelling what is on the horizon for the rest of Europe as:

Black Friday Has Changes The Cadence Of Holiday Sales. Black Friday has arrived in the UK with a bang, but for most eBusiness executives it hasn’t driven a massive sales uplift. Instead, it’s pulled customer purchasing forward in the holiday season, leaving like-for-like sales reasonably static.

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European Retailers Will Embrace Experimentation In 2015

In the Age of the Customer, consumers are increasingly empowered. They decide where, when, and how they engage with organizations as they shop. European consumers are using multiple devices along their path to purchase and almost a quarter are buying online from outside their home market. This is a growth opportunity for retailers in larger eCommerce markets where online retail sales growth is slowing. These cross border buyers are a valuable target group and more likely to use mobile devices as they shop.
 
Yet researching and buying across multiple devices and touchpoints is not restricted to those that are happy to buy online from other countries. Across the board, consumers are using smartphones and tablets more frequently and across multiple contexts. Forrester’s updated mobile and tablet commerce forecast predicts that mobile and tablet commerce combined will account for 20% of online sales in 2014 increasing to 49% of online sales by 2018.
 
Mobile phones, smartphones in particular, bridge the gap between digital and physical shopping experiences. In 2015, European consumers’ increasingly multitouchpoint shopping behavior will heighten eBusiness professionals’ attention on the influence of digital across the customer journey and into stores.
 
Forrester believes that, for Europe, 2015 will be a year of experimentation. We predict that:
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European eCommerce Pure Player Award Winner 2014 Announced!

For the past few days, I have been soaking up the sun in Barcelona at the Global eCommerce Summit 2014.  In amongst attending some great presentations from the likes of Alibaba GroupTesco,Adolfo Dominguez and Philips, I was also part of the jury to select the Pure Player Award winner for 2014.

A long list of European pure player retailers were put through a rigorous Shop Experience Audit by GfK to identify a short list of five players that six jury members evaluated. The short list of candidates included Net-a-Porter, ASOS, Amazon, Zalando and Yoox.

It's been a tough choice because all candidates are very strong players. But, we the jury persevered and evaluated the candidates based on innovation, customer engagement and consistent multitouchpoint presence.  Here are the winners:

  • Winner Gold: ASOS. Jury Assessment: ASOS goes beyond purely generating sales. They work to be present at their customers’ moment of need at every stage in the customer life-cycle, including engaging customers so they come back again. Their content and communication is consistent, as is their presence across devices. They have strong growth from international sales and a multi country presence. They've also launched innovative features like the 'fashion finder' function and a pilot program for changing rooms at pick up points.
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European Online Retail Sales Continue Double-Digit Growth, Spurred By Mobile

This morning when I woke up, one of the first things I did was pick up my iPhone. It’s increasingly part of my morning ritual – whether its checking the weather app for the day’s forecast or using the Starbucks app to pay for my morning coffee on the way to work. And I am not the only one. Forrester forecasts that European online retail sales will increasingly come from sales completed on mobile devices like smartphones and tablets.

 Forrester has now updated its  Western European online retail sales forecast for 2013 to 2018, which plots the growth rate of online sales across 17 European countries and 22 categories. Key takeaways from the forecast include:

  • European online retail sales will continue their double-digit growth through 2018 with a CAGR of 12% from 2013 to 2018, resulting in an online retail market worth €233.9 billion by 2018
  • Southern European markets will grow faster than Northern European markets as they continue to mature. However, the more mature northern European markets are larger online retail markets overall.
  • Online retail sales will be increasingly from mobile devices. Just under half of all online retail sales across the EU-7 will be from online purchases made using a smartphone or tablet by 2018
  • The online grocery category will grow at the fastest rate through 2018 and will surpass consumer electronics to become the second-largest online category in Europe by 2018.
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How do you quantify the influence of digital on physical store sales?

Europeans spend €5 in-store for every €1 spent online after researching products via digital touchpoints. Digital activities influence a significant proportion of physical store sales. Yet, many eBusiness professionals tend to evaluate their digital efforts in terms of online sales generated and struggle to measure the value of a website and digital activities in terms of the overall influence on the shopper journey.

The key for eBusiness professionals is to recognize the influence that digital has on purchase decisions across the customer lifecycle and keep consumers within their own ecosystem, no matter where the final transaction takes place (in the physical store, on their website or via their mobile app).

But how can you quantify the influence of your digital presence on physical store sales?

For several years we have published the cross channel retail sales forecasts in the US and for the first time Forrester has developed a European version focused on seven European markets: UK, France, Germany, Netherlands, Italy, Spain and Sweden. The forecast projects the growth of cross channel sales - sales that are influenced by the digital touchpoints but where the purchase is completed in a physical store.

A few key takeaways from a European perspective include:

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European Retail Segmentation: Emerging Patterns Of Multitouchpoint Shopping

Consumers are embracing an increasing number of devices and touchpoints to shop – this we know and at Forrester we call this the mobile mind shift. But eBusiness professionals still need to figure out the relative influence each touchpoint has on their customers’ shopping behavior in order to determine where to focus their efforts. Should you follow the likes of House of Fraser with a mobile first web presence? How do your customers use your digital presence for research pre-purchase?

Forrester’s new retail segmentation helps eBusiness executives answer these questions by providing a framework to map out the complex ecosystem of touchpoints and devices their customers use to shop. The segmentation identifies increasingly sophisticated multi-touchpoint shopping behaviors and helps eBusiness executives to identify critical touchpoints to create the most relevant shopping experiences for customers across markets.

Our new report focuses on the nuances of shopper behavior across European markets and Martin Gill’s recent report provides a global overview.

Here’s how European shoppers differ:

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Will London Underground Stations Become A New Delivery Option?

The prospect of remote collection lockers and click & collect points replacing London Underground ticket offices sparked a round of strikes last week, creating havoc for commuters. The second round of planned strikes was only narrowly averted this week.

Transport for London’s (TFL) proposal to close 240 underground ticket offices and replace them with automatic ticket machines will result in a proportion of job losses for station staff but present an opportunity for TFL and UK retailers alike, by:

  • Responding to the popularity of click and collect in the UK. Forrester’s Consumer Technographics® Retail Survey data shows that UK shoppers are responding to retailers’ omnichannel fulfillment capabilities, readily adopting click & collect services. UK grocery stores Asda, Waitrose and Tesco are not waiting for the closure of ticket offices. They are already setting up trials for click & collect services at selected stations across the London Underground network. The click and collect service will allow shoppers to order their food online before a cut-off point during the day, for collection at their local station on their way home in the evening.
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