7 out of 10 Norwegian consumers purchase online by mid-November as consumers aged 45-54 years old stand for most growth; further growth expected in December – mostly in Fashion

AfterPay Insights’ latest research, now containing survey responses from more than 16.000 interviews with Norwegian consumers shows that - by mid-November - online purchases in Norway grow to +51% compared to the number of purchases made mid-March. The main driving force behind Norwegian e-commerce growth is the increase of the online customer base, which grows from 47% pre-Corona to 71% of all Norwegian consumers by mid-November. The inflow of new online shoppers is largest among consumers aged 45-54; 51% purchased online in March, and this share has grown to 76% by mid-November. This is equivalent to a +48% growth in this age bracket.

Another important driver of e-commerce growth is that existing online shoppers shift a larger share of their purchases from brick-and-mortar stores to online. In Norway, Heavy Shoppers (5 or more bi-weekly online purchases) comprise 9% of all online shoppers by mid-November, but they stand for 38% of all online purchases.

Norwegian consumers intend to increase their overall shopping in December and they aim to shift even more purchases from brick-and-mortar stores to online channels. Only 21% of Norwegian Christmas gifts are purchased by mid-November - this also indicates continued e-commerce growth in December. Norwegian consumers say that they will mostly shop in Fashion in December, but Beauty/Cosmetics, Media/Entertainment, Electronics/Telecom and Toys also stand out.

With the growth of online purchases from August, Norwegian consumers’ worries about their personal health increase and surpass the level of worries Norwegian consumers have about their finances. Even though we know that worries about health relate to spending more time at home (which is in turn is related to making more purchases online), a seasonality effect and the effect of ‘second wave’ lockdown measures (creating barriers to shop in physical stores) are more likely to be at play here.

We also see that Norwegian consumers’ satisfaction with merchants’ performance increases significantly. During the first corona wave, satisfaction with delivery times suffered. And even though online purchase volumes are at a high by mid-November, consumers’ satisfaction with delivery time has not been impacted as much as it was during the initial phase of the pandemic.

We are currently analyzing the effects of the Black/Cyber week and will bring you this story in the coming weeks.

Norwegian consumers intend to increase purchases in December and continue to shift to online

During the summer (June-July-August) Norwegian consumers intend to decrease their overall shopping, but in September this starts to shift. And from the first half of November, the share of consumers who intend to increase their overall shopping is larger than the share intending to decrease shopping. Norwegian consumers also state that they want to shift more purchases from brick-and-mortar stores to online channels – and this intention to favor online over offline grows stronger in November.

Trusting Norwegian consumers’ intentions, both overall purchases and the share of purchases made online are expected to increase during December. Another indicator of further December growth is that consumers in Norway only purchase 21% of their expected Christmas gifts up until mid-November.

Fashion sticks out as the category where the largest share of consumers expect to increase purchases in December – followed by Beauty/Cosmetics, Media/Entertainment, Electronics/Telecom and Toys. We also see that online Toys purchases increase dramatically in mid-November at +134% accumulated growth.
The category that grows the most in mid-November is purchases of Home Deco/Furniture, at +152% accumulated growth, but consumers are hesitant to increase purchases in this category during December. Tickets and Travel/Transport, however, are at -41% and -47% respectively to date, and the outlook for a December growth does not look positive.

Bear in mind, this graph does not take category size into account. For example, Toys stand for 3% of all online purchases in Norway while Fashion, being the largest category, accounts for 20% of all online purchases in mid-November.

Norwegian Peak Season drives e-commerce purchases to 2020’s highest peak so far

E-commerce purchases in Norway have - by mid-November - grown to +51% compared to mid-March. This is a yearly high, and is based on consumer interviews that ended Sunday before the start of Black Week.

The overall e-commerce purchase development in Norway, along with the changes in consumer motivations for purchasing online and the restrictions imposed due to the pandemic, reveals five distinct development phases – so far.

The first phase in April sees a boom in e-commerce purchases. Our results show that this is driven by restrictions and a virus scare. During this period, e-commerce purchases in Norway peak at +32%.

During the second phase, in June and July, restrictions ease and e-commerce purchases dampen. Consumer motivations also change, convenience replaces being (partially) locked down as the key driver for online purchases.

Going into the vacation period, the third phase of development shows a seasonality low point where e-commerce purchases bottom out in Norway during the first half of August at +5%, i.e. almost returning to the same level of online purchases as in mid-March.

In the fourth phase we see a strong post-vacation recovery of online purchases starting in during the second half of August. E-commerce growth continues to increase at a steady pace throughout October, as the second pandemic wave hits and country restrictions again tighten.

And during the fifth phase – the phase that we are currently in – we enter peak season with Black Friday and Cyber Monday. Even before this week, e-commerce purchases hit a yearly high at +51% in Norway and by far surpasses the initial peak that we see in April (at +32% growth).

Five out of six overarching online categories grow post-summer

In mid-March we see online Food/Health Product shoppers doubling, from 9% of Norwegian consumers to 18%. And Fashion/Cosmetics’ journey is also impressive, but more gradual. 18% of Norwegian consumers are regular online shoppers in Fashion/Cosmetics’ before the pandemic. And by May 26% of Norwegians buy Fashion/Cosmetics online. However, Travel/Tickets suffers, starting out with 11% of shoppers and this drops to 3%, almost overnight.

Focusing on the post-summer growth of online purchases in Norway, where overall e-commerce growth goes from +23% in the second half of August to +51% by mid-November, we see that all six over-arching online categories but Travel/Tickets grow in share of consumers.

One category stand out in terms of relative growth rate. The share of consumers purchasing online in Sports/Craft/Play grew from 9% to 16% of consumers (+78% growth rate), primarily driven by the sharp November increase in Toys. However, Fashion/Cosmetics dominate in size as almost one third of Norwegian consumers buy online in this category during November. As Fashion/Cosmetics has grown from 24% online purchasers in the first half of August to 31% in mid-November, the relative growth rate is at +29%.

Norwegian e-commerce growth is driven by the inflow of new consumers in combination with Heavy Shoppers buying more

Zooming out to Norwegian e-commerce as a whole, we see that the overall share of consumers having made at least one online purchase shows a significant initial inflow at the outset of the pandemic – from 47% of consumers pre-corona to 61% of consumers by the second half of April. This online shopper base stays stable at around 60% from May until August. During the vacation period the share of online shopppers drops a couple of pct. points. But from the second half of August online purchases grow – and so did the online customer base to 71% of Norwegian consumers by mid-November.

The other force at play is existing online shoppers buying more. Before the pandemic, the share of Norwegian consumers who made 5 or more online purchases on a bi-weekly basis is 5%. During the initial development phase, the share of Heavy Shoppers almost doubles to 9% of consumers at peak purchases during April. When online purchases bottom out, during the first half of August, Heavy Shoppers’ share is again at 5%. And by mid-November this share returns to the previous high (at 9%) simultaneously with overall purchases hitting the 2020 high at +51% growth.

The key take-out here is that online purchase growth is driven by a combination of the existing online customer base shifting more purchases to online – as well as brick-and-mortar shoppers venturing into the online space. The effect of loyalizing existing online shoppers is also evident as Heavy Shoppers stand for a disproportionately large share of online purchases; by mid-November 9% of Norwegian consumers were Heavy online Shoppers, but they stand for 38% of all online purchases in Norway.

The online customer base grows most among consumers aged 45-54

Age heavily impacts the overall increase in online customer base in Norway, from 47% pre-Corona to 71% of Norwegian consumers by mid-November. In the oldest demographic (consumers aged 65+), 42% are classified as online shoppers (at least one bi-weekly online purchase) in March, and during the initial lock-down the online shopper share significantly increased to 53%, a level that is still upheld in November. Among consumers in the second oldest age bracket, aged 55-65, the increase in online shoppers is similar at almost 10 pct points from May to November.

The largest growth in online shoppers is among consumers aged 45-54, which grows from 51% online shoppers in March to 76% in November (a relative growth rate of +48%). And due to the growth in this age bracket, all consumer groups aged 18-54 are by November approximately at the same online shopper share (76-82%).

Norwegian consumers are increasingly worried about their health

Ever since March, consumers in the Netherlands and Germany are significantly more worried about their health in comparison to their worry about personal finances. But in Norway, we see the opposite pattern – that worries about finances are larger than worries about health. This is true up until August, when Norwegian consumers’ worries about health surpass their worries about finances.

And since August, Norwegian consumers' worries about health increase from 31% to 39% of all consumers. During the same period, the share of consumers who express a worry about personal finances only increases marginally.

Our previous analytics also show that worries about health are related to spending more time at home, which is in turn is related to making more purchases online. And even though we see tendencies of a lagged correlation between worries about health and the online purchase growth, the seasonality effect and the effect of lockdowns (creating barriers to shop in physical stores) are likely more at play here.

Consumers’ satisfaction with merchants increases

Norwegian consumers’ satisfaction with merchants undergoes quite dramatic changes during the initial phase of the pandemic. Overall, the conclusion is that the e-commerce eco-system manages the increase in volume, but delivery time suffers in the early phase.

As customers' satisfaction with delivery time improves following the initial peak in purchases that occurred in April, and still recovers at a continuous rate, we see that merchants manage to improve their processeses significantly. By August, relative customer satisfaction levels across the main dimensions measured even out.

In Germany and the Netherlands, consumers relative satisfaction with delivery time decreases in October and November as online purchases experienced a heavy growth. But in Norway we don’t see this decline in consumers’ satisfaction with delivery time – even though there has been a continouos growth in online purchases from the second half of August to mid-November. This is a remarkable improvement by Norwegian merchants. Consumers’ lowered expectations of fast delivery times during peak season could also have impacted these numbers. But considering the minimal impact on customer satisfaction, this effect is to be considered small.

Another aspect that stands out in Norway is consumers’ high satisfaction with prices online, this must be considered a clear differentiator for e-tailers vs brick-and-mortar stores.

What is next?

Stay tuned for our upcoming blogs about consumers’ behavior during Black and Cyber Week.