78% of Dutch consumers shop online mid-November as older consumers shift to online; further growth expected in December, especially Fashion and Toys

AfterPay Insights’ latest research, which now contains survey responses from more than 18.000 interviews with Dutch consumers, shows that - by mid-November - online purchases in the Netherlands grow to +61% compared to the number of purchases made mid-March. The main driving force behind Dutch e-commerce growth is existing online shoppers shifting a larger share of their purchases from brick-and-motar stores to online. Heavy Shoppers (5 or more bi-weekly online purchases) comprise 16% of all online shoppers by mid-November, but they stand for 50% of all online purchases in the Netherlands.

Another important factor in the massive increase of e-commerce is that the online customer base grows from 64% to 78% of all Dutch consumers by mid-November. The inflow of new consumers to e-commerce is largest among older consumer groups; 45% of all consumers aged 65+ years old shop online in March, and this share grows to 66% by mid-November, equivalent to a +44% growth in this age bracket.

Dutch consumers intend to increase their overall shopping in December – and in addition they aim to shift even more purchases from brick-and-mortar stores to online channels. The fact that only 14% of Dutch Christmas gifts are purchased by mid-November also indicates continued e-commerce growth in December. Dutch consumers say that they will mostly shop in Fashion in December, but Toys also stands out.

With the growth of online purchases since September, Dutch consumers’ worries about their personal health also increase significantly in October. 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 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 does not drop to the same extent as during the initial impact of the pandemic.

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

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

During the summer (June-July-August) Dutch consumers intend to decrease their overall shopping, but in September this started 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. Dutch consumers also state that they want to shift more purchases from brick-and-mortar stores to online channels – the intention to favor online over offline is stable since June.

Trusting Dutch 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 the Netherlands only purchase 14% of their expected Chrismas 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 Toys and Hobby Articles. We also see that online Toys purchases increase dramatically from the first half of November and is by mid-November at +261% growth – likely the result of ‘Sinterklaas’ shopping.

Online purchases of Home Deco/Furniture, Kitchen Appliances and Hardware/Building Materials also increase significantly in November and are now at +120-150% growth. But consumers are hesitant to increase purchases in these categories during December. Tickets and Travel/Transport, however, are at -73% and -33% 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 9% of all online purchases in The Netherlands while Fashion, being the largest category, is twice as large accounting for 18% of all online purchases in mid-November.

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

E-commerce purchases in the Netherlands have - by mid-November - grown to +61% 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 the Netherlands, 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/May 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 the Netherlands peak at +51%.

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 an increase of pre-vacation purchases in July, followed by a seasonality low point where e-commerce purchases bottom out in the Netherlands during the second half of August at +15%.

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

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 +61% in the Netherlands surpassing the initial peak that we saw in May (at +51% growth).

Five out of six overarching online categories grow post-summer

In order to shed some light on the drivers of this growth in E-commerce purchases, we look at the development of the online customer base (having made at least one bi-weekly online purchase) across six overarching categories.

In mid-March we see a dramatic increase in online Food/Health Product shoppers, from 12% of Dutch consumers to around 30% by April. And Fashion/Cosmetics’ journey is equally impressive, but more gradual. 17% of Dutch consumers are regular online shoppers in Fashion/Cosmetics’ before the pandemic. And by April one third of Dutch consumers are buying Fashion/cosmetics online. However, Travel/Tickets suffers, starting out with 8% of shoppers and this dropped overnight to 3%.

Focusing on the post-summer growth of online purchases in the Netherlands, where overall online growth goes from +15% in the second half of August to +61% by mid-November, we see that all six over-arching online categories but Travel/Tickets grow in share of consumers.

Two categories stand out in terms of relative growth rate. The share of consumers purchasing online in Household/Home Improvement grew from 10% to 17% (+78% growth rate). And Sports/Craft/Play grew from 14% to 25% of consumers (+75% growth rate), primarily driven by the sharp November increase in Toys and Hobby Articles.
However, Fashion/Cosmetics and Food/Health Products dominate in size as one third of Dutch consumers buy online in these categories during November, with a growth rate of +21% and +16% respectively.

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

Zooming out to Dutch e-commerce as a whole, we see that the overall share of consumers having made at least one online purchase shows a steep initial inflow at the outset of the pandemic – from 64% of consumers pre-Corona to 74% of consumers by the first half of May. This inflow of new consumers has stayed stable at around 70% from May until August. During the vacation period the share of online shopppers dropped a couple of pct points. But from the first half of September online purchases grew – and so did the online customer base to 78% of Dutch consumers by mid-November.

The other force at play is existing online shoppers buying more. Before the pandemic, the share of Dutch consumers who made 5 or more online purchases on a bi-weekly basis is 7%. During the initial development phase, the share of Heavy Shoppers more than doubles to 17% of consumers at peak purchases during the first half of May. When online purchases bottomout, during the second half of August, the Heavy Shopper share is 10%. And by mid-November this share returns to the previous high (at 16%) simultaneously as overall purchases hit the 2020 high at +61% 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 16% of Dutch consumers were Heavy online Shoppers, but they stand for 50% of all online purchases in The Netherlands.

The online consumer base has grown most among older consumers

We see that age is a decisive factor in the overall growth of the online consumer base in the Netherlands; mid-March, 64% of Dutch consumers shopped online, and this grows to 78% by mid-November. Survey results indicate that as consumers are older, the increase in the share of consumers who shop online also increases. Among consumers aged 65+, 45% made at least one bi-weekly purchase online in March. This share is by November at 66%, equivalent to a +44% growth in this age bracket. The growth rate among consumers aged 18-24 years old is much lower, going from 70% in March to 78% in November (i.e. a relative growth rate of +13% in this age bracket).

We also see that initial pandemic impact in May had the most impact on online purchase share among the older age groups, while the summer vacation period had the most impact on younger age groups.

Dutch consumers’ worries about health increase in October

In line with for example Germany, Dutch consumers are generally more worried about their health than their personal finances. In mid-March, 53% of Dutch consumers express being worried about their health, compared to 36% expressing a worry about their personal finances. After April, Dutch consumers worries about their health drop to about 35% and this remains stable up until the summer. After that, consumers’ worries about health increase to about 45% of all consumers.

But during the past two months, Dutch consumers' worries about health increase significantly while worries about personal finances remain stable. The result is that the gap between worries about health and worries about finances is now at almost the same magnitude as in mid-March.

Our previous analytics have also shown 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) arelikely more at play here.

Consumers’ satisfaction with merchants increases

Dutch 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 – and to some extent also logistics (by keeping products in stock).

As customers' satisfaction with delivery time improves during the peak purchases in May and still recovers at a continuous rate, we can see that merchants have managed to improve their processeses significantly. By September, relative customer satisfaction levels across the main dimensions measured even out.

But during the dramatic growth in online purchases in October and November, Dutch consumers’ relative satisfaction with delivery times decreases again, but not nearly to the same extent as we see in April. Even though online purchase volumes are higher in November compared to April/May, consumers’ satisfaction with delivery time does not drop to the same extent as it does in April/May. This is a remarkable improvement by merchants. Consumers’ lowered expectations of fast delivery times during peak season could also have impaced these numbers. But considering the difference, this effect is to be considered small.

What is next?

Stay tuned for an updated mid-November deep dive into German and Norwegian e-commerce behavior very soon. And we will also take a closer look at consumers’ behavior during Black and Cyber Week.