Deze post is ook te lezen in het Nederlands.
AfterPay Insights research among more than 3,400 consumers in the Netherlands since the corona outbreak reveals that e-commerce purchases are up +32% compared to Dutch consumers’ normal online shopping behavior, so preceding the corona outbreak.
The increase of online purchases is largely driven by existing online shoppers buying more. Both infrequent- and heavy shoppers have increased e-commerce purchases, and our research reveals that only more frequent online shoppers are prone to shifting purchases from brick and mortar stores to online in certain categories - this is especially noticeable in the food categories.
We see that online shoppers are expanding their repertoire by venturing into new categories online. This is especially evident in Fashion where 18% of the online shoppers made at least one purchase in the second half of March, and 28% have done so in the second half of April. This partly explains the growth of Fashion with +70% in number of purchases since the corona outbreak.
Heavy shoppers make up 14% of all Dutch online shoppers but they account for 43% of all online purchases in The Netherlands. In order to attract and retain heavy shoppers’, merchants need to focus on a fast and reliable delivery. This includes both managing these shoppers decreasing satisfaction with speed of delivery as well as helping them overcome their worry about the risk of getting contaminated by packages ordered.
Compared to before the corona outbreak, e-commerce purchases in the Netherlands were up 7% after the second half of March. And purchases have continued to increase, by the second half of April they were up 32% compared to before the corona outbreak.
Dividing the Dutch e-commerce shoppers into groups by online purchase frequency reveals some interesting insights. First of all we can see that the share of heavy shoppers (having made 5 or more online purchases during the last two weeks) has increased continuously from 7% of the online shopper base prior to the corona outbreak to 14% by the second half of April. From a merchant perspective, heavy shoppers are a relatively small but critical segment, as they only represent 14% of Dutch online shoppers by the last weeks of April but they stand for 43% of all online purchases.
And at the other end of the spectrum, the share of infrequent online shoppers (having not made any purchases during the last two weeks) has decreased over time, i.e. they have also started making more online purchases.
The merchant critical heavy shopper segment is dramatically over-represented among people aged 18-44 , holding a full-time job with a mid to high income. The segment comprises more women and a quarter of the segment consists of women aged 18-34. The majority of heavy shoppers (55%) have kids living at home and a quarter live in urban areas. As heavy shoppers have increased from 7% of online shoppers preceding the corona outbreak to 13% in the second half of April, there has also been a shift in the demographic composition of this segment. Most notably, the inflow to this segment are younger women (aged 18-34) as well as consumers in the pre-family life stage. As a result, the earlier over-representation of high-income earners among heavy shoppers has slightly diminished.
The medium shopper segment (as defined by having made 2-4 online purchases in the last 2 weeks) has reduced marginally in number of consumers. This segment has a prominent middle age profile where the majority are aged 25-54. Almost a third are women aged 35-64, many with kids living at home. Overall, the segment comprises more women than men. The demographic profile of this segment since the corona outbreak has shifted towards more women living in villages/small towns, with less families with kids living at home.
The light shopper segment and the no purchases segment are over-represented among older consumers (aged 55+) without kids living at home. Their disposable income is also lower compared to the other shopper types. The average age of consumers in the segment has shifted over time to become even higher.
The number one driver for Dutch consumers to increase e-commerce purchases is still to avoid meeting other people in physical stores, i.e. to prevent themselves from getting COVID-19.
Among the reasons related to being locked down at home, the convenience of online shopping is the largest driver to shop more online. The share of consumers who motivate increased online shopping by ‘cannot leave home due to taking care of family’ has decreased since the corona outbreak.
Reasons related to a reduced amount of available services (closed stores and restaurants, less public transport) are basically level since the corona outbreak.
Deep diving into the purchase frequency segments, 70% of heavy shoppers claim the reason for shopping more online is to avoid meeting people in physical stores – and this share has increased over time. Convenience is still the second most important driver for this segment, but it has decreased somewhat in importance recently. The pattern regarding the other drivers are quite similar between heavy shoppers and the other online shoppers.
At the beginning of the corona outbreak, the most common motivation for Dutch consumers to decrease online purchases was due to the financial uncertainty in society. This motivation has decreased dramatically, and now the personal financial situation is an equally large driver for decreasing online purchases.
Virus-related worries have also decreased, as well as the concern that packages might get delayed or not delivered at all. On the other hand, a driver for decreased online shopping that has become significantly more important is that consumers now want to support local physical stores.
As the inherent trait of a heavy shoppers is to shop more online, consumers in this segment also need to encounter heavier barriers in order to make a conscious decision not to shop online.
The most important barrier that prevents heavy shoppers from making more online purchases is the worry of getting contaminated with COVID-19 by the packages. But there is also a large share that want to support local physical stores. Their personal financial situation can hinder them from making purchases, but heavy shoppers do not claim ‘being careful spending due to the financial uncertainty in society’ as a barrier to the same extent as the less frequent online shoppers.
The general level of worry among Dutch online shoppers has decreased since the start of the corona outbreak. Worries about personal health have decreased the most, from 53% at the second half of March to 44% by the second half of April. In that same period, worries about the personal financial situation decreased from 36% to 32%.
Without a doubt, the level of worry about the corona outbreak has a powerful impact on consumers’ e-commerce behavior.
A general conclusion is that the more worried a consumer is about corona from a health- as well as financial perspective, the more online purchases a consumer does. Heavy shoppers are the most worried, followed by Medium shoppers and Light shoppers. During the past month, the financial worry has not decreased among heavy shoppers but it has among mid- and light shoppers.
For a deep dive on worries and the impact on e-commerce purchases, look into our earlier blog about how worries about health and finances have impacted consumers’ online behavior.
Directly following the corona outbreak, Fashion and Cosmetics/Beauty were negatively affected in the Netherlands as both showed a decrease in online purchases. But both categories have since bounced back and are, compared to the number of purchases before the corona outbreak, now up 70% and 20% respectively. The other categories in the chart below have grown continuously since the corona outbreak. Noticeable is that the growth for Take away food has slowed down since the first half of April.
Other categories in the Netherlands displayed a growth directly following the corona outbreak, but have since basically remained stable. Notable (and to be expected) is that Tickets has dramatically declined following the outbreak, and has stayed at that same low level ever since.
There are also some categories that increased following the corona outbreak, but have shown a continuous decrease in purchases since then. The outlier here is ‘Travel and Transportation’ which never increased and has continued to decline in number of purchases.
Deep-diving into shopping frequency, analytics reveal that consumers’ share of online purchases made within the categories of ‘Food and groceries’ as well as ‘Take away food’ is correlated to online purchase frequency. The conclusion here is that you have to be a quite frequent online shopper (heavy shopper) in order for you to shift your food purchases from offline channels to online.
We can still expect the number of online purchases in the Netherlands to grow in the month to come. This is because the share of consumers claiming they will increase online purchases in the coming month exceeds the share saying they will decrease purchases. But at the same time, we see an increasing trend in the share claiming they will buy at the same level as before – indicating that the current growth rate will likely be a bit dampened.
As might be expected, heavy shoppers are more positive towards increasing their number of online purchases in the coming month compared to the other shopper segments. But in line with the overall results, the share claiming they will buy at the same level as today is also increasing among heavy shoppers – and this pattern is consistent across all shopper types.
For most categories, the rate of recent growth is in line with the expected future growth. But there are some exceptions. Gardening tools and Hardware/Building materials has shown a dramatic increase, but the future outlook is pointing towards a dampened rate of growth. And Pet food/supplies has declined since the corona outbreak, but this category looks to be returning to growth numbers in May.
As described above, the main reason for the 32% total increase in e-commerce purchases in the Netherlands is that current e-commerce consumers have started buying more – as opposed to the increase being driven by offline consumers switching to online purchasing.
But we also see that online shoppers are expanding their repertoire by venturing into new categories online. This is especially evident in Fashion where 18% of the online shoppers made at least one purchase in the second half of March, and 28% have done so in the second half of April.
Currently, the most important reason for Dutch consumers to choose a webshop is if they have purchased there before. That the webshop is perceived as secure is the second most important aspect, which is also connected to having a previous experience with the webshop.
Consumers also think lowest price is important, but it is a distant third compared to the other two reasons for choosing a specific webshop, and this aspect is considerably less important in the Netherlands compared to in the other countries included in these analyses.
We see a very clear link between the number of online purchases made and the amount of demands put on merchants. The ranking of the demands is similar across the different segments based on online purchase frequency, with some interesting differences.
The last point is especially interesting as heavy shoppers - for the most part - are experienced online shoppers. The question that arises here is how heavy shoppers define their perception of ‘secure’? We are currently digging deeper into this abstract concept, and will return with our insights in a coming blog.
Analyzing the share of consumers who state if needs have become less or more important, the overall conclusion is that all demands of merchants have become more important. Compared to before the corona outbreak, the needs that have increased the most in importance are ‘having used the webshop before’ followed by ‘well-known webshop’ and ‘webshop I perceive as secure’.
These demands have increased for all purchase frequency segments (heavy shoppers, medium shoppers as well as light shoppers). In addition to this, heavy shoppers have also increased their demands on merchants regarding having a wide range of products, and even more notably when it comes to the webshop guaranteeing a reliable delivery.
Consumers are most satisfied with online merchants’ performance regarding shipping and delivery as well as the payment process. The lowest degree of consumer satisfaction is measured for customer service and the return process. But the aspect that has decreased the most since the corona outbreak is consumers’ satisfaction with fast delivery time; this drop is mainly driven by the heavy shoppers segment.
Interestingly, the overall level of satisfaction with merchants’ performance does not differ significantly between light shoppers, medium shoppers and heavy shoppers. However, the satisfaction does differ per area.
Light shoppers are relatively more satisfied with products in stock, low price and fast delivery. But they are, on the other hand, less satisfied with the wide range of products.
Merchant considerations:
Medium shoppers’ level of satisfaction across all areas is more or less in line with the average across all online shoppers, but security and good customer service stand out as key needs. Once these needs are met, the likelihood that a medium shopper transitions to a heavy shopper increases. This relates to the fact that these shoppers have a more offline mindset and prefer a tangible, face-to-face experience.
Merchant considerations:
Heavy shoppers are more satisfied with merchants’ wide range of products, customer service and the return process. And they are considerably less satisfied with products in stock and partly with low prices. But what sets heavy shoppers apart is their dissatisfaction with fast delivery time.
Merchant considerations:
Coming up next are deep dives into the increases in German and Norwegian e-commerce. Also stay tuned for a detailed analysis of how the perception of ‘security’ plays a role in consumers’ webshop selection.
