Our end of June research – now covering more than 7.600 interviews with Dutch online shoppers - indicates that Dutch consumers will reduce their overall purchases in July (i.e. in both online and offline purchases). It is worth noting that July is a summer month, which may impact consumers’ purchase intent. At the same time, Dutch consumers say that they will continue to shift purchases to online channels in July.
This is a continuation of the trend we saw in June, when Dutch online purchases picked up to +40% in the second half of June (compared to early March) – after a period of stabilized and even decreased growth in May. Even though Dutch society has opened up, consumers’ return to brick-and-mortar stores is – so far - not happening very fast. Only 8% of Dutch consumers say they shopped more in physical stores in June, compared to 24% who say they shopped more online.
Our research also shows that 16% of Dutch online shoppers say that their financial situation has become more stressed and 9% say that their financial situation has improved in June. The most important reason for fewer purchases is the need to save money; this is especially evident in the younger age groups. Secondary motivations are the intention to change lifestyle by reducing overall consumption, along with having general worries about the future. And third tier motivations include the risk of becoming unemployed, as well as wanting to pay off mortgages and loans.
When looking at the development of online product categories, Fashion stands out in The Netherlands, as it is the leading category in acquiring new consumers: in the second half of March, 18% of Dutch shoppers made at least one purchase in online Fashion, and this share has grown to 28% by the second half of June.
We asked consumers to estimate if they would increase or decrease their total number of purchases in general, as well as online purchases specifically. And we find that Dutch consumers project that they will make more purchases online. This means that, providing that consumers act on their intentions, we can expect e-commerce growth to further amplify in The Netherlands in July. The growth is driven by an accelerated shift of purchases from brick-and-mortar stores to online channels.
Even though Dutch online shoppers say they will consume less overall, a larger share of their purchases will be made online in July, coming at the expense of sales in brick-and-mortar stores.
As consumers shop more online, it becomes more likely that they will buy more overall next month. It also becomes more likely that they shift even more purchases from brick-and-mortar stores to online.
As overall consumption is for Dutch consumers slows down in July, consumers’ survey responses indicate that e-commerce will grow in July. In most product categories, recent growth has been driven by a combination of an expanding consumers base as well existing online shoppers buying more. But in The Netherlands, Fashion is an exception as purchases are predominantly driven by the inflow of new consumers: in the second half of March, 18% of Dutch shoppers made at least one purchase in online Fashion, and this share has grown to 28% by the second half of June.
At the same time, we see that purchases within Hardware/Building materials, Kitchen appliances, Home décor/furniture and Gardening tools have shown a significant increase since end of March, but the future outlook is pointing towards a dampened rate of growth.
One of the key drivers for consumers to purchase less online is related to a deteriorated financial situation – and the share of consumers claiming that personal finances are limiting purchases has increased since end of March. In The Netherlands, 19% of online shoppers even say that their financial situation today is worse than their financial situation in pre-corona times. But looking at the recent change, the share of consumers who say it has worsened is lower (16%). And looking one month ahead, only 9% of Dutch online shoppers think it will become worse. In fact, the outlook for July is positive as the share projecting it will become better is larger than the share thinking it will become worse.
Looking at shopping frequency, Heavy Shoppers (having made 5 online purchases or more in the past 2 weeks) have a more positive future outlook as 17% think their financial situation will be better in the coming month – which can be compared to 10% among Light Shoppers.
Dutch online shoppers’ worries have decreased continuously since end of March. Worries about personal health have decreased the most, from 53% at the second half of March to 36% by the second half of June. In that same period, worries about the personal financial situation also decreased, from 36% to 30%. We can also conclude that – over the past months - Dutch consumers worries have been more health than finance-focused.
When we connect worries to e-commerce behavior, we see that the level of worry has a powerful impact on consumers’ online purchases. A general conclusion is that the more worried a consumer is about health- as well as finances, the more online purchases a consumer does. And when mixing in shopping frequency, we see that Heavy Shoppers (5 or more online purchases in the past 2 weeks) are most worried, followed by Medium Shoppers and Light shoppers.
Since end of March, the increased number of online purchases in The Netherlands is largely driven by consumers shifting purchases from brick-and-mortar stores to online channels. 24% of Dutch online shoppers say they have started shopping more online and less in physical stores in the past month, and 8% say they have started shopping more in physical stores and less online. And not surprisingly, the more purchases a consumer currently makes online, the more a consumer states that they have shifted their share of purchases from offline to online.
To understand the shift in a larger context, it is important to note that the share of Dutch, German and Norwegian consumers who have shifted to online purchases is higher than the share who have shifted to offline purchases. In this regard, The Netherlands displays the largest difference (24% online versus 8% offline), which indicates that the shift from online to offline is expected to be larger than in Germany and Norway.
In the first phase of Dutch e-commerce development, we see a rapid increase in e-commerce purchases up until the first half of May, with e-commerce up +51% in The Netherlands compared to pre-corona times. In the second phase, going into the second half of May, growth stabilized and a plateau is reached. Afterwards, e-commerce growth even decreases in a third phase that takes place in the first half of June. But it now seems like e-commerce has increased again in Mid-June.
The share of Heavy Shoppers (having made 5 or more online purchases during the last two weeks) has almost doubled in The Netherlands, from 7% of the online shopper base in pre-corona times, to 13% by the second half of June. The share of Heavy Shoppers peaked at 17% during the first half of May, which corresponds to the peak in total number of purchases in The Netherlands. From a merchant perspective, Heavy Shoppers are a relatively small but critical segment, as they only represent 13% of Dutch online shoppers by the second half of June but they stand for 48% of all online purchases.
We see interesting developments in the motivations to purchase online over time. In The Netherlands, finding cheaper prices online has become increasingly more important over time, along with the fact that online shopping offers more convenience. It looks like the functional benefits of online shopping have increased in impact, and are possibly leading to a lasting change. And since end of March, the fact that stores and restaurants were closed and having to take care of family at home were two important reasons to increase e-commerce purchases for Dutch, German and Norwegian consumers. But these have now significantly decreased in importance.
As for the barriers for consumers to decrease online purchases, the share of consumers who have virus-related concerns around receiving packages has decreased continuously. On the other hand, a limited personal financial situation has increased in importance for making less e-commerce purchases.
As the world is still changing at a rapid pace, we will keep monitoring consumers’ e-commerce behavior over the summer and get back with an updated deep dive into Dutch e-commerce at the end of July.
Stay tuned for an updated end of June deep dive into German and Norwegian e-commerce behavior very soon.