Our mid-June research – now covering more 7.400 interviews with Norwegian online shoppers - indicates that Norwegian consumers will reduce their overall purchases in July (i.e. both online and offline purchases). If Norwegian consumers act on their intentions in July, this will break the trend that we saw in mid-June, when online purchases increased as an effect of consumers shifting purchases from brick and mortar stores to online - 8% of Norwegian consumers say they shopped more in physical stores, compared to 17% who say they shopped more online. Worth noting is that July is a summer month, which may impact consumers’ purchase intent.
Our research shows that 16% of Norwegian online shoppers say that their financial situation has become more stressed. And our data also shows that – since mid-March - Norwegian shoppers are generally more worried about their personal financial situation than their health. So, it is no surprise that the most important reason for fewer overall purchases is the need to save money, although 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.
At the same time, 12% of Norwegian consumers say that their financial situation has improved in June. And 17% say that they expect this to further improve in July; this means that Norwegian shoppers have a positive short-term outlook on their financial situation.
When looking at the development of online product categories, Fashion stands out in Norway, as it is the leading category in acquiring new consumers: in the second half of March, 14% of Norwegian shoppers made at least one purchase in online Fashion, and this share has grown to 21% by mid-June.
We asked Norwegian 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 Norwegian consumers project that they will buy less overall in July, and also that they will decrease their share of purchases online. Providing that consumers act on their intentions, this means that we can expect a dampened rate of e-commerce growth in July.
Even though overall e-commerce purchases for Norwegian consumers will likely slow-down in July, we can still expect some categories to grow in July while others will decline. Looking back, recent growth for most categories has been driven by a combination of an expanding consumers base as well existing online shoppers buying more. But in Norway, Fashion is an exception as purchases are predominantly driven by the inflow of new consumers: in the second half of March, 14% of Norwegian shoppers made at least one purchase in online Fashion, and this share has grown to 21% by mid-June.
At the same time, we see that especially purchases within Gardening tools, Toys and Kitchen appliances have shown a significant increase since end of March, but the future outlook is pointing towards a dampened rate of growth. And at the other end of the spectrum, Travel/transport and Tickets have decreased dramatically in purchase volumes since the end of March, but here the future outlook is now pointing towards an upturn in purchases.
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 Norway, 22% of online shoppers 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 11% of Norwegian 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, there is no significant difference between Heavy Shoppers (having made 5 online purchases or more in the past 2 weeks) and Light Shoppers when it comes to the projection of how their financial situation is likely to change in the coming month. 20% of Heavy Shoppers and 18% of Light Shoppers expect their financial situation to become better in the month to come.
Norwegian online shoppers’ worries have decreased continuously since end of March. Worries about personal health have decreased the most, from 35% at the second half of March to 21% by mid-June. In that same period, worries about the personal financial situation also decreased, from 35% to 25%.
In contrast to consumers in Germany and The Netherlands, we can conclude that the overall level of worry among Norwegian consumers is significantly lower. Norwegians are more worried from a financial perspective rather than from a health perspective, which is the opposite when compared to Dutch and German consumers.
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 Norway is largely driven by consumers shifting purchases from brick-and-mortar stores to online channels. 17% of Norwegian 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. But in light of this, and as noted above, the projections of Norwegian consumers is to decrease both overall- and online purchases going into July.
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), followed by Germany and Norway.
In the first phase of Norway e-commerce development, we saw a rapid increase in e-commerce purchases up until the second half of April, with e-commerce up +32% compared to pre-corona times. In the second phase, going into the second half of May, growth halted and a plateau was reached at +23% growth. And during the 1st half of June, growth dampened and has now seemed to recover at +23% growth since the corona outbreak.
We see interesting developments in the motivations to purchase online over time. In Norway, finding cheaper prices online has become increasingly more important over time, along with the fact that online shopping offers more convenience. Norwegian consumers also motivate e-commerce purchases with saying that it is easier to find what they need online. 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, German and Norwegian e-commerce at the end of July.