2020 was an unprecedented year for e-commerce. Growth went through the roof as consumers - often out of sheer necessity - turned to online channels more than ever before to make purchases. A lot happened online, and we tracked developments along the way. From a consumer behavior perspective, what are the biggest developments in e-commerce in 2020? How does that compare to consumers’ e-commerce behavior in 2019? What is the difference between ‘existing online shoppers’ – (consumers who already purchases online when 2020 started) - and ‘new online shoppers’ (consumers who started buying online in 2020)? Read on to find out!
In some of our previous blog posts about Dutch, German and Norwegian consumers’ shift to online, we show how e-commerce growth is driven by existing online shoppers switching purchases from brick-and-mortar stores to online channels, as well as new consumers entering online shopping.
From March (during the ‘first wave’) we see a dramatic growth in the share of consumers who make at least one bi-weekly online purchase. In the Netherlands, 64% of all consumers purchase online in March, this share grows to 80% by December – a growth by 16 percentage points and equivalent to a 25% growth rate of the online shopper base. In Germany, 69% of all consumers purchase online in March, growing to 83% by December – a growth of 14 percentage points and equivalent to a 20% growth rate of the online shopper base. Finally, in Norway, 55% of all consumers purchase online in March and this share grows to 74% by December – a growth by 19 percentage points and equivalent to a 35% growth rate of the online shopper base.
Our previous analytics already revealed that older consumers flocked to online channels the most: the e-commerce growth rate among Dutch, German and Norwegian consumers aged 45-64 is significantly higher than in the general population. But while significant, this development does not heavily impact overall e-commerce growth as older consumers’ purchase volumes are relatively low.
When looking at this ‘older segment’ and the differences between countries, we do not see big differences:
When we shift perspective to consumers who are already online shoppers when 2020 started (‘existing online shoppers’), we see interesting behavioral changes during the rest of the year. Overall, we see that existing online shoppers increase their online purchases during 2020; the share who state that they increase purchases is larger than the share who indicate that they started buying less online.
Visualized in the graph below are also the shoppers that purchased online on a weekly, monthly and quarterly basis during 2019 – and how these segments change their e-commerce behavior in 2020.
Of Dutch consumers who shop online on a quarterly basis (‘quarterly online shoppers’) during 2019, 40% shop online more in 2020; only 13% of these start shopping online less. In Germany, 28% of quarterly online shoppers in 2019 shop more and 11% buy less online in 2020. And among Norwegian quarterly online shoppers in 2019 the corresponding shares are 19% versus 16%, respectively.
In Germany, even the most frequent online shoppers (‘weekly online shoppers’) increase online purchases: 33% increase purchases during 2020. Among Dutch weekly online shoppers in 2019, the share who increase online purchases is about the same as the share that bought online less. And in Norway, weekly online shoppers in 2019 mostly decreased their online purchases in 2020.
Existing online shoppers increase e-commerce purchases quite early on in 2020, during the ‘first wave’ that spread through Europe – around March/April (Q1/Q2). The majority of new online shoppers (shoppers who start shopping online in 2020) discover the benefits of online shopping later in 2020; it is not until October/November (Q4) that this segment starts shifting purchases to online channels. It is likely that Peak Season sales (like Singles’ Day, Black Friday and Cyber Monday) combined with tighter restrictions trigger offline-loyal consumers to finally change their shopping behavior. The difference can be explained by the fact that consumers more easily change existing behavior than switch to new behaviors.
Deep-diving into the drivers of existing online shoppers starting to buy more, and new online shoppers’ motivation to start buying online, we see that the forces driving these two segments are fairly similar – but with large differences between the Netherlands, Germany and Norway
In Germany, 48% of existing online shoppers who increase online purchases during 2020 and 46% of new online shoppers in 2020 claim that they were ‘physically pushed to online’, due to being stuck at home more than usual and that shops were closed. These shares are similar to what we see in the Netherlands (53% and 56%, respectively). But in Norway, consumers’ online shopping behavior is less driven by the ‘physical push' to online as 34% of existing and 38% of new online shoppers indicate this motivation.
A second diver to increase/start shopping online is the ‘psychological push to online’: these consumers indicate that they have concerns about their health and that they feel more safe by making a purchase online. About 20-25% of consumers are driven by this motivation, regardless of being existing or new online shoppers.
Important drivers for increasing online purchases in 2020 are the advantages that online offers compared to brick-and-mortar stores: online is just more convenient, it offers better prices and a wider range of products.
Norwegian consumers claim this aspect the most: it drives 37% of existing and 45% of new online shoppers to buy more. In Germany, 32-33% of consumers who increase/started shopping online motivate their behavior by this driver. And among Dutch consumers the share is lowest at 21% for existing and 26% for new online shoppers, respectively.
Although the share of consumers who buy less online in 2020 is relatively small, the motivations for their online shopping behavior are still relevant. Among the key motivations we see a clear divider here:
Our next blog post will dive deeper into the most important e-commerce developments of 2020, looking at product categories and specifically at Fashion. Stay tuned!