eCommerce: Online vs. Offline Sales

Online Shopping vs. In-Store Shopping in Europe:
Key Insights

• Market Growth:

  The online retail market in Europe has seen substantial growth since 2017, and forecasts predict a steady and optimistic future. This trend is particularly strong in major markets such as the United Kingdom, Germany, and France, despite temporary setbacks during the pandemic.

• Shopping Habits:

  Despite a growing interest in online shopping, physical stores maintain a dominant presence in shopping frequency throughout key European markets.

• Pandemic Shift:

  The COVID-19 pandemic dramatically hastened the shift from offline to online shopping in the UK and Germany, especially in sectors like clothing, food and drink delivery, and hygiene products.

• Consumer Preferences:

  While German consumers are increasingly turning to online platforms for items like fashion and electronics, everyday essentials, classified as fast-moving consumer goods (FMCG), continue to be predominantly purchased through offline channels.

The rise of eCommerce in Europe, particularly in the realm of buying physical goods, is unmistakable. The online distribution channel, which pertains to acquiring physical items through online retail – whether via a desktop PC, tablet, or smartphone – has seen a remarkable uptrend.

Conversely, offline channels, representing purchases made in brick-and-mortar stores, through telesales, or traditional mail orders such as print catalogs, has experienced a decline.

Are Europeans shopping online or in stores? We've looked at the numbers to see where people are spending their money.

Online Retail vs. Offline Retail: Europe Analysis

As per our numbers, online share of retail sales in Europe stood at 12% back in 2017. Making almost one percent jump, this share was 12.9% by 2019.

A particularly significant surge was noted between 2019 and 2020 when online figures leaped to 16.6%. Although there was a momentary dip from 2021’s 17.4% to 15.2% in 2022, this figured stayed about the same last year at 15.3%.

The future looks promising for European eCommerce, as online retail’s share is not expected to go below pre-pandemic levels. Forecasts up until 2028 indicate consistent growth in online sales, with projections suggesting an increase to an impressive 20.4% by 2028.

Looking into the top markets in the European eCommerce market provide an even deeper insight into this transformative shift.

Online Shopping vs. In-Store Shopping in Europe: Top 3 eCommerce Markets 

Top 3 eCommerce markets of Europe are the United Kingdom, Germany and France, which doesn’t come as much of a surprise since these countries also have the highest Gross Domestic Product (GDP) of the continent.

Our numbers provide a snapshot of Europe's top eCommerce markets, where the UK led the way for online shopping in 2019, with online channels accounting for almost a quarter of the retail market in the country. Germany and France followed suit, registering online shopping rates of 11% and 10% respectively.

With the pandemic, the landscape shifted significantly. From 2020, all three markets saw a large increase in the share of online retail: By 2021, the UK was at 28%, while Germany was at 18% and France at 17%. Despite the overall decline in online retail share for all these countries in 2022, the balance is expected to remain fairly even by the end of this year.

Consumer Preference Leans Towards
Online Shopping 

In early 2023, a worldwide survey by Klarna gauged consumer preferences for online versus in-store shopping. For context, it’s worth mentioning that the unspecified percentages in these figures indicate consumers with a neutral preference.

The UK's results showed 35% leaning towards online and 26% for in-store. While Germany had 33% preferring online shopping and 25% in-store, 32% of consumers in France favored in-store shopping, slightly surpassing the 31% that preferred online.

Offline Shopping Leads in Shopping Frequency 

The distinction between shopping preference and actual frequency offers a comprehensive understanding of the retail landscape. By considering shopping frequency, the aforementioned Klarna study reveals that despite a rise in online shopping interest, physical stores remain dominant in Europe, with consumers visiting them regularly. 

In the UK, 51% of consumers turn to online shopping weekly, while 76% patronize offline outlets. Similarly, in Germany, 45% venture online for their purchases each week, while a robust 82% opt for physical stores. France demonstrates a weekly online shopping trend of 32%, with its offline counterpart at 72%.

Online vs. Offline Retail: Pandemic’s Impact 

The COVID-19 pandemic irrevocably altered the world in numerous ways, including reshaping consumer buying patterns. In Germany, according to Statista's report COVID-19 Barometer 2020 on purchasing behavior during the COVID-19 pandemic, the category that saw the highest percentage of respondents shifting from offline to online purchases in this period was "Clothing" with 25%. 

This was followed by "Restaurant delivery/takeaway" and "Health products (e.g. medicine)" both garnering significant attention with 16% and 15% respectively. Notably, almost half (47%) of respondents in Germany stated that they did not shift from offline to online purchases for any products or services.

As the same report reveals, in the United Kingdom, the most pronounced change in purchasing behavior was seen in "Food and drink delivery (e.g. from supermarket)", with a staggering 30% of respondents opting to purchase online instead of offline due to the pandemic. 

"Hygiene products (e.g. hand sanitizer, toilet paper)" was another major category where the UK saw a significant online shift, recording 21%. The "Clothing" category closely followed with 24%. Additionally, about a third (35%) of respondents in the UK reported no change in their purchasing behavior from offline to online for any products or services. 

When comparing the responses between the two countries, the most striking difference is seen in "Food and drink delivery (e.g. from supermarket)" with the UK leading at 30% compared to Germany's 10%.

Additionally, "Hygiene products (e.g. hand sanitizer, toilet paper)" saw an 8% difference with the UK again surpassing Germany, 21% to 13%. Another noticeable disparity was in the "Household cleaning products" category with the UK at 17% and Germany at 9%.

German Retail: FMCG Still Strong in
Offline Channels

As we drill down into specific product categories, we find that not all items are created equal in the online and offline realms.

As per a survey published by HDE (Handelsverband Deutschland) in 2021, the distribution of industries in online and offline retail volume in Germany highlighted notable disparities across various product categories.

When examining online sales channels, we see that Fashion & Accessories (23.6%) and Electronics (22.3%) dominated the landscape, suggesting a robust inclination among German consumers to purchase these items digitally. Free Time & Hobbies also held a relatively higher online share at 15.3%.

The Fast-Moving Consumer Goods (FMCG), which refers to consumer goods that are sold quickly and at relatively low cost, category made up 41.3% of offline retail volume. This indicates that, while Germans use digital channels for certain products, daily goods are primarily bought from physical stores.  

Categories like Home & Furnishing (9.4% online) and Health & Wellness (6.3% online) also exhibited significant online traction, but the stark contrast between FMCG's online and offline share stands out, as the category makes up only 12.1% of online retail in Germany. 

Upon closer inspection, it's evident that Electronics, Fashion & Accessories, Free Time & Hobbies, Home & Furnishing, Health & Wellness, Jewelry & Watches, and Office Supplies all have a higher share in online sales channels compared to their respective offline percentages.

Online Shopping vs. In-Store Shopping
in Europe: Closing Thoughts

As we look to the future, several questions remain open: How will emerging trends like voice search and mobile-first experiences further shape consumer preferences and the retail landscape? Will the integration of AI and other digital tools continue to blur the lines between online and physical stores, promoting a more seamless shopping experience? And importantly, how will economic factors like inflation influence online spending habits and consumer choices?

The ongoing evolution in shopping behaviors suggests a promising yet uncertain future for the retail sector, both online and offline. As companies adapt to these changes, factors such as consumer preference, technological advancements, and economic conditions will dictate the next phase of retail in Europe.

Sources: HDE (Handelsverband Deutschland), Klarna, Osservatori Digital Innovation, Statista, ECDB