E-commerce in Europe is in an interesting state. It is both in its heyday and on a trajectory to flourish and grow well into the next decade while at the same time being challenged by hostile economic conditions, unusual competitive forces and regulation.
Other factors, such as sustainability and green policies are putting it at odds with itself.
The European E-Commerce Report 2024, authored by Dr Jesse Weltevreden, professor of Digital Commerce, Amsterdam University of Applied Sciences (AUAS) highlights the growth, declines, setbacks and opportunities in a fast-evolving and resilient sector.
While the total B2C European E-commerce turnover grew a modest 3%, from €864 billion to €887 billion since 2023, the overall growth rate was down 3% YOY due to these adverse conditions.
The research reveals interesting yet stark differences between adoption of technologies, particularly in the use and application of AI, which for some is still a distantly conceptual tool that will automate some back office processes, whereas others are using it at the vanguard of retail propositions, pushing the boundaries of virtual marketing and personalised shopping.
The latter brings the concept of a personal shopper right into the future. And indeed, fashion e-tail is where much innovation is taking place.
Back to basics
Returns are a hot item for ecommerce merchants all over Europe. The pressures for B2C merchants are largely divided between policies that are proving costly, and environmental and sustainability issues.
In terms of cost-cutting, popular free return policies open themselves up to abuse and carelessness, given that ‘withdrawal rights’ require any item bought remotely to be fully returnable, when a retailer may not otherwise offer a change-of-mind refund.
Darn consumer rights.
The cost of shipping and packaging in itself has increased to the point of businesses now commonly offering refunds without the need for returns, putting it somewhat into perspective.
AI is being used in some of the more progressive or advanced economies, such as Ireland, to optimise routes and there are novel and innovative return options being offered whereby returns can be sent directly to a new customer order.
And other businesses offer rental and repair options as well, in a bid towards slower, more sustainable fashion and a circular economy.
Sustainable Fashion and a Circular Economy
Lorraine Higgins, Founder, DBI (Digital Business Ireland), reels off several business successes including zero-waste and refill shops and the collective effort from a corporate level down to reduce waste and environmental footprints and promote sustainable consumption habits.
Industry awards go some way to supporting these efforts, as do fora and new influxes of corporate taxes.
Ireland and other countries (Germany, Bosnia Herzegovina) are also concentrating efforts on pre-sale activity to reduce likelihood of return by facilitating better purchase decisions through provision of virtual avatars, aiding a more accurate selection of fit and suitability of a garment.
Spain seems to suffer the most from high return rates, with 40% of online shoppers returning products, and over half of these coming from clothing, footwear and accessories sectors.
“The propensity to return products is much lower in other categories,” says Cesar Tello, Managing Director, Adigital.
Seems there is room for some virtual fitting rooms, and indeed augmented reality and virtual reality are gaining traction, he says, in fashion and home décor, allowing consumers to visualise products in a virtual environment before purchasing.
Spain is indeed a key market for the fashion and footwear industries, and on the sustainability front is making strides.
The report states studies that have shown that 45% of Spanish digital consumers would pay more for sustainable products, with six out of ten specifically willing to do so for eco-friendly items.
There is increased purchasing of second-hand products in fashion (as well as other sectors), driven by millennials, for example, the Zara Pre-Owned app by Inditex.
Payments Cards & Mobile Opinion
There must still be greater wins through ‘over-purchasing’ or a customer missing the return window, or, dare we say, being too lazy to return.
Otherwise surely we would have already seen a more strident move towards paid returns by now, or greater encouragement of in-store returns, which would also provide further sales opportunities.
What these challenges and developments do signal, however, is the value of in-person retailing- both from the merchant and consumer perspective.
Perhaps there is a public transport / high street shopping initiative in the offing somewhere down the line.
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