Feature

Europe set for e-retail binge

Forrester report predicts online trade will make up 7% of all retail sales within five years

Consumer use of the Internet will jump from 2.9 billion euros in 1999 to 174 billion in 2005, grabbing a 7% share of all retail sales by then.

Last month Forrester Research issued a report, Retail's Pan-European Future, which forecast that online purchases of goods, event tickets and leisure travel will grow at 98% annually.

According to the research company, four factors will drive the growth in online purchases.

  • Growth in the number of Internet enabled PCs being used in the home, which will be driven by low cost PC deals and free Internet service providers (ISP) like NTL and Alta Vista.

  • Traditional retailers such as Marks & Spencer and El Corte Ingles (Spain) will catch up with Internet competitors by launching full-featured sites of their own.

  • More expensive "big ticket" commodities will become available on the Internet - driving up the average annual expenditure per Internet shopper from 555 euros in 2000 to 1,806 euros in 2005.

  • New interactive devices such as wireless application protocol phones(Wap) and interactive digital TV.

    Forrester said that the four biggest retail sectors in Europe - grocery, clothing, leisure travel and car sales, would hit their stride online, lowering the share of online sales held by products like software, books, music and videos.

    Northern Europe will narrow the gap with the US for the percentage of online spending done on the Internet. Sweden, Germany and the UK will close the gap completely, leading the US in some categories like groceries in the UK.

    European Online Retail projections by category

      1999 2000 2001 2002 2003 2004 2005 2005 as % of total retail
    TOTAL EUROPEAN REVENUE 2,875 8,543 19,186 40,154 74,848 122,560 174,291 7%
    Total convenience buys 1,001 2,560 5,334 10,395 18,526 30,045 43,861 8%
    Media 703 1,340 2,618 4,514 6,595 8,426 9,853 18%
    Software 156 296 542 851 1,142 1,397 1,617 39%
    Books 387 690 1,314 2,240 3,271 4,229 5,004 15%
    Music 139 313 677 1,273 1,958 2,515 2,898 20%
    Videos 21 42 84 149 224 288 335 13%
    Event tickets 48 150 376 872 1,723 2,768 3,759 11%
    Apparel 141 783 1,686 3,610 7,536 14,424 23,886 7%
    General apparel 115 690 1,476 3,133 6,451 12,077 19,363 8%
    Footware 12 39 80 163 328 647 1,211 2%
    Accessories 14 54 129 315 756 1,700 3,311 7%
    Flowers 39 110 247 510 915 1,394 1,844 12%
    Recreation 70 176 407 889 1,758 3,034 4,519 7%
    Toys 31 72 175 405 843 1,471 2,119 9%
    Sports equipment 12 32 72 149 284 490 753 8%
    Garden/DIY 1636 77 163 324 600 1,004 4%  
    Travel goods 12 36 83 172 307 473 644 8%
    TOTAL RESEARCHED BUYS 1,706 4,515 10,079 20,452 36,328 56,041 75,373 8%
    Leisure travel 993 2,723 6,231 12,738 22,094 32,239 40,910 9%
    Electronics 642 1,314 2,645 4,74 7,294 9,986 12,310 18%
    Computer hardware 529 1,040 2,075 3,604 5,313 6,934 8,218 36%
    Consumer electronics 114 274 570 1,120 1,981 3,052 4,092 9%
    Housewares 49 254 641 1,596 3,677 7,226 11,546 6%
    Appliances 16 67 198 561 1,409 2,859 4,497 8%
    Household goods 19 93 230 553 1,226 2,313 3,561 6%
    Furniture 13 94 213 482 1,042 2,054 3,488 4%
    Autos 18 204 516 1,290 3,047 6,179 9,939 5%
    Misc 4 20 47 104 217 411 668 6%
    TOTAL REPLENISHMENT BUYS 168 1,468 3,773 9,307 19,994 36,474 55,057 5%
    Groceries 151 1,346 3,463 8,516 18,051 32,214 47,172 4%
    Food and beverage 140 1,190 3,024 7,347 15,429 27,607 40,649 4%
    Other groceries 11 156 439 1,169 2,623 4,607 6,523 4%
    Health and beauty 8 62 146 355 889 2,214 4,776 7%
    Misc 9 60 163 435 1,053 2,046 1,109 8%

    Some columns do not add up due to rounding.

    All revenues are in millions of euros


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    This was first published in May 2000

     

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