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Online retail penetration differs across Europe during Covid-19

Full report: The True Cost of Online Retail

Online retail penetration differs across Europe during Covid-19

3 minute read

Online retail sales in Europe hit record highs during lockdowns in 2020-21 as consumers embraced e-commerce options for the first time across many categories. Consumers also became increasingly dependent on other categories as Covid-19 measures 'forced' certain shopper bevaviours.

This is the second of five articles based on a wider piece of research on the true cost of the shift to online across Europe by Retail Economics and Alvarez and Marsal.

Across the six European countries analysed (U.K., Germany, France, Italy, Spain and Switzerland), just under a third (30.1%) of household expenditure is expected to permanently shift online as a result of Covid-19, a considerable uplift from 14.8% in 2020.

However, the migration towards online will not be uniform across each country due to differing market conditions such as online maturity, market competition, regulation, infrastructure, and many other factors.

Expected permanent shift towards online by country - Expected online penetration rate (%)

Shift towards online retail permanent by country - Retail Economics

Source: Retail Economics and Alvarez & Marsal


Our research showed that in markets such as Italy and Spain, where online penetration rates are relatively low and the online proposition less mature, consumers expect to see a greater permanent shift in their online spending. In part, this is likely to reflect consumers in these markets shopping online in some product categories for the first time. For example, our research showed that the proportion of consumers shopping online for the first time for Apparel, Homewares and Toys was highest in Spain compared with the other European markets we analysed.


[Continued below]

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This work forms part of a wider piece of research and is a downloadable in pdf format


In less mature online markets, the impact of Covid-19 has had a dramatic impact on shopping habits with the closure of shops necessitating a shift towards online. Exposed to new online customer journeys for a prolonged period of time has cemented many of these behaviours, presenting significant opportunities for those retailers that are well-positioned to capitalise on these trends

However, many factors will influence the future trajectory of online consumer adoption across different markets. Breadth of selection, competitive pricing, loyalty schemes and financing options are all important ingredients, but none are more important than delivery and returns.


The seismic shift to online has
been felt unevenly across categories,
with our research showing that Apparel
and Homewares experienced the
greatest change.


Online retail shopping consumer behaviour - Retail Economics


The shift towards online will also raise serious questions concerning the number, purpose and location of stores, and this is also something that varies significantly across European countries. Consumers across all European markets we researched suggested that they will visit stores less frequently than before the pandemic, the greatest declines are expected across the U.K., followed by Italy, Germany, France, Switzerland and Spain. While it is unclear how this will translate to actual footfall, the net balance of consumers looking to reduce store visits is concerning for retailers who have expansive store footprints.

Another key driver of e-commerce is Generation Z, but not always for the reasons you might assume. To find out about how emboldened young consumers are driving down profit margins as the shift to online continues, explore the next article in this series.



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Explore the next article in this series here

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Found this short article interesting?

This short insight article forms part of a thought leadership report entitled “The True Cost of Online”. It was produced by Retail Economics in partnership with Alvarez & Marsal and looks at the impact of Covid-19 across Europe and the accelerating shift to the online retail channel.

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