Although cars don’t fly, as Marty McFly predicted in the film ‘Back to the Future’, it’s true that there are already prototypes. It cannot be denied that we live in a digitalized world. New technologies leave behind their previous models in just a few months, and we can connect to the internet through any device choosing from the vast range that we have available. We don’t have holograms but we have tablets and computers which can project them. Young children today are born knowing how to use a tablet or a smartphone in a completely intuitive way, and they can develop the capability to multitask whereas past generations haven’t known how to. A shop or store can sell as much or as little as they want but without internet, they wouldn’t exist. The world that we live in today has taken the step into commercial electronics (also known as ecommerce) and online sales. There are more and more companies who are deciding to operate digitally, and Cosme Bergareche one of the founders of Pompeii in the conference he gave at the Carlos III University, told us how “It’s incredible that even though I’m sleeping at home, I’m still selling shoes online”. Online sales have opened the doors to millions of opportunities and have given any company, no matter of the size, the opportunity to go global or international. In Spain, we spend an average of 400 minutes a day looking at a screen (see figure 1). What company is capable of being sustainable in today’s world without being present on the internet?
Figura 1: Report – Internet Trends 2015
How has e-commerce developed in Europe?
It is therefore impossible to imagine a world without e-commerce. Even more so when it contributes to almost 2.5% of the GDP of the whole of Europe (estimated at 17.3 billion euros). A percentage that according to E-commerce Europe, is estimated to double in 2016, and triple by 2020.
To explain in further detail, Europe has around 715,000 businesses which are active online providing work, both directly and indirectly to around 2.5 million people. In terms of buyers, thanks to the high penetration of internet (70% of the population), it is estimated that 32% are e-consumers (online buyers) who spend an average of around 1,300 euros per year.
Despite being considered a mature market, E-commerce in European continues at a growing pace. When compared with the rest of the market leaders, last year e-commerce in Europe grew by 14%, underneath the Asian Pacific who grew by 44%, but above North America who grew by just 12% (Ecommerce Europe). The force behind this recent growth corresponds to the huge adoption of mobile technology, and the introduction of big data to business.
As we have seen, the world of e-commerce is a vast one, and therefore to shorten our study, we are going to focus on the most sold product category in European E-commerce – textiles.
Figure 2; The most sold product categories of e-commerce in Europe.
The demand for textile products is higher in countries such as Germany (54% of the population) and the UK (53%) ahead of Italy (18%) and Spain (27%) who are the countries who buy the least textiles online (postnord, ecommerce 2014). Now moving to categories within the textile industry, the most common purchases are items of clothing (67.3%) followed by footwear (23.5%) and finally underwear (9.2%) (Ecommerce Europe 2014)
Who are the consumers for this type of commerce?
According to research from the National Institute of Statistics (INE), it is women who mostly use the internet for their purchases. Approximately 55% of online purchases are made by women, in favour of men for using their mobile or tablet when buying, instead of a personal computer. In terms of the each of the buyers, figures from INE state that in 2013 more than half of online buyers were aged between 25 and 44 years of age, young people between 16 and 24 represent 14.6% and people over the age of 55 represent less than 10%.
Why do consumers choose to buy online?
Some consumers prefer to go to physical stores where they can actually see the products, but we are going to focus on the reasons why people choose to make their purchases using technology. According to many online studies, the three main reasons for using e-commerce are: convenience (78%), price (73.2%) and to save time (65.5%). It’s important to notice that the ease of purchase represents 55.6% and only 14% responded ‘to try’.
How does e-commerce complement the offline channel?
Little by little we are noticing more and more tendencies and advances within this sector. Nowadays, it’s common to see consumers initiating the shopping process instore and later completing it online. This type of purchase is known as ‘showrooming’ and it’s popular amongst opportunistic buyers who are searching for a ‘bargain’.
But still, the consumer prefers the physical stores to online shopping. The frequent shopper does a price search, finds an offer, compares it to others and then decides between the options. Therefore in many cases e-commerce is not a competition, but instead complements the sales process and creates the possibility of brand positioning. The secret is to build a process which combines both e-commerce and physical stores. A big example is with the textile sector: not everyone wants to buy clothes based on a photograph, this is without taking into account the size, the texture of the fabric, or seeing the true colours.
It remains clear that today, no company can afford to miss out on an online presence, but we are one step closer to securing a future in e-commerce. It can in no way be said that it is something that will entirely substitute physical sales, but we must take into account the fact that online sales allow us the possibility to purchase any product, at any time, in any place. And of course, we must not forget digital marketing which, as a test to our statements, demands more and more professionals. On one hand, these professionals know how the digital world works (search engines, graphic advertisement, email and social media) and who are on the other hand constantly learning given that it is a field which changes and innovates at high speeds. In the words of Javier Celaya, author of the book ‘Business on the web 2.0’. “One year on the internet is equivalent to 10 years in the analogue world”.