Peak retail season is here. In the US, it seems to start in early November these days and runs until the middle of January. For many (if not all) retailers, this peak season is the most important time of the year. It sets the tone for the next 12 months of trading. A poor performance during this period does not bode well for any retailer who wants to make it through what is predicted to be a challenging year in 2024.
Widespread Adoption but Mixed Feelings
Retailers have marked their calendars with the important dates in the US retail calendar…but what about the EU?
It’s been over a decade since Amazon introduced the idea of Black Friday to European shores. In the last year, its popularity has reached new heights as the cost-of-living crisis and double-digital inflation sets in across the region. Consumers are looking to make savings wherever possible. In fact, according to some outlets, 56% of German consumers in 2022 said their financial position had worsened and they were actually reliant on Black Friday discounts for Christmas shopping. (Source)
While there is widespread adoption of Black Friday and Cyber Monday, these two dates divide opinion in European retail professional circles. Those in favour argue that carefully planned promotions in tandem with close supplier relationships, can boost sales and maintain profit margins for retailers. On the opposite side, some say that the discounts erode Christmas sales with reduced profits and undermine a consumers’ willingness to pay full price before the holiday dates… driving a lull in sales before the two shopping dates.
Regardless of what side of the fence you are on, Black Friday and Cyber Monday deals are very much expected by consumers, so it’s worth paying attention to your EU and UK markets. This definitely benefits US retailers operating in the EU as online shopping is growing. As a result, it is predicted that the gap between in-person and online sales will narrow. This would benefit many retailers who can provide a more integrated (and seamless) experience for customers, regardless of where they are located.
Ready, Set (the dates), go!
November 24th – Black Friday: The day after Thanksgiving has seen bustling trade in the US since the 1950s. Thanks to Amazon, it’s now a worldwide phenomenon, with online shoppers spending over $40billion worldwide on Black Friday 2022. The total for the UK reached a staggering £8.71 billion. (Source) Black Friday has become a shopping holiday across the EU. In France, for example, the male population is capitalising on the ease of online shopping with more than half (53%) planning to shop exclusively online during Black Friday – their female counterparts were slightly behind at 44%. (Source)
November 27th – Cyber Monday: Originally conceived as a PR stunt, Cyber Monday is now one of the busiest days of the year in eCommerce (just behind Black Friday). While important, it does appear that Black Friday still proves to be a winning date for European markets.
December 25th – Christmas Day: For many, Christmas is no longer the traditional day of rest that it once was. Many people take time on Christmas Day to plan their January sales shopping strategy. Mobile shopping has grown in popularity and retailers have started Boxing Day / January sales early online, starting on Christmas Day, making it a key online shopping day in its own right.
December 26th – Boxing Day / January Sales kickoff: The traditional start of post-Christmas sales on the high street is now being eroded by the Christmas Day trends described above. Still, Boxing Day (as it is referred to in the UK), remains a busy time for retailers both online and offline.
January Returns
It’s tempting to think that peak season ends in early January. But online habits have changed traditional retail models. Whether this will benefit a new entrant to the market or not, remains to be seen, but if you are prepared, that’s half the battle.
While much of Europe is well used to online shopping, there is still a tendency to “buy and try” before returning items or deciding to keep them. It’s a hark back to the bricks and mortar shopping experience. This approach does place some pressure on fulfilment centres and retailers and something to bear in mind come January. Ensuring you have an effective fulfilment partner is paramount in this scenario.
According to Google (source), global search interest in “shipping policy” peaked in early December 2022, almost twice the search amount as the same period in 2021. Ensuring your returns process is as efficient as your shipping process could be key to securing return customers.
Black Friday in the EU
Despite the expected doom and gloom predicted by some in advance of last years’ dates, retail returned. “The US ended up spending a whopping $9.12 billion over a twenty-four-hour period on Black Friday 2022. That is an increase of 2.3% from the high mark of $9.03 billion in 2020. Retailers in Europe saw an increase in sales of 14.5% compared to the same period in 2020.” Adobe Analytics also highlighted the most popular items with smart home electronics, exercise equipment, audio equipment and toys remaining firm favourites amongst buyers, each registering a rise of 200% in sales compared to last year. (Source)
The table below provides recent eCommerce totals and market shares for six major Western European countries. The results are dominated by total online sales in the UK, Germany and France. These three made up 77.8% of major Western European eCommerce in 2022 (£256m). Britain had the largest online retail sector. German eCommerce grew from a share in 2019 of 14.2% to 19.6% in 2022, and France’s from 9.7% to 14.9% over the same period. Special mention should be made of The Netherlands, whose online market share rose from 15.3% in 2019 to 19.2%. A large proportion of Dutch online retailing and e-shopping involves cross-border sales so the figures may be less accurate than for the other countries.
Table 1: Total Online Retail Sales 2019-2022
Currency values are Sterling (£) billions
| 2019 | 2022 | Share of Online Sales 2019 | Share of Online Sales 2021 | ||
| UK | £75.478 | £106.010 | 19.2% | 26.5% | |
| France | £41.607 | £59.697 | 9.7% | 14.9% | |
| Germany | £61.031 | £90.337 | 14.2% | 19.6% | |
| Spain | £20.353 | £27.782 | 7.8% | 10.4% | |
| Italy | £16.318 | £24.911 | 5.9% | 10.2% | |
| Netherlands | £13.872 | £22.400 | 15.3% | 19.2% | |
| Totals | £228.660 | £328.909 | 12.0% | 16.8% |
[Source: estimates by CRR]
The move away from brick and mortar stores towards online shopping is best articulated by the Centre for Retail Research, a UK based retail think tank. “At the beginning of the 2010s, Spain and Italy had only a very basic online retail sector, but by 2022 online was responsible for 10%-plus of the sales of their retail industries. In the UK, online market share shot up from 10.6% (2012) to 26.5% (2022).“ Britain was listed as having the largest online retail sector but it is interesting to note the trend in Germany.
German eCommerce grew from a share in 2019 of 14.2% to 19.6% in 2022, and France’s from 9.7% to 14.9% over the same period.
Online and Discount Holidays set to continue…
While figures may differ depending on the source, the trends are all the same. The clear pattern points to a gradual increase in online purchases in Europe for the time being. This is despite the economic and geographical challenges that exist.
For those entering the market, particularly from the US, the enthusiasm of European and UK consumers shows no signs of slowing down.
Focus on Growth
The States will invariably lead the pack when it comes to retail trends globally. However, when entering a new market, it can be challenging to keep the various plates spinning (growth, compliance, customer loyalty etc). We believe every ambitious retail organisation needs a partner who can manage all the compliance matters. These are often complicated, time consuming and plain well distracting.
While you focus on growth, let us focus on the “other” things!
Taxmatic automates VAT calculations, filings, and payments for eCommerce retailers selling in EU and UK markets. It integrates seamlessly with eCommerce selling platforms to access sales order data in real time. The process includes secure payments wallet technology to complete sales tax remittance and manage refunds. Our customers have the peace of mind that comes from full regulatory compliance. Plus, the benefits of eliminating manual processes. Gaining more time to expand their online business in new international markets.
