European brands think relying on marketplaces is not sustainable

More than half of the European brands think that relying on eCommerce market places isn’t sustainable and want to want to shift more to their own eCommerce channels, according to a joint study conducted by Accenture and GEODIS among 200 brands in various industries in the US and Europe.

The study revealed that pandemic has brought changes in where brands make sales. During the lockdown, online sales doubled while direct online sales quadrupled.

According to the study, 54% European brands think that their logistic is not efficient enough to support the increase in online sales. “So many brands use marketplaces as a one-stop-shop for selling their products. This allows them to reach a broad audience and compensate for a lack of resources and logistics infrastructure, while at the same time meeting the expected customer experience”, says Sohel Aziz, managing director of Accenture.

59% of the European brands and 46% US brands rely on online marketplaces to tackle the logistic issues. However, many brands believe that reliance on online marketplaces is not sustainable and they have to build their own eCommerce channels.

Black Friday set to be bigger than ever before

The shift to e-commerce, which was a result of the COVID-19 outbreak, is set to make Black Friday the biggest online event. Sales are expected to be up by 14%, according to PriceRunner. As a result, this could put a growing strain on an already stretched delivery network.

Nicklas Storåkers, CEO of PriceRunner, notes that their assessment is that the growth of sales will be bigger than ever. Given that the global pandemic has massively driven e-commerce penetration and growth. Nicklas Storåkers explains, “Ongoing advice from public authorities on exercising caution will affect consumers willingness to go out and take part in traditional shopping centre and Christmas shopping activities. I would not be shocked if online retailers report that Black Friday will be 50% larger this year compared to 2019.″

The move to online over the lockdown has already kick-started an online peak. Black Friday is set to reap that – making it a peak like no other previously encountered.

Mikael Lindahl, Head of Growth at PriceRunner, predicts a large growth in online sales this year. “We expect the total value of online and offline sales on Black Friday to be flat this year compared to last year,” he says. “This means that online sales will grow by 14% and offline fall by 12%. This is mainly driven by a weaker economy, higher unemployment rates and social restrictions causing lower consumption overall, with a higher concentration of online spending during the Black Friday week. This year it will be more important than ever to make savings on Christmas presents, household products and more, where the Black Friday sale is a good time to do just that.”

During lockdown in the UK, online retail sales surged with shops forced to close and people ordered to stay indoors. According to the Office for National Statistics (ONS), the total volume of retail sales in April fell by 18.1% in the UK while online sales grew by 30.7%.

As the COVID-19 outbreak continued, online spending increased by 33.4% in May. However, there were signs of slightly declining online sales from June and July as some shops and restaurants reopened. The strong growth means that the value of online retail sales was still 46.8% higher in August than in February.

“We have seen a shift in consumer habits as a result of the pandemic, with more people shopping online than ever before, including older generations buying products online for the very first time, causing a drop in visits to brick and mortar shops,” says Lindahl. “We believe this trend is here to stay and will continue far beyond the pandemic, as this has evolved and shaped our industry many years ahead of time.”