The online retail sector in Europe continues to grow steadily, with a high penetration rate in established markets and significant growth prospects in smaller economies. The UK, Germany, and France continue to have the highest e-commerce penetration rates, whereas online retail has been established for a long time. Although online retail usage varies throughout Europe, evolving trends increasingly encourage consumers to shop online. This shift is expected to play a significant role in the projected 49% growth of European e-commerce between 2024 and 2028.

Social media users increasing sales

The growing ‘social commerce’ market is an online retail trend that has established itself in recent years, largely thanks to the rapid growth in social media users. The introduction of shoppable links on social media platforms offers consumers an accessible way to shop online. Circumventing third-party websites, users can make purchases directly from the social media app or site. Notable apps include Shops through Meta, the enhancement of Snapchat’s social commerce features, and, most recently, the entry of TikTok’s shopping capabilities. Data from Statista shows the social commerce retail market grew by 23% year-on-year in 2024, and is forecast to have grown by a further 50% by 2028.

Price-conscious consumers heading for affordable commerce

The rise of affordable online marketplaces is also shaping how consumers shop. Although there are signs of improving consumer confidence, heightened price sensitivity resulting from the rising cost of living is enabling affordable platforms like Temu to capture a larger market share of online users. Consumers in search of competitive pricing are increasingly heading away from conventional retailers to look for significantly lower prices.

Consumer need for speed

Faster online delivery and brands offering same-day pick-up further fuel the consumer appetite to shop online. As demand for same-day and next-day delivery grows, retailers are exploring ways to satisfy consumers’ desire for speed, and optimising fulfilment and delivery is one way for brands to stay competitive. In-store pick-up offers convenience for shoppers and encourages further purchases when visiting physical stores.

In the grocery space, the introduction of supermarket same-day pick-up drives the growth of consumers purchasing provisions online. In 2024, Collect&Go, the online platform of Belgian retailer Colruyt Group, started a trial with same-day pick-up and deliveries for consumers using refrigerated lockers to retrieve products.

A strategic omnichannel approach

Though while current online retail trends are drawing more consumers to shop online, brands continue to strategically adapt to encourage visits to physical stores. Omnichannel integration and enhancing the in-store experience strengthen the appeal of physical shopping, and the shift into physical is now being driven by the increasing costs of online retail (both returns and online customer acquisition). The significant rebasing of rents in many European locations is also attractive to occupiers looking to acquire physical space, a driver in both prime high street and shopping centre locations. Physical retail stores are often more profitable and have the added benefit of the consumer experience.

Fashion retailer Zara has been enhancing the brand’s exposure in the physical space. In flagship stores, the brand has integrated the latest technology to allow consumers to interact online and in-store. This includes fitting room reservations made via the app and an option to collect purchases made online in-store after two hours. We expect brands will continue the drive to cement physical retail as a contender for consumers’ preferred sales channel.

Brands shifting from operating exclusively online into occupying physical space is another strategy used to increase consumer exposure. Initially an online-only brand, mattress company Emma is looking to accelerate its move to physical retail as part of its omnichannel approach, opening its first European stores in the UK and the Netherlands. In Spain, stationary brand Scrapbooking Kimidori opened its first physical store in 2023, and so did fashion brands Fick Company, San Saru and Moisés Nieto.

So, while we are seeing increasing trends that are driving the use of online retail, for brands to create the most exposure, an omnichannel strategy that incorporates both the digital and the physical is best placed to utilise consumer spending.

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