The European home shopping market will be worth an estimated €74.3Bn in 2006, compared to about €68.2Bn just 2 years ago. Three countries dominate the market: the UK, Germany and France, although some of the fastest growth rates are occurring in Eastern Europe. The industry has undergone profound change over the last ten years as the effects of internet penetration have swept through Europe, leading to changes in demand, supply and the industry actors.
In value terms, mail order catalogues still dominate the sector, accounting for two-thirds (65%) of the market, although pure mail order appears to be in long term decline. The traditional “big book” of the 1,000 page catalogue, aimed mainly at the rural population and including all imaginable household items together with basic-fashion clothes, is slowly but inevitably losing market share. In 2003, the European mail order catalogue market was worth some €43.5Bn, equivalent to 3% of total retail sales. Although the mail order catalogue sector is forecast to grow to €45.5Bn by 2009, the catalogue market is expected to decline to just 2% of European retail sales.
These trends are amplified in the leading markets. In the UK, catalogue shopping dropped from 53% to 25% of the home shopping market between 2000 and 2004, as catalogues were replaced by on-line sales, which grew from 9% to 32% over the same time period. In France, catalogues sent through the post represented 58.2% of distance selling in France in 1996. Today, catalogues sent through the post make up 25%, while on-line sales account for 51%.
In the three dominant markets, three out of four (73%) consumers now shop from home, using catalogue, internet or from a direct seller. This compares to one in 2 in France, 67% of British adults and 72% if German adults in 2005. The prime users are the 18-24 age group, where on-line shopping penetration reaches 85%. The increase can be attributed as a result of the progress of the internet and to some extent also interactive TV shopping.
On-line commerce has seen three trends over the last decade. Pure players were the first to take to the web, notably in hi tech sectors like computers. The traditional catalogue companies joined later, reaching their clients through multi-channels. Specialist stores set up own e-commerce sites more recently, following client demand. The present trend is for sector consolidation as evident in the recent partnering and acquisitions, notably of pure players bought by catalogue companies and traditional stores.
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