The latest information on e-commerce trends in Europe. An important consideration for fitness sector businesses evaluating a push into digital transformation.

1. E-commerce in Europe
2016

2. 2 | E-commerce in Europe 2016
E-commerce in Europe 2016
Following the success of our E-commerce in Europe 2015 study last year, Twenga Solutions
has analysed the latest online retail trends to anticipate what e-retailers can expect from
the industry in 2016. What do European consumers buy? Who are the top European
retailers? What are some of the challenges retailers face? We reveal all…
Contents
1. An overview of e-commerce in Europe
1.1 Great online potential for the European market
1.2 Continual and regular growth in Europe
1.3 Top European e-retailers
1.4 The effect of online on bricks and mortar
2. Online retailers and their e-commerce strategies
2.1 The omnichannel experience in Europe
2.2 Multi-channel strategies in Europe
2.3 Europe and cross-border trade
3. Consumer behaviour and expectations per European market
3.1 What are Europeans buying online?
3.2 Delivery preferences in Europe
3.3 The importance of easy returns
3.4 Payment preferences in Europe
4. Online advertising and m-commerce in Europe
4.1 M-commerce in Europe
4.2 Online video – the advertising format of the future
4.3 Social media and e-commerce in Europe
4.4 Digital advertising spend per European market
4.5 Advertising channel distribution
5. Conclusion
5.1 What challenges are e-retailers to face in 2016?

3. 3 | E-commerce in Europe 2016
An overview of e-commerce in Europe
Great online potential for
the European market
With a population of over 821 million of which
73.5% use the Internet1
, the potential for e-
commerce in Europe is huge. What’s more,
these users are certainly fans of the online
shopping scene: it is estimated that nearly
two thirds made purchases over the Internet
in 2015, with clothes and sports-related
products being the most popular type of
goods and services².
Within Europe, we find that Internet use and
purchases online vary significantly amongst
the different countries. The United Kingdom
leads the way with 81% of individuals buying
online in 2015, followed by Denmark and
Luxembourg with 79% and 78% respectively.
In terms of Twenga’s main markets, Germany
and France come in 6th
and 10th
place with
73% and 65% of individuals shopping online.
Spain, Poland and Italy on the other hand
actually rank lower than the European
average of 53% with 42%, 37% and 26%
respectively.
0% 20% 40% 60% 80% 100%
United Kingdom
Denmark
Luxembourg
Norway
Germany
Netherlands
Finland
Sweden
France
Estonia
Austria
Belgium
Europe
Ireland
Malta
Slovakia
Czech Republic
Spain
Slovenia
Latvia
Poland
Hungary
Greece
Lithuania
Croatia
Portugal
Italy
Cyprus
Bulgaria
Turkey
Romania
Macedonia
81%
79%
78%
76%
73%
71%
71%
71%
65%
59%
58%
55%
53%
51%
51%
50%
45%
42%
39%
38%
37%
36%
32%
32%
31%
31%
26%
23%
18%
15%
11%
11%
Proportion of individuals who
purchased online within the last 12
months
Source: Eurostat

4. 4 | E-commerce in Europe 2016
Continual and regular growth in Europe
The online retail sector is the main driver of growth in European retailing. While e-
commerce growth rates hit 18.4% in 2014 and 18.6% in 2015, growth is not expected to
cease in the coming years with Retail Research predicting 16.7% growth in 2016 and 15.7%
in 2017³.
The UK, Germany and France dominate the online market in Europe: They do not only hold
the largest online share of retail trade in their respective markets, but are also together
responsible for 81.5% of European sales.
Online Share of Retail Trade
United Kingdom Germany France Europe
14%
10%
7% 7%
15%
12%
8%
8%
17%
14%
9% 9%
2014 2015 2016
Source: Retail research

5. 5 | E-commerce in Europe 2016
Top European e-retailers
As well as being responsible for a large majority of sales in Europe, 70% of the top 10
retailers with the most sales in Europe are also originate from these 3 mature markets,
while the remaining 3 are actually US-owned businesses. According to Internet Retailing’s
Top 500 2015⁴, the US-owned Amazon tops the list for the most online sales, followed by
German Otto Group and the UK giant, Tesco Stores. The fastest growing company in the
top 10 is Zalando SE, founded in Germany and present in 14 European countries, which saw
a 25.7% growth. However the honorary title for fastest growing company overall goes to
the Turkish clothing and accessories retailer Morhipo, whose sales increased by an
impressive 116.7% over a one-year period!
Top European e-commerce retailers (web sales)
Retailer Growth Country Category
20% US Mass Merchant
8.3% DE Apparel/Accessories
11.1% UK Mass Merchant
-2.2% US Office Supplies
7.9% US Computers/Electronics
5.3% UK Housewares
22.8% FR Mass Merchant
25.7% DE Apparel/Accessories
22.7% UK Food/Drug
9% UK Mass Merchant
Source : Internet Retailing

6. 6 | E-commerce in Europe 2016
The effect of online on bricks and mortar
Online sales growth is evidently having its effect on store-based retailers. Europe in
general saw a 1.4% decrease in sales for brick and mortar stores in 2015, and a similar
trend is expected in 2016 with the forecast of a 1.5% decrease.
Change in sales of brick and mortar retailers
2015
sales
2016
forecast
United Kingdom -2% -3.4%
Germany -1.8% -1.7%
France -1.7% -1.2%
Spain -0.6% 0.4%
Italy -1% 0.04%
Netherlands -1.4% 0.2%
Sweden -1.2% -0.4%
Poland -0.6% -1.1%
Europe -1.4% -1.5%
Source: Retail Research
The UK has been affected the most by online sales thus far, with a 2% decrease in 2015,
which is expected to reach -3.4% in 2016³.

7. 7 | E-commerce in Europe 2016
Online retailers and their e-commerce
strategies
The omnichannel experience in Europe
Despite a decrease in sales for physical
stores, it appears that e-retailers still
place a significant amount of importance
on them. According to a study by Pierre
Audoin Consultants⁵, European retailers
expect digital channels to become more
strategically important by 2020, but not
at the expense of the physical store.
According to Twenga’s Q2 Merchant
Survey, 40% of e-retailers in Europe have
a physical store⁶.
Providing an omnichannel experience is a
clear priority for European retailers and
with more and more sales now taking
place online, physical stores are taking a
on a role similar to a ‘showroom’. When
asked if their company has already or
planned on linking their online sales
channel to their store-based one in the
next 2 years (through click-and-collect or
in-store online shopping for example), a
huge 78% of European retailers replied
‘yes’.
Ninety percent of Spanish and 80% of
Dutch retailers have already linked their
online-to-store channels.
Multi-channel strategies in Europe
With consumers moving to alternative channels for their purchases, retailers are being
forced to adopt a multi-channel strategy. According to Twenga Solutions’ merchant survey,
29% of European retailers sell through 2 or 3 acquisition channels, while half are selling
through more than 3 channels⁷.
Number of customer acquisition channels per online retailer in Europe
50%
29%
21% More than 3 different acquisition channels
2-3 acquisition channels
Only 1 acquisition channel
Source: Twenga Solutions

8. 8 | E-commerce in Europe 2016
Europe and cross-border trade
Although 3 percentage points down from 2012, the large majority (88%) of purchases were
national in Europe in 2015. A growing trend on the other hand, is purchases from other EU
member states, which increased from 25% in 2012 to 30% in 2015. This can be an indicator
of the smooth functioning of the single market for e-commerce and the fact that retailers
are successfully providing a wider choice and lower prices, as demanded by the European
market.
Although less popular, purchases from countries outside of the EU are also on the rise,
increasing from 13% to 18%².
National and cross-border online purchases by EU shoppers
2012 vs. 2015
When purchasing within Europe, statistics from Postnord⁷ show that the UK, Germany and
the Nordics are the most popular markets to buy from.
National sellers Sellers from other EU
countries
Sellers from outside the
EU
91%
25%
13%
88%
30%
18%
2012
2015
Source: Eurostat

9. 9 | E-commerce in Europe 2016
Consumer behaviour and expectations
per European market
What are Europeans buying online?
The same study from Postnord⁷ also goes
into the different types of products
European consumers are buying online.
Due to their strong tradition of being sold
by mail order, clothing and footwear is
generally the most popular product
category, followed by home electronics
and books. The Italian market is the only
exception, where home electronics are on
the top of the list.
Of the markets in the study, the British
and Germans were those that bought
clothes and/or footwear online the most.
Delivery preferences in Europe
In terms of e-commerce deliveries, the Dutch have the highest expectations hoping to
receive their purchase within 1-2 days⁷. The Spanish market on the other hand proves to be
slightly more patient, with one in four willing to wait up to six working days. These
expectations are more than likely also linked to the standard delivery times established by
local postal services, which can vary significantly from country to country depending on
their organisation.
Proportion of respondents who expect deliveries in 1-2 days
Netherlands
Poland
United Kingdom
Germany
France
Spain
Italy
32%
20%
15%
14%
12%
12%
9%
Source: Postnord

10. 10 | E-commerce in Europe 2016
The importance of easy returns
Trouble-free returns are considered as an important factor for online shopping, however
the Spaniards and Italians rate this as the most important, despite returning purchases less
frequently than their European counterparts.
Germany, the Netherlands and the UK have the highest proportion of consumers who
returned an item in the past year.
Proportion of consumers who returned an item in the past year
Germany
Netherlands
United Kingdom
France
Spain
Italy
Poland
41%
36%
32%
24%
18%
13%
11%
Source: Postnord

11. 11 | E-commerce in Europe 2016
Payment preferences in Europe
While paying with a debit or credit card is a popular option in most of the markets, the
Germans would rather use PayPal or similar services and the Polish have a preference for
direct payments through their banks⁷ using services such as DotPay and PayU.
PayPal is the second most popular choice in the UK, France, the Netherlands, Spain and
Italy, while the second choice for Germans is to pay for their purchases by invoice in
arrears. Payment with cash on delivery (COD) is the second most popular choice for the
Polish, and the third most popular for the Spanish and Italian markets.
Source: Postnord

12. 12 | E-commerce in Europe 2016
Online advertising and m-commerce in
Europe
M-commerce in Europe
Besides consumer expectations regarding services, the way to reach new clients also varies
significantly per country. In our most recent m-commerce study, we studied the
importance of mobile and found that while 31.1% of e-commerce traffic is on mobile in the
UK, this rate stood at just 8.3% for Poland⁸.
Mobile traffic share per country
Furthermore, while the majority of countries in the study choose smartphones as their
preferred mobile device for online shopping, the Netherlands is the only country that
prefers to shop on tablet. With the reoccurring trend of larger screens over the past year,
we can expect smartphones to continue to be a device of choice for most European
consumers.
UK DE ES NL IT FR PL
31.1%
29.7% 29.1% 28.5%
27.8%
22.1%
8.3%
Source: Twenga Solutions

13. 13 | E-commerce in Europe 2016
Online video – the advertising format of the future
The rise of mobile is also facilitating the growth of more advanced formats such as online
video advertising. With mobile devices being the perfect size to view videos on-the-go and
social media platforms providing the necessary tools to both upload videos quickly and
effectively modify their size to different screens, we can expect this format to increase in
popularity in 2016. So much so that Carat⁹ predicts that online video will see a huge
growth of 34.7% in 2016, which will further increase by 31.2% in 2017.
Online video year-on-year % growth within digital
Social media and e-commerce in Europe
The number of active social media users is increasing year on year with current
penetration rates standing at 59% in the UK and 56% in the Netherlands¹⁰. It comes as no
surprise therefore, that social networks such as Facebook, Twitter, Instagram and
Pinterest are constantly looking for new ways to turn their sites and applications into true
e-commerce platforms.
The launch of buy buttons on Instagram and Pinterest as well as dedicated mobile shopping
platforms such as Canvas for Facebook, will only facilitate the move to social in 2016. In
fact, Carat predicts social media to experience a 29.8% global growth in 2016 and a further
25.5% growth in 2017⁸. However, some countries still have a fair way to go on this channel:
social media penetration stands at a comparably low 36% in both Poland and Germany.
Nonetheless, optimising sales on social media is the most important project to optimise for
European online retailers in 2016⁶.
Social media penetration
2015 2016 2017
+35%
+34.7%
+31.2%
Source: Carat
United Kingdom
Netherlands
France
Spain
Italy
Germany
Poland
59%
56%
50%
48%
47%
36%
36%
Source: We Are Social

14. 14 | E-commerce in Europe 2016
Digital advertising spend per European market
Social media is just one of the many platforms online retailers are choosing to advertise
their products on and the amount they are choosing to spend on such advertising is
increasing year on year. As a percentage of total media ad spending, Western Europe is
expected to increase its digital advertising spend from 31.6% in 2015 to 33.3% in 2016. A
similar trend is expected in Central and Eastern Europe, where digital ad spending is
expected to rise from 29.3% to 31.6%¹¹.
Of the different countries in Europe, the UK has the largest digital ad spend share at
49.6%, which is expected to increase to 51.9% in 2016.
Digital Ad Spending Share of Total Media Ad Spending
United Kingdom
Denmark
Norway
Netherlands
Sweden
Germany
Finland
France
Spain
Italy
49.6%
44.6%
42.6%
36.6%
33.3%
27.8%
25.6%
23.9%
21.8%
18%
51.9%
47%
45.6%
38.4%
34.8%
29%
27.6%
25%
22.6%
19.3%
2015 2016
Source: eMarketer

15. 15 | E-commerce in Europe 2016
Advertising channel distribution
According to Twenga’s Q1 online advertising study, SEM is the biggest online advertising
channel with a 57% share. What’s more, the average basket size for SEM retailers is 20%
higher than the overall average and 35% higher when compared with retailers using
Display⁶.
This trend is reflected in the rise of e-commerce solutions for Google Shopping and
services to optimise Google AdWords campaigns, both of which are significant platforms for
e-commerce digital advertising. Their rise in popularity is also apparent in terms of
consumer usage: the latest Digital Advertising Report from Adobe¹² shows that although
CPCs declined by 3% on Google between Q4 2014 and Q4 2015, CTR increased by 15% YoY,
indicating that consumers are responding to the ads they are seeing.
CPC & CTR growth YoY
Google remains the dominant search engine and the first choice for the vast majority of
users. This, along with improved click-through rates and decreasing CPCs makes Google’s
advertising solutions an evident choice for online retailers in 2016.
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
CPC CTR
Source: Adobe

16. 16 | E-commerce in Europe 2016
Conclusion
There is absolutely no doubt that Europe is a key market in terms of e-commerce. With
significant year-on-year growth, yet much potential still to come, online retailers should
not dismiss the opportunities Europe holds.
While France, Germany and the UK can be attractive markets due to their size and
success, emerging markets such as Spain and Poland should not be forgotten about, both of
which are expected to see significant sales growth in 2016, with 18.8% and 17.8% growth
respectively according to Retail Research³.
What challenges are e-retailers to face in 2016?
However, no matter the market all e-retailers are set to face a range of challenges in the
coming year. Twenga’s 2016 merchant survey recently revealed that European online
retailers consider customer acquisition, business profitability and competition with other
e-commerce sites as their top challenges⁶.
Main challenges as an online retailer
Acquiring customers
Profitability of my business
Competition with other e-commerce site
Brand visibility
Customer support
Technical development and problems on my site
Understanding my online performance with the right
reporting
Logistics
Difficult economic environment
27%
23%
13%
13%
7%
6%
5%
3%
2%
Source: Twenga Solutions

17. 17 | E-commerce in Europe 2016
In terms of customer acquisition in particular, Search Engine Marketing is the most popular
channel for acquisition, yet e-retailers are still faced with an array of issues. Bid
management, profitability and keyword management are the top 3 challenges in SEM⁶.
Main challenges in managing Search Marketing campaigns
Thankfully the rise of advanced technologies such as real-time bidding are set to tackle
such issues. What’s more, the power of SEM is also set to help tackle underlying issues such
as basket abandonment and repeat buyer rates.
Want to learn more about e-commerce in Europe? Check out our range of guides and
infographics to get a head start on this market!
Bidding at the right cost-per-click (CPC) level
Search campaigns are too expensive or not
profitable
Keyword management for search ads
Feed management: setting up and updating my
product feed for Google Shopping
Time spent on campaign management
Efficient reporting and performance analysis
I do not manage search marketing campaigns
myself
Writing and testing new ad creatives
User segmentation and targeting
18%
15%
12%
12%
11%
10%
9%
8%
7%
Source: Twenga Solutions

18. 18 | E-commerce in Europe 2016
Sources
¹ Internet World Stats: Usage and population statistics
² Eurostat: E-commerce statistics for individuals
³ Retail research: Online retailing in Briatain, Europe, US and Canada 2016
⁴ eCommerce News: Top 500 European e-retailers generated sales of €124 billion
⁵ PAC – Omnichannel retail in Europe
⁶ Twenga Solutions: Customer acquisition survey 2016
⁷ Postnord: E-commerce in Europe 2015
⁸ Twenga Solutions: M-commerce in Europe 2015
⁹ Carat: Ad Spend Report March 2016
¹⁰ We Are Social: 2016 Digital Yearbook
¹¹ eMarketer: How does global digital ad spending vary by region and industry?
¹² Adobe – Digital Advertising Report Q4 2015
About Twenga
Twenga Solutions commercialises advanced audience acquisition solutions on main online advertising
marketplaces, and in particular on AdWords and Google Shopping. These solutions drastically improve the
ROI of online retailers’ advertising budgets.
Established in 2006, Twenga Solutions employs over 150 people in France, Germany, England, Spain and
Italy and has over 4000 clients in 15 different countries.
Twenga Solutions is a Google AdWords Premier SMB Partner, facilitating retailers’ access to this key
advertising platform.