Dutch online retail sector performance exceeds expectations during COVID

According to Statistics Netherlands (CBS), retail internet sales were 55.6% higher in Q4 2020 compared to twelve months earlier. This is the strongest growth on record for CBS..

Pure internet businesses and webshops saw revenue increase by 44.5%, while online sales by multi-channel businesses experienced an even higher increase by 71.5% as droves of consumers with restriced access to brick and mortar stores shifted their purchasing power online.

The results reveal how versatile the retail sector is in the region – with many of the best performing segments dealing with the forced closure of shops in mid-December due to COVID-19, and a global hit to consumer confidence. Despite this, total retail sales were 4.5% higher in Q4 2020 than in the same period of 2019.

However, not all segments reported strong growth in 2020 compared to 2019. For instance, clothing shops experienced a -19.6% drop (down from -0.3% in 2019), shoes and leather goods sellers had a similar decrease by -18.4% (down from -0.9% in 2019) – with demand hampered by consumers confined to their homes, and unwilling to spend on clothing outside of the growing range of loungeware options. Those that did see a revenue increase were DIY, kitchens, and floorings, up by 19.5% compared to 6.9% in 2019 – fuelled by a home improvements plurge from those under lockdown. Electronic goods, too, showed growth of 8.5% (2% in 2019), alongside furniture and home furnishings, reporting growth of 7.7% compared to 7.1% in 2019. Supermarkets experienced a 7.1% growth compared to 1.7% in 2019.

For the whole of 2020, online trade enjoyed revenue growth of 43%, much more than in 2019. Overall, the retail trade realized a revenue increase of 5.9% for 2020 while growing 4% in volume.

Despite a positive performance for many segments within (online) retail, Dutch consumers continue to show pessimism about the current economic climate due to the Rutte government's resignation in January 2021 (amidst the child welfare fraud scandal) and the ongoing implications of COVID-19.

Nonetheless, according to PAC's CxO Survey 2020 for the Netherlands (will be published soon), Dutch retail businesses continue to invest and place digital transformation and modernization topics on their IT agendas for the next two years. 41% of retail companies are particularly interested in SaaS, while for another 30% testing capabilities will increase in importance. In addition, for 49% of Dutch retailers, analytics and data management (incl. big data and BI) are important topics on their IT agenda. These topics will optimize the overall CX experience for consumers as 60% of retailers see digital CX's improvement as a major goal for their current transformation agenda.