United Kingdom B2C E-commerce Report 2016
Facts, Figures, Infographic & Trends of 2015 and the 2016 Forecast of the British B2C E-commerce Market of Goods and Services
Country report Country report Executed by: commissioned by: powered by: Table of Contents
OUR REPORT PARTNERS page 3-4 Expert Opinion About-Payments page 22 PREFACE page 5 Internet Browsers and Operating Systems page 23 UNITED KINGDOM page 6-30 Social Media Usage page 24 Infographic United Kingdom page 6 General Tips and Tricks page 25 Demographic Indicators page 7 Tips for Online Merchants page 26 Gross Domestic Product page 8 Legal Tips and Tricks page 27-28 Economic Indicators page 9 Important Holidays page 29 Benchmark on Economic Indicators page 10 Opportunities and Threats page 30 Relevant Index Rankings page 11 ABOUT ECOMMERCE FOUNDATION page 31-44 Expert Opinion Asendia page 12 Information about Ecommerce Foundation page 32 Population page 13 Ecommerce Foundation’s Research Services page 33 B2C E-commerce Turnover and Growth Rate page 14 Information about the Reports page 34 Spending per Product Category page 15 GOMSEC page 35-38 Spending per Service Category page 16 Definitions page 39-40 Online B2C Sales per Category page 17 Expert Opinion Webhelp page 18 Sources page 41 Mobile Indicators page 19 Acknowledgements page 42-44 Cross-border Facts and Figures page 20 Online Payment Methods and VAT Rate page 21
www.ecommercefoundation.org 2 Our Report Partners
Executed by: This report is created with help from the following partners
The Ecommerce Foundation is a non-profit organization founded by Ecommerce Europe. It conducts research and studies in the field of e- commerce and provides for benchmarking and reports on e-commerce facts and figures. It also serves as Ecommerce Europe’s research institute. In this role, the Ecommerce Foundation was commissioned by Ecommerce Europe to develop the European B2C E-commerce Report and more than forty national e-commerce reports.
Commissioned by:
Ecommerce Europe is the association representing 25,000+ companies selling goods and/or services online to consumers in Europe. Founded by leading national e-commerce associations, Ecommerce Europe is the voice of the e-commerce sector in Europe. Its mission is to stimulate cross-border e-commerce through lobbying for better or desired policy, by offering a European platform bringing the European e-commerce sector and other stakeholders together, and by providing in-depth research data about European markets.
In cooperation with:
GfK is the trusted source of relevant market and consumer information that enables its clients to make smarter decisions. More than 13,000 market research experts combine their passion with GfK’s 80 years of data science experience. By using innovative technologies and data sciences, GfK turns big data into smart data, enabling its clients to improve their competitive edge and enrich consumers’ experiences and choices.
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Asendia is one of the world’s top three international mail, shipping and distribution organizations, delivering your packages, parcels and documents to more than 200 destinations across the globe. Formed as a partnership between La Poste and Swiss Post in 2012, the Asendia business employs more than 1,000 people worldwide, has offices in 15 countries and a global network of delivery partners to get your package where it needs to be, when it needs to get there.
www.ecommercefoundation.org 3 Our Report Partners This report is created with help from the following partners Powered by:
Ingenico is the most knowledgeable global Payment Service Provider in the world, processing international e-commerce payments for more than 600 of the world’s most recognized e-commerce brands in the digital goods and services, travel, retail and video gaming industries, among many others. Ingenico’s business intelligence tools, Managed Fraud Services and more than 400 payments experts help our clients elevate their payment strategies to become a strategic asset to their companies.
Webhelp is a global business process outsourcer (BPO), specializing in customer experience and payment management in addition to sales and marketing services across voice, social and digital channels. From 21 countries with a 30,000-strong team, our focus is on engineering performance improvements and delivering a real and lasting transformation in our clients’ operating models to generate financial advantage. We partner with some of the world’s most progressive brands.
www.ecommercefoundation.org 4 United Kingdom B2C E-commerce Report 2016 Preface
Ecommerce Foundation At the Ecommerce Foundation, we believe that sharing knowledge is essential for the continuous growth of the e-commerce industry. For this reason we have recently developed two initiatives with the aim of helping e-commerce companies improve. The EcommerceWiki is an international platform on which we strive to gather as much relevant e-commerce content as possible, with the help of many experts worldwide. In addition, we have set up the Ecommerce Benchmark, a useful tool for companies to compare their e-commerce performance with their direct competitors in a safe and anonymous way. Through this report we want to share our knowledge on British B2C e-commerce. We have gathered these facts, figures and insights through thorough desk research and with the help of various partners. This results in an elaborate report which will definitely offer valuable information to parties that trade cross-border in the United Kingdom or have intentions to do so. Naturally, we could not have realized these reports without the help of others. Therefore we want to use this opportunity to express our gratitude to Asendia, Ingenico and Webhelp, who have enabled us to make our reports widely available and to GfK for their close cooperation and involvement. For any additional information about the Ecommerce Foundation and its products, please contact us through our website www.ecommercefoundation.org or send us an email at [email protected]. Director of Ecommerce Foundation Researcher E-commerce Jorij Abraham Roald Willemsen United Kingdom 2015 Key E-commerce Facts at a Glance
49.8mn 93%
53.6mn people are 49.8mn people use 43.4mn people over the age of 15 the Internet (93%) shop online (81%)
Total GDP of 71% of the population B2C e-commerce turnover and €2,568.1bn uses a smartphone 20% average spending per e-shopper
€3,625 €3,406 €3,079
E-commerce GDP Share of mobile in
€ 157.1bn
of 6.12% € €
online sales 141.6bn 125.7bn
Country report Country report Country report in commissioned by: sponsored by: cooperation with:
2013 2014 2015 Demographic indicators Country Report United Kingdom
Area: 244,820 km2 Capital: London AGE STRUCTURE Currency: Pound (GBP) Population by age category, 2015 40.9%
Total population: 64,875,000
Median age: 40.4 years Male: 17.4% 17.7% 39.2 years Female: 41.6 years 12.4% 11.6% Institution: Unitary parliamentary constitutional monarchy Population growth Broadband access: 88% Internet access: 93% URL country code: co.uk Official languages: English Widely spoken foreign language(s): 0-14 15-24 25-54 55-64 65+ French, German and Spanish Source: World Factbook, 2015 0.81%
Sources: Eurostat and Worldfactbook, 2016 Source: Worldfactbook, 2015
www.ecommercefoundation.org 7 The United Kingdom has the highest eGDP in Europe
GROSS DOMESTIC PRODUCT Country Report United Kingdom GDP at market prices, 2011-2015
Year GDP GDP (in millions of euros) (in millions of pounds)
2015 €2,568,052 £1,863,995
2014 €2,254,297 £1,636,259 E-commerce share of GDP 2013 €2,042,895 £1,482,815 6.12% 2012 €2,053,613 £1,490,594
2011 €1,866,018 £1,354,431
Source: Eurostat, 2016 GROSS DOMESTIC PRODUCT REAL GROWTH RATE GROSS DOMESTIC PRODUCT PER CAPITA Percentage change of GDP, 2011 - 2015 At current prices, 2011 - 2015 Year GDP per capita GDP per capita 2.9% (in euros) (in pounds) Explanation 2.2% 2.2% 2015 €39,400 £25,332 2.0% The British GDP grew 2014 €34,900 £23,154 by 2.2% in 2015. This 1.2% real growth rate 2013 €31,900 £23,372 takes the inflation 2012 €32,200 £21,412 rate into account. 2011 €29,500 £20,977 2011 2012 2013 2014 2015 Source: Eurostat, 2016 Source: Eurostat, 2016
www.ecommercefoundation.org 8 The British consumer was quite optimistic about the economy in 2015 Country Report United Kingdom
UNEMPLOYMENT RATE INFLATION RATE Percentage of the total labor force, 2011-2015 Annual change on Consumer Price Index (CPI), 2011-2015
8.1% 7.9% 7.6% 6.2% 4.5% 5.4% 2.8% 2.6% 1.5% 0.0%
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Source: Eurostat, 2016 Source: Eurostat, 2016 CONSUMER CONFIDENCE INDEX CCI on a three-month basis, 2014-2015 4.0 4.0 2.0 1.0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 -3.0 -2.0 -2.0
-7.0
Source: Tradingeconomics, 2016
www.ecommercefoundation.org 9 The unemployment rate is lower than the Western European average Country Report United Kingdom
ECONOMIC BENCHMARK A comparison of British economic indicators with the Western European and European ones, 2015 8.9% 7.7%
5.4%
2.8 1.9% 0.0% 0.2%
CCI Inflation rate Unemployment rate United Kingdom -1.8 Europe Western Europe
-12.8 Sources: Eurostat, IMF World Economic Outlook and Tradingeconomics, 2016
www.ecommercefoundation.org 10 United Kingdom ranks fourth on LPI, only behind Germany, the Netherlands and Belgium Country Report United Kingdom
Logistics Performance Index Ease of Doing Business Index E-government Index The LPI overall score reflects perceptions A high ease of doing business ranking The UN’s E-Government Index provides a of a country's logistics based on, among means the regulatory environment is comparative assessment of the e- other things, efficiency of customs more favorable for the starting and government development of UN Member clearance process, quality of trade- and operation of a local firm. The rankings States. Important factors contributing to transport-related infrastructure and ease are determined by sorting the aggregate a high level of e-government quality of logistics services. distance to frontier scores on 10 equal development are concurrent past and topics. present investments in telecommunication, human capital and provision of online services.
4th 6th 8th
Logistics Ease of E-government Index Performance Index Doing Business Index
www.ecommercefoundation.org 11 Expert opinion
1. What sets the UK apart from other countries in your region in terms of market and consumers? “The main point to remember about the UK is this: it is the biggest e-commerce market in Europe – and it is still growing. It is more mature than the rest of the continent. Little by little, the rest of Europe is catching up, but it “For returns, ease of use is a slow process.” is important, as is price; 2. What are the greatest challenges for foreign companies when they want to enter the UK market? retailers now have to “The main challenges depend on whether the company is from within the EU or not. Retailers outside the EU have to make sure that they are facilitating the customer experience correctly with regard to taxes. consider a range of EU-based retailers need to understand UK customer habits and expectations, which are typically higher than they are in the rest of Europe. These companies also need to realize that the UK market is extremely competitive options, including free – it is very price-driven – so understanding how customers respond to pricing and promotions is key.” returns” 3. What are the latest logistical developments in the UK? “Multiple choice final mile delivery options including PickUp DropOff (PUDO) are really important here. Things like CollectPlus are widening the choice for both retailers and customers. We’re also seeing click and collect grow in popularity, reducing costs for the retail channel and consumers.”
4. What are the latest e-commerce developments in the UK? “More established UK companies are looking beyond their borders to expand abroad. Europe isn’t enough for them, so they are reaching outside the EU to grow. On the back of that, several companies are helping retailers reach new markets by implementing local currencies and compliant payment checkout options. That is a big trend, and it is helping companies that want to move faster internationally and improving conversion rates outside their home markets.” Frederic Petton CEO Asendia UK
www.ecommercefoundation.org 12 The number of British e-shoppers grew by 4.3% in 2015 Country Report United Kingdom
2012 2013 2014 2015 Total population 63,495,303 63,905,297 64,351,155 64,875,165 Population online (15+) 46,677,937 48,035,056 48,901,730 49,835,804 Number of e-shoppers (15+) 38,275,908 40,829,797 41,566,470 43,357,150
Sources: Eurostat and Ecommerce Foundation, 2016
www.ecommercefoundation.org 13 British B2C e-commerce turnover growth is stabilizing Country Report United Kingdom B2C E-COMMERCE TURNOVER AND GROWTH RATE Total online sales of goods and services, in millions of euros, 2012-2016
14.3% 14.0% 12.6% B2C E-COMMERCE SALES Total online sales of goods and services, 2012-2016 11.0% 10.5% Year B2C e-commerce turnover (in millions of pounds) €173,691 €157,149 2016 (f) £126,000 €141,572 €125,719 2015 £114,000 2014 £102,700 €97,193 2013 £91,200
2012 £80,000
Source: IMRG, Capgemini and Ecommerce Foundation, 2016
2012 2013 2014 2015 2016 (f)
Source: IMRG, Capgemini and Ecommerce Foundation, 2016
www.ecommercefoundation.org 14 Clothing is by far the most popular online category
OVERVIEW OF POPULAR PRODUCT GROUPS Country Report United Kingdom Estimated online sales of popular product groups, in billions of euros, 2014-2015 MARKET SHARE Clothing Market share of the most popular product categories in 2015
Shoes & Lifestyle Clothing Media & entertainment Shoes & Lifestyle
Information technology Media & entertainment Information technology Home & Garden €6.4bn Home & Garden Telecom Telecom Food/Nearfood Food/Nearfood
Health & Beauty €4.5bn Health & Beauty
Household electronics Household electronics Remaining categories Consumer Electronics
Toys
Sports and recreation For the complete overview of the Source: Ecommerce Foundation, 2016 product groups, please Others €7.3bn 2014 2015 order your full report here (€95) Source: Ecommerce Foundation and Statista, 2016
www.ecommercefoundation.org 15 Travel is clearly the most popular online service category
OVERVIEW OF POPULAR SERVICE GROUPS Country Report United Kingdom Estimated online sales of popular service groups, in billions of euros, 2014-2015 For the complete overview of the 2015 service groups, please order MARKET SHARE 2014 your full report here (€95) Market share of the most popular product categories in 2015
€8.6bn Travel: Flight Tickets and Travel: Flight Tickets Travel: Package Insurances Event Tickets Others Hotels and Hotels Travel and Private Source: Ecommerce Foundation and Statista, 2016 Transport Travel: Package Travel and Private Transport NUMBER OF E-SHOPPERS AND AVERAGE SPENDING PER E-SHOPPER 2013-2015 Insurances €3,406 €3,625 €3,079 43.4mn Event Tickets 41.6mn 40.8mn Others
Source: Ecommerce Foundation, 2016 2013 2014 2015 Source: Ecommerce Foundation and Statista, 2016
www.ecommercefoundation.org 16 Online grocery shopping is relatively popular in the UK Country Report United Kingdom
ONLINE B2C SALES PER SERVICE/PRODUCT GROUP The percentage of online B2C sales in each service/product group, 2014-2015
Music 89%
Travel: Leisure Flights 84%
Travel: Hotel Stays 79%
Laptop/Tablet 59%
Car Insurance 57% Explanation Home Appliances 53% Of all purchases in the Home Appliances Home Furnishings 50% category, 53% were made online in the United Kingdom Clothing & Footwear 49%
Mobile Phones 45%
TV sets 38%
Cinema Tickets 33%
Groceries 16%
Source: Consumer Barometer Survey, 2014-2015
www.ecommercefoundation.org 17 Expert opinion
An omni-channel approach is insuperable
Whether their business is online, in physical stores or both, all retailers face similar challenges. They have to deliver a seamless customer experience at every touchpoint, maximize sales across every channel and device, and live up to their promises regarding product availability and delivery. In order to create a strong retail brand to which consumers will return, they must turn shopping into retail therapy – effortless, relaxing and ultimately enjoyable.
Customer experiences should not happen by accident, but must be engineered. This means that one should really understand his customer’s journey and its moments of truth, and base his next best actions on smart and predictive data analytics. An omni- channel approach to service and sales is powering the retailers’ ability to win hearts, minds and revenue share.
Gert-Jan Morsink Member Executive Board Webhelp Group
www.ecommercefoundation.org 18 Almost 20% of online sales is done through mobile devices Country Report United Kingdom Total mobile sales of €31.1bn
OVERVIEW OF SMARTPHONE USAGE 87% Percentage of population of 15 years and older that uses a smartphone, 2012-2015 of tablet users have made a purchase via their 71% devices’ browsers 68% 62% 79% 51% of smartphone users have made a purchase via their devices’ browsers 65% of British adults own 2012 2013 2014 2015
both a tablet and a smartphone Source: Google Barometer, 2016
Source: Episerver Mobile Commerce Report 2015 - UK, 2015
www.ecommercefoundation.org 19 A better availability is the main reason for cross-border shopping in the UK Country Report United Kingdom REASONS FOR NOT BUYING ABROAD Reasons why British e-shoppers are hesitant to buy cross-border Worrying about customer service 21% MOST POPULAR PURCHASES FROM FOREIGN COUNTRIES Assuming delivery takes longer 22% Most popular products for cross-border shopping British, 2015
Never occured to me 22% Explanation Assuming returning is difficult/costly 28% 29% of British e-shoppers have 32% bought books, CDs, DVDs or Own country meet my needs 35% 29% video games in a foreign online Source: Consumer Barometer Survey, 2014-2015 shop at least once
15% MOTIVATIONS FOR BUYING ABROAD 12% Reasons why British e-shoppers buy cross-border 11%
Recommendations from others 7% Trustworthiness 8% Clothing and Books, CDs, Cosmetics Toys Computer Better quality 9% Footwear DVDs or Hardware Video games Broader range of products 15% Source: Consumer Barometer Survey, 2014-2015 Better conditions 16% Better availability 40%
Source: Consumer Barometer Survey, 2014-2015
www.ecommercefoundation.org 20 Debit Cards dominate online payments in the UK Country Report United Kingdom VAT OVERVIEW Information on British VAT TOP ONLINE PAYMENT METHODS VAT overview United Kingdom In percentage of total online purchases Threshold for registration €96,500 (£70,000)
Standard VAT rate 20% 7% Where to register Aberdeen Non-established Taxable Persons 5% Unit (NETPU) Ruby House 6% Debit Cards 8 Ruby Place eWallet Aberdeen Credit Cards AB10 1ZP 14% Bank Transfers Periods for declaration Three-month basis Cash on Delivery Others Reduced VAT rates Applies to, among other things: 45% 5% • Property renovations 23% • Domestic gas and electricity 0% • Certain foodstuffs • Books and newspapers Explanation • Certain medical products and 45% of British online purchases pharmaceuticals • Children’s clothing are made through Debit Cards
Source: PwC, 2016 Source: Global Payments Report Worldpay, 2015
www.ecommercefoundation.org 21 Expert opinion UK payment market is dominated by Visa and Mastercard
The UK payments market is dominated by the two major card schemes Visa and MasterCard, as their combined market share for web-based payments is projected around 60%, followed by eWallets and bank transfers. Visa has the largest share in online card payments as 3 out of every 4 card payments are done with a Visa-branded card. Important to recognize is that debit cards are three-times more popular than credit cards, and twice as popular as the usage of eWallets (such as PayPal).
Recent stats show that almost 100 million debit and credit cards have been issued in the UK, of which 95-97% are issued under the Visa brand. Almost 80% of all retail spending (offline and online) was through debit and credit cards. In 2016, the volume and value of e-commerce payments continued to rise more rapidly than those of card payments – overall at 26% and 17% respectively – which indicates that other payment methods are gaining market share. It is expected that mobile-optimized (non 3D-secure) and less fraud-prone methods and solutions like eWallets and bank transfers will grasp some of the card payments’ market share in the coming years.
As of December 9, 2015, the MasterCard and Visa interchange fees were also capped in the UK. The interchange fees for domestic credit card payments are currently capped at 0.30% and debit card payments at 0.20%. In addition, the interchange fee for a debit card transaction in an e-commerce environment is capped at £ 1.00, regardless the transaction amount. The caps will definitely drive merchant fees down and might be beneficial to card usage and acceptance in future
Erik van den Heuvel Chief Marketing Officer at About-Payments
www.ecommercefoundation.org 22 iOS is the most-used operating system on mobile devices Country Report United Kingdom INTERNET BROWSERS DESKTOP OPERATING SYSTEMS DESKTOP Share of Internet browsers 2.9% Share of operating systems visiting Statcounter sites, 2015 visiting Statcounter sites, 2015 3.9% 9.2% 9.3% Win7 Chrome Win8 IE 6.7% 15.3% 44.5% OS X 47.8% Firefox 16.4% Win10 Safari WinXP 24.8% Other 19.2% Other INTERNET BROWSERS MOBILE OPERATING SYSTEMS MOBILE Share of Internet browsers Share of operating systems 4.8% visiting Statcounter sites, 2015 visiting Statcounter sites, 2015 4.6%
10.8% Safari 9.5% iOS Chrome Android 55.9% 53.2% Android 34.8% 26.5% BlackBerry
Other Other
Source: Statcounter, 2016 See the Definitions page for Statcounter’s research method
www.ecommercefoundation.org 23 Nearly half of the British population uses Facebook Country Report United Kingdom
SOCIAL MEDIA USAGE DISTRIBUTION OF FACEBOOK USERS Share of the total population, Q4 2015 Facebook users divided per age group, Q1 2016 47% 28%
21%
17% 20%
14% 12% 10% 12% 10% 8% 11% 11%
Facebook Twitter Instagram Snapchat LinkedIn Google+ Pinterest
16-24 20-29 30-39 40-49 50-59 60+
Source: Statista, 2016 Source: Statista, 2016
www.ecommercefoundation.org 24 General tips and tricks Country Report United Kingdom
Every country has its own social habits and rules. Therefore, when doing business in a foreign country, you should be aware of the DOs and DON’Ts of that particular nation.
Below, you will find some tips and tricks that might help you when doing business in United Kingdom.
Business cards are exchanged at the initial introduction without formal ritual Written communication follows strict rules of protocol. How a letter is closed varies depending upon how well the writer knows the recipient. Written communication is always addressed using the person's title and their surname. First names are not generally used in written communication, unless you know the person well. Email is now much more widespread, but the communication style remains more formal, at least initially, than in many other countries. Most British will not use slang or abbreviations and will think negatively if your communication appears overly familiar Punctuality is important in business situations. In most cases, the people you are meeting will be on time. Scots are extremely punctual. Call if you will be even 5 minutes later than agreed. Having said that, punctuality is often a matter of personal style and emergencies do arise. If you are kept waiting a few minutes, do not make an issue of it. Likewise, if you know that you will be late it is a good idea to telephone and offer your apologies
www.ecommercefoundation.org 25 Tips for online merchants Country Report United Kingdom
Below, you will find some practical tips for online merchants that want to sell products and/or services in United Kingdom.
Tips for online merchants 28% of young British shoppers (aged 16-21) browse online stores, even when they do not have a product in mind. For adult shoppers (aged 22-65) this is 12% Make sure that credit cards are your main payment method. UK customers are unfamiliar with processing Bank Transfers and Cash on Delivery You should convert the costs of products into British Pounds. UK customers are often charged by banks for buying online in euros The UK is among the top ranking countries for foreign web customers. Make sure your website is available not only to local but also to foreign customers in terms of language and usability Do not use shipping companies that do not offer a tracking number. UK customers like to know where their goods are during transit Not having a contact center in the UK might annoy customers, as it is expensive to ring and post returns to mainland Europe Do not take UK customers for granted. Their expectations and standards are very high and they will only stick with your company and/or product as long as these are met Consumers respond well to advertising and will buy if they see an advantage, such as price, quality, superior design, branding or environmental benefits. After-sales service is important as consumers do not hesitate to complain and defend their rights. For British consumers, it is important that they are not charged any shipping costs. They attach more value to this than to fast delivery Click and collect is an important way of logistics in the UK. If the threshold is not exceeded, but the applicable VAT rate of the country of arrival is lower than the VAT rate of the country where the transport begins, the supplier could nevertheless opt to account for VAT of the country of arrival. Please note that this is only possible when certain conditions have been fulfilled.
Source: Ecommerce Foundation, PwC, GfK and Santander , 2016
www.ecommercefoundation.org 26 Legal tips and tricks Country Report United Kingdom
DON’T: place cookies without DON’T: exclude your liability in your Every country has its own rules DON’T: violate anti-spam regulations. permission of the visitor. Cookies terms and conditions and legislation. Therefore, Pay attention to the Privacy and require notice and opt-in consent, DON’T: use penalty clauses that are Electronic Communications (EC except for cookies that are strictly disproportionate in your terms and when doing business in a Directive) Regulations 2003. For necessary for the transmission of conditions foreign country, you should be example, make sure you have communication (essential/functional DON’T: only use methods of payment aware of these. obtained permission to send cookies) that involve costs. At least one of the marketing emails. Sending marketing DON’T: pre-tick boxes for the methods has to be free of any costs. On this slide, you will find an emails to existing customers is consumer if they would have to untick allowed, but only if you give them a them to avoid a charge overview of United Kingdoms’ simple way to opt out when you DON’T: only place your terms and most important laws and collect the data as well as in all emails conditions on your website, as that is regulations, as well as some you send them not enough. The customer needs to practical tips. DON’T: omit the information about accept them. the consumer’s right to cancel or withdraw. When this information is not available on your website, the right will be extended from 14 days to 12 months
Source: legalict.com Source: legalict.com
Source: legalict.com
www.ecommercefoundation.org 27 Legal tips and tricks Country Report United Kingdom
DO: provide the following information DO: enable payment using the biggest Every country has its own rules DO: notice that the United Kingdom is a when applicable: all forms of additional credit card companies and legislation. Therefore, common law country. Rules on contract costs, the complaint handling policy, billing DO: refund all costs in case customers use formation may defer from the country in periods, after-sale customer assistance, their right to cancel or withdraw. This when doing business in a which you are residing and the law is existence of relevant codes of conduct, the includes the costs charged for payment foreign country, you should be primarily based on case law duration of the contract, conditions about and delivery, except if a specific method of aware of these. DO: notice that the consumer must payments in advance, and in case of digital delivery is requested by the customer explicitly acknowledge any obligation to content: technical aspects and compatibly. DO: mention that the customer bears the On this slide, you will find an pay (for example, a button that says ‘pay These are legally required when applicable direct costs of returning goods, unless now’). This is the case, even if taking DO: use a language every party will agreed otherwise. If not mentioned, the overview of United Kingdoms’ payment is to be deferred (e.g. if understand, like English trader has to bear those costs most important laws and preceded by a free trial period) DO: clarify the method for payments prior DO: provide a withdrawal form. The regulations, as well as some DO: provide the following information on to the ordering process customers do not have to use it, as long as practical tips. your website: identity, address, total price DO: confirm the contract on a durable they make clear that they are withdrawing. (incl. VAT), the main characteristics of the medium. An e-mail is sufficient in this The burden of proof of withdrawal rests goods or services, the right to cancel or regard with the customer withdraw, the terms and conditions, the DO: notice that guarantees and warranties costs of returning products, the are additional to the legal rights a arrangements for payment, delivery, consumer has and they must not affect performance and the time of delivery. those rights in any way. These are all legally required The legal guarantee is two years DO: notice that until the time of delivery, product liability lies with you
Source: legalict.com Source: legalict.com
Source: legalict.com
www.ecommercefoundation.org 28 Important holidays Country Report United Kingdom
February 14 – Valentine’s Day Dutch people celebrate Valentine’s Day. On this day people like to buy flowers, plush toys and presents for their lovers.
First Sunday in March – Mother’s Day (March 6 in 2016) On the first Sunday in May (Mother’s Day), three weeks before Easter Sunday, people in the United Kingdom honor their mothers and give them presents.
Third Sunday in June – Father’s Day (June 19 in 2016) On the third Sunday in June (Father’s Day), people in the United Kingdom honor their fathers and give them presents.
December 24-26 – Christmas Consumers like to shop for items such as food and presents for Christmas. Online shops should therefore take a shopping frenzy in the months of November and December into account.
www.ecommercefoundation.org 29 Opportunities and threats Country Report United Kingdom
Opportunities and barriers Naturally, the United Kingdom offers both opportunities and threats for e- commerce companies. Below, we provide a short overview of some important opportunities and threats that you have to take into account when you are thinking about opening an online shop in United Kingdom.
Opportunities: Threats:
• The United Kingdom is ranked fourth on • An ageing population. In general, older the Logistics Performance Index. This people shop online less often, due to trust indicates that logistics are well taken care issue, for instance. of.
• Fashion and travel are extremely popular • Satisfied Internet penetration (93%). As a online categories in the United Kingdom. result, there is little to no growth of the number of Internet users.
www.ecommercefoundation.org 30 About Ecommerce Foundation
Information about the Ecommerce Foundation and its Reports
Commissioned by Executed by Ecommerce Foundation About Ecommerce Foundation
Ecommerce Foundation The Ecommerce Foundation is an independent non-profit organization, co-founded by Ecommerce Europe and working in partnership with national e-commerce associations worldwide. In addition, the Ecommerce Foundation cooperates with online and omnichannel selling companies from industries such as retail, travel & finance. Its mission is to facilitate the development of practical knowledge, insights and learnings for which individual institutions, associations and B2C selling companies do not have the (financial) resources and/or capabilities.
By combining collective goals and efforts, the Ecommerce Foundation is able to realize e-commerce research, reports, benchmarks and studies that could not have been possible on an individual basis.
www.ecommercefoundation.org 32 Ecommerce Foundation’s Research Services About Ecommerce Foundation
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www.ecommercefoundation.org 33 Information about the Reports About Ecommerce Foundation
About the reports 2016 prices and publication schedule European overview report (€790) The B2C E-commerce Reports are published by the Ecommerce Foundation. They • May 30 provide overviews of the mature and emerging markets and of the major European and global statistics in the field of e-commerce. Global overview report (€790) • September 29 In total, the Ecommerce Foundation will publish 12 country reports, covering the most important e-commerce markets worldwide. These include the United States Country reports (€95) of America, the United Kingdom, China and Brazil. In addition, it will publish a • The Netherlands April 7 European and global overall report. For publication dates and prices, please see • Belgium April 14 the table on the right. • United Kingdom April 21 • United States April 28 Personalized report • Germany May 12 It is also possible to have a tailor-made e-commerce report made, completely • France May 19 based on your wishes and requirements. This can be ordered through • Australia June 23 [email protected]. • Russia July 7 • Japan July 21 Light reports • China September 15 Ecommerce Europe also publishes light reports, which contain a summary of the • Brazil October 13 full reports. These light reports can be downloaded for free through • India October 27 www.ecommercewiki.org
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www.ecommercefoundation.org 34 Global Online Measurement Standard for B2C E-commerce (GOMSEC) About Ecommerce Foundation
GOMSEC aims to provide guidelines for measuring and Definition of B2C e-commerce sales Classification of B2C e-commerce monitoring B2C e-commerce. As a result, all countries worldwide are able to provide data with respect to the “Any B2C contract regarding the sale of goods and/or The following classification on the next few pages provides penetration of B2C e-commerce in a standardized way. All services, fully or partly concluded by a technique for an overview of areas and sectors included in GOMSEC. Ecommerce Foundation figures and estimates are based on distance communication.” GOMSEC, unless stated otherwise. The data and research Online purchases of the following items are excluded from by GfK is also in accordance with GOMSEC. Technique for distance communication: means that can GOMSEC: be used for communication regarding the offer made by • Transactions between private individuals/consumers The GOMSEC reports on sales figures for the total B2C e- the trader and the conclusion of a contract, without the (C2C), such as auctions and marketplaces, and commerce worldwide and for each country separate in the necessity of the consumer and trader being in the same between businesses (B2B) country profiles, based on total sales of goods and place at the same time. • Online gambling and gaming services. • Cars and other motor vehicles Contract: a contract whereby use is made, either solely • Houses and real estate These total sales of goods and services are based on the or in part, of one or more techniques for distance • Utilities (e.g. water, heating and electricity) areas/sectors/classification of areas and sectors, as stated communication within the framework of a system • Mortgages, loans, credit cards and overdrafts on the next few pages. organized by the trader for the distance sale of goods • Savings accounts, funds, stocks&shares and bonds and/or services, up to and including the moment that All data reported in the national currency of the country the contract is concluded; B2C e-commerce therefore includes all online transactions involved is converted into euros according to the average between businesses and consumers using desktop (annual) rate of exchange as provided by, preferably, the computers, laptops, tablets, smartphones, point-of-sales European Central Bank (ECB) or the national bank of the and smart-wearables, for instance through online shops, particular country. The reference period that is used for physical stores (“online instore”), email, QR codes, this was from 1 January 2015 to 31 December 2015. catalogs, etc. B2C e-commerce includes Value Added Tax Growth rates are calculated and measured by the B2C e- (VAT) or other sales tax, delivery costs and apps, but commerce sales in the national currency. excludes returns.
www.ecommercefoundation.org 35 Global Online Measurement Standard for B2C E-commerce (GOMSEC) About Ecommerce Foundation
Media & Entertainment Electronics Music (physical, download & streaming)/Spotify based on new subscriptions Consumer Electronics Information Technology (IT) Household Electronics Video (DVD, Blu-ray, downloads) Photo equipment IT hardware (PCs, laptops, MDA: Games hardware & games software tablets, etc.) air-conditioning, Books & e-books Audio equipment Computer Software dishwashers, wash Apps machines and other New subscriptions newspapers ands magazines (no single copy sales) TV/video equipment Music instruments white goods Car electronics USB sticks, DVD/CD- SDA: equipment for Fashion (navigation, audio, recordable, ink cartridges, personal care, home Clothing Shoes & Personal lifestyle etc.) computer accessories comfort, kitchen Underwear & Upperwear Shoes appliances Children's wear Jewelry, Bijoux, Watches & others Swimwear & Sportswear fashion accessories (e.g. sunglasses) Sports & Recreation Nightwear & legwear Bags, wallets, suitcases Sports hardware (e.g. soccer shoes, tennis rackets) Bicycles & accessories Articles for camping and recreation Toys Indoor and outdoor toys
www.ecommercefoundation.org 36 Global Online Measurement Standard for B2C E-commerce (GOMSEC) About Ecommerce Foundation
Home & Garden Food/Nearfood/Health Furniture and kitchens Food/Nearfood Health & Beauty Floor and window coverings (e.g. curtains and blinds) Food & Beverages Personal care & Hygiene Home textiles Fresh produce Baby care Cookware (sets), kettles and oven equipment Packaged consumer goods Perfume Table and kitchen articles Detergents/household cleaning OTC Articles for cleaning, wash and store Animal feed Decoration Tobacco Lamps and fixtures DIY-articles Garden articles Other: Products Flowers and plants (in home) Cars components Glasses and contact lenses Telecom Stationery Smartphones, mobile phones & mobile devices Pictures and photo albums Telefax and answering machines Pet supplies Erotica Headsets & Accessories (mobile) phones Prepaid cards and tariffs of new phone subscriptions
www.ecommercefoundation.org 37 Global Online Measurement Standard for B2C E-commerce (GOMSEC) About Ecommerce Foundation
Insurance Travel New indemnity, Life and Health Insurances Package Travel Flight Tickets & Accommodations Package travel Flight Tickets Liability insurance ANW-gap insurance Health Insurance – Car insurance (insurance for receiving a Base Private transport if booked through Hotel stays Fire and theft insurance payment in addition to a Health insurance – a tour operator Apartment/bungalow/camping site survivor's allowance) additional -> all of the above not booked in Bike/caravan/motorbike/ Annuity insurance Disability insurance – combination with other travel-parts Scooter insurance Pension entrepreneurs Event Tickets Accident insurance Life insurance Disability insurance – Tickets for concerts and festivals Boat insurance Funeral insurance private Tickets for (movie) theaters Legal assistance insurance Endowment insurance Mortgage-related Tickets for zoos and amusement parks Home insurance based on savings disability insurance Tickets for museums Travel insurance Endowment insurance Mixed insurance Tickets for sports games (continuous/annual + short based on investments (=endowment term) insurance + life Other: Services Insurance package insurance) New subscriptions to dating service Other services
www.ecommercefoundation.org 38 Definitions related to the Internet, e-commerce and online retailing About Ecommerce Foundation
• Broadband access: the availability of broadband is measured by the percentage • E-households: number of households that use the Internet for personal gain. of households that are connectable to an exchange that has been converted to support DSL technology, to a cable network upgraded for Internet traffic, or to • E-household expenditure: expenditure per household that bought goods or other broadband technologies. It includes fixed and mobile connections (source: services in the past year. Eurostat) • Global Online Measurement Standard for B2C E-commerce (GOMSEC): aims to • Cross-border e-commerce: percentage of e-commerce purchased at foreign sites provide guidelines to measure and monitor B2C e-commerce in order to enable all European countries to provide data with respect to the penetration of B2C e- • Ease of Doing Business Index: The Ease of Doing Business Index is developed by commerce in a standardized way. the World Bank, and averages the country's percentile rankings on nine topics. It is made up of a variety of indicators, giving equal weight to each topic. The • E-Government Index: The UN’s E-Government Index provides a comparative rankings for all economies are benchmarked to June 2010. The Index covers 185 assessment of the e-government development of UN Member States. One of the countries. primary factors contributing to a high level of e-government development is concurrent past and present investment in telecommunication, human capital • E-commerce (or electronic commerce), a subset of e-business: any B2C contract and provision of online services. on the sale of products or services fully or partly concluded by a technique for distance communication. • Gross Merchandise Volume: the total sales facilitated by a third party, such as a market place. • E-commerce GDP: total amount of goods and services online divided by the total Gross Domestic Product (GDP). • E-services or electronic services: “Deeds, efforts or performances whose delivery is mediated by information technology. Such e-service includes the service • Economic Freedom Index: the Index of Economic Freedom is an annual guide element of e-retailing, customer support, and service delivery.” This definition published by The Wall Street Journal and The Heritage Foundation, Washington's reflects three main components: service providers, service receivers and the No. 1 think tank. For over a decade, the Wall Street Journal and The Heritage channels of service delivery (i.e. technology). (Jennifer Rowley, Professor Foundation have tracked the march of economic freedom around the world with Information and Communications, Manchester Metropolitan University, UK) the influential Index of Economic Freedom. There are 5 categories, ranking from Free (with a score between 80 and 100) to Repressed (between 40 and 49.9). • Inactive online population: users that have access to the Internet but have not (yet) purchased goods or services online in the past year.
www.ecommercefoundation.org 39 Definitions related to the Internet, e-commerce and online retailing About Ecommerce Foundation
• Market place: online platform on which companies (and consumers) sell goods • Online expenditure: spending per user who purchased goods or services online. and/or services. • Online Retail (or e-retail, electronic retail or retailing or even e-tailing): the • Logistics Performance Index (LPI): The Logistics Performance Index (LPI) measures selling of retail goods and services on the Internet. In the limited sense of the the “logistics friendliness” of 155 countries. It helps countries identify the word, sectors such as online leisure travel, event tickets, downloading music or challenges and opportunities they face in their trade logistics performance and software are not included. Online-only retail shops are often referred to as pure what they can do to improve this. The Index is developed by the World Bank and players. is based on a worldwide survey of operators, such as global freight forwarders and express carriers. • Penetration levels: the percentage of a population using the Internet, mobile phones, smartphones or tablet devices. • Mobile commerce (or m-commerce): the ability to conduct commerce using a mobile device e.g. a mobile phone, a PDA, a smartphone, a tablet or other • Real economic growth rate: a measure of economic growth from one period to (emerging) mobile equipment. another expressed as a percentage and adjusted for inflation. The real economic growth rate is a measure of the rate of change that a nation's gross domestic • Mobile subscriptions: mobile cellular telephone subscriptions are subscriptions to product (GDP) experiences from one year to another. a public mobile telephone service using cellular technology, which provide access to the public switched telephone network. Post-paid and prepaid subscriptions • Retail sales: the selling of mainly goods from businesses to individuals from a are included (source: Eurostat). traditional or so-called bricks-and-mortar shop.
• Networked Readiness Index (NRI): The NRI measures the tendency for countries • Statcounter research method: Statcounter is a web analytics service and their to exploit the opportunities offered by information and communications tracking code is installed on more than three million sites globally. These sites technology (IT). The NRI comprises three components: the environment for IT cover various activities and geographic locations. Every month, Statcounter offered by a given country or community, the readiness of the country's key records billions of page views to these sites. For each page view, they analyze the stakeholders to use IT, and the usage of IT among these stakeholders. browser/operating system/screen resolution used and they establish if the page view is from a mobile device. They calculate their Global Stats on the basis of • Online buyer (or e-shopper, e-buyer): an individual who regularly bought or more than fifteen billion page views per month, by people from all over the world ordered goods or services through the Internet. onto more than three million member sites.
www.ecommercefoundation.org 40 Sources About Ecommerce Foundation
The sources consulted for the creation of this report include: Sources Publications This report could only be realized by consulting a great number of valuable • CIA Worldfactbook sources. These were available in various countries and regions in Europe and • Doingbusiness around the globe. The wide variety of sources include public domain • European Commission • Eurostat publications, blogs, websites, industry and financial specialist publications, • Google Barometer regional and local news, annual reports, and press releases. • IMF • Statcounter Sometimes the information sources are contradictory and sometimes • Statista different figures and data were given by varying sources within the same • Tradingeconomics country, for example due to different definitions. In our reports we have • Worldbank mentioned the different sources, definitions and outcomes of such reports, Corporate sources studies and interpretations. • Capgemini • Episerver This report is based on information that we consider reliable, but we cannot • GfK vouch for it being completely accurate or complete, nor should it be relied • IMRG upon as such. Opinions expressed are our current opinions as of the date of • LegalICT this report. • PwC • Santander • Worldpay
www.ecommercefoundation.org 41 About the Authors About Ecommerce Foundation
Roald Willemsen, Researcher E-commerce Jorij Abraham, Director Research & Advice Roald Willemsen (1991) has worked for Ecommerce Europe and the Jorij Abraham (1972) has been part of the international e-commerce community Ecommerce Foundation since 2015, and graduated in Business since 1997. He was an E-commerce Manager at Bijenkorf, TUI and Sanoma Management from the University of Applied Sciences in Ede. Media and Director of Consulting at Unic. Since 2013 he has been Director of Research & Advice at Ecommerce Europe. He is involved in the research of the global e-commerce market and is He is also director of the Ecommerce Foundation, a research institute offering developer of the National E-commerce Reports. practical e-commerce research and benchmark services.
Richard van Welie, Chief Editor Richard van Welie (1979) has worked for Ecommerce Europe and the Ecommerce Foundation as a chief editor since March 2014. In his role, he is responsible for the National E-commerce Reports and the EcommerceWiki. In addition, he is involved in the Ecommerce Benchmark and other projects. After graduating in Communication Sciences in 2004, he studied American Studies at Radboud University Nijmegen and graduated in 2008.
www.ecommercefoundation.org 42 Address, Disclaimer and Copyright About Ecommerce Foundation Address: Ecommerce Foundation Raadhuisstraat 22 1016 DE Amsterdam - the Netherlands
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Disclaimer The B2C E-Commerce Reports are publications by Ecommerce Foundation, which also owns the copyright for these reports. Although the utmost care has been taken in the construction of these reports, there is always the possibility that some information is inaccurate. No liability is accepted by Ecommerce Foundation for direct or indirect damage arising pursuant to the use of the report.
Copyright © It is not allowed to use the full information published in this report without the Ecommerce Foundation’s prior consent. Any violation in this regard will be charged a legal fine of € 25,000 (twenty-five thousand euros), as well as a further penalty of € 2,500 (two thousand, five hundred euros) for every day that this non-compliance continues. However, it is allowed to use parts of the information published in our full or light reports provided that proper sourcing is used (Ecommerce Foundation, www.ecommercefoundation.org/reports)
www.ecommercefoundation.org 43 United Kingdom B2C E-commerce Report 2016
Ecommerce Foundation Website: www.ecommercefoundation.org Raadhuisstraat 22 Information: [email protected] 1016 DE Amsterdam, the Netherlands Twitter: @Ecomfound
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