Home » The hidden costs of e-commerce: by 2025, Italian stores will lose almost 4 billion

The hidden costs of e-commerce: by 2025, Italian stores will lose almost 4 billion

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A blow that touches four billion. The hidden face of the e-commerce boom, of the very rapid shift of consumption from the physical to the digital channel, will have an enormous cost for Italian retailers who will not be able to get on the train of the revolution. In the space of four years, due to the unthinkable thrust of a pandemic that has taught to move up and down the network even to those who were convinced they were “resisting” the sirens of trade 2.0, the sector will burn 3.7 billion euros. The accounts are in a study by the global consultancy giant Alvarez & Marsal, carried out in collaboration with Retail Economics.

The survey explains that “digital only” retailers generally operate with considerably lower margins than the multi-channel and physical business models: the analysis shows that in a sector where profits have been gradually diminishing for several years, the margins for pure European online retailers are on average around 1.4%, a value of 4 percentage points below that of mixed retailers which reaches 5.2%. To this premise – less margins for completely online businesses – must be added the investments required by traditional retailers to make the move towards the digital market. It is necessary to invest in new skills, in the enhancement of the technological infrastructure and logistical aspects and to all this must be added the “real variables capable of influencing the future of the sector more: shipments and above all returns”. The latter represent the keystone of the sector. The new digital consumers, and this, says the study, “is particularly valid for young buyers, often digital natives”, return the goods purchased online more easily: just think that almost 9% of the total Italian e-commerce shipments come back as a return, in the UK this percentage rises to 11%.

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According to Alvarez & Marsal, Italy will be the country that most of all in Europe will see retailers’ profit margins diminish with “a loss of almost one percentage point in a market that has already historically suffered from reduced margins compared to the rest of Europe – says Alberto Franzone, Country Co-Head of Alvarez & Marsal in Italy – mainly due to the acceleration in terms of digital shift that has characterized our country since the pandemic and which is expected to continue at a faster pace than the rest of Europe for the next few years “. What emerges from the report, in fact, is the correlation between an increase in online penetration and a decrease in profit margins: in the face of digital penetration of around 6% in 2015, the average margin of European retailers was around 6.5 %, today this value reaches 4.5%, thus losing 2 percentage points, in close connection with digital penetration which has risen to 14%. But that is not all. According to the study, in fact, Italy will be the country in which this penetration will occur faster than the rest of the European countries: an average increase of 13.5% per year from 2021 to 2025 is estimated. “It is therefore no coincidence that it is precisely Italian consumers who are most likely to consider the digital revolution that has affected the world of domestic consumption permanent »continues Franzone. The change seems irreversible for some product sectors such as household appliances and electronic objects in general which have seen a shift towards online sales of 18.7%, housewares with 16% and clothing with 14.2%, luxury products, which require a more thoughtful purchasing process, continue to dominate traditional channels. In any case, the way to online seems to be cleared, only in Italy it is estimated that physical stores will lose almost 30% of visitors in the post-pandemic, in the UK the percentage rises to 44%. “In this context – Franzone reasons – brands will have to implement a series of measures to avoid succumbing”.

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