This year, L2 released its first study looking at the entire European retail landscape. Unlike previous reports, this study combines three subcategories: grocery stores (e.g. Aldi, Sainsbury), non-grocery stores (e.g. Fnac, Brico) and hypermarkets (stores like Walmart and Carrefour that sell groceries along with large volumes of other goods like furniture and personal care products). A few highlights from an interview with Associate Director of Europe Research Reid Sherard, who led the study.

France is actually pretty good at e-commerce. “A lot of Americans think France is an underperforming market, but it’s not the case ,” Reid said. “There are a lot of sophisticated players in the market, and a lot of sophisticated hypermarkets.” Many French retailers are focusing on drive-through, a concept similar to click-and-collect where shoppers are able to pick up their goods without leaving the car. In the past year, the major French hypermarkets have opened nearly 2,000 drive-through pickup points.

UK retailers are incredibly aggressive in digital. L2 research indicates that UK is an incredibly competitive market for retailers, but it is difficult for outsiders to understand the magnitude of that competition. “I didn’t really realize how competitive [the UK market was] until I moved to London. Specialty retailers are stuck in a discounting spiral.”

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Specialty retailers have been especially aggressive in fulfillment. For example, 19% of retailers in the UK offer same-day delivery in London and select metropolitan areas – far more than France and Germany. Amazon’s Prime Now service offers grocery delivery in under an hour, imposing a new standard and likely prompting Sainsbury to test the same day delivery service “Chop Chop” in select London neighborhoods. In contrast, few retailers in the US offer same-day delivery service.

Click-and-collect is a replacement for free shipping in the UK. As various fulfillment options are beginning to eat into profit margins, European retailers have shifted the cost to consumers. In the UK, just 21% of retailers offer free shipping for some orders. Many retailers direct consumers to pick up their online orders at the store as a version of free shipping.

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Non-grocery category is strongest in Digital IQ, and grocery is weakest. Sherard said combining various types of stores in a report allowed for comparative analysis, which in turn lead to insights about weaknesses and strengths across regions and subcategories.

“We noticed a clear progression of whose business was affected by e-commerce,” he said. Non-grocery stores excelled at e-commerce as a whole while grocery brands were the weakest. The hypermarket category had the most disparity, with some markets being very adept at digital (France) and others struggling.

Download L2’s study on European retailers to learn more.

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