The state of UK
commerce 2023
How to overcome economic headwinds in the post‑COVID world
You’d be forgiven for thinking 2022 and 2023 would be a time to relax, recover and re‑energise. Nope. 2022 brought a ground war in Europe, sky‑high inflation, rocketing fuel prices, rapidly rising operation costs, labour shortages, supply chain disruptions and a cost of living crisis.
But, the future of ecommerce is now. We bring you this State of Commerce report from our network of thousands of merchants, partners and proprietary consumer sentiment survey.
We’re here to lead the way on ecommerce trends based on online shopper statistics from across the UK and Europe.
The state of UK
commerce 2023
How to overcome economic headwinds in the post‑COVID world
You’d be forgiven for thinking 2022 and 2023 would be a time to relax, recover and re‑energise. Nope. 2022 brought a ground war in Europe, sky-high inflation, rocketing fuel prices, rapidly rising operation costs, labour shortages, supply chain disruptions and a cost of living crisis.
But, the future of ecommerce is now. We bring you this State of Commerce report from our network of thousands of merchants, partners and proprietary consumer sentiment survey.
We’re here to lead the way on ecommerce trends based on online shopper statistics from across the UK and Europe.
This new chapter comes at a time when customer acquisition and fulfillment costs are on the rise, inflation is climbing, supply chains are in disarray and ecommerce has become a much bigger piece of the retail pie.
Based on insights from our network of thousands of merchants, partners and a proprietary consumer sentiment survey, we’re here to shed light on several emerging ecommerce trends to help your business succeed in a post‑pandemic economy.
Key ecommerce trends within the report
The transformation of online payments
Payment preferences are constantly changing
Payments have been center stage in the UK and European Union for years as PSD2 (Payment Services Directive 2) and its strong customer authentication (SCA) requirements were on again, off again, on again, delayed and finally enforced. Today the new payment requirements, meant to make online commerce more secure for consumers, are the regulation of the land across the European Economic Area.
Payments are undergoing a rapid and dramatic transformation. Consumers look to pay in different ways for different purchases and leave retail sites disappointed when their payment method of choice isn’t available.
In fact, Europe is leading the world in BNPL, according to FIS Worldpay. 8% of ecommerce sales in Europe rely on the instant-loan option, more than twice any other region, according to the FIS Worldpay Global Payments Report.
The post-COVID returns reckoning
Consumers see returns as a part of the shopping process
Ecommerce in Europe, like the rest of the world, is experiencing a returns reckoning. COVID‑19 lockdowns pushed more consumers online more often. Consumers have grown more comfortable with returns, they now see returns as a part of the shopping process.
We can’t deny that consumers have returned to in-store shopping, but ecommerce sales result in returns far more often than in-store purchases, which allow for close inspection of a customer’s desired item. Meanwhile, returns of a more sinister variety also increased.
The surge in returns has retailers like Zara and Boohoo adding return fees for online returns. Asos is warning investors that returns spurred by inflation are eating into annual profits — which will come in anywhere from at £50 to £120 billion lower than earlier projected.
But beware, with more returns, a darker side emerges. Some will claim an item that arrived, never arrived. Or that what did arrive was not the item described on the website or was damaged on the way. Looking at a relevant subset of Signifyd data shows a 35% increase this year in false claims that an item never arrived. False claims about the condition of a product were up 68% in the region.
62%
of shoppers would stop
buying from a brand after a
poor return experience
59%
of shoppers would buy
more from a brand based on
a good returns experience
56%
of shoppers would be hesitant
to buy from a brand that
charges a fee for returns
International expansion opens new markets
Consumers have demonstrated that they are comfortable shopping across borders
Whatever the current economic headwinds, global ecommerce is in for substantial growth in the years ahead. eMarketer says the worldwide opportunity for digital commerce will reach $6.17 trillion by next year. Online sales have continued their robust growth — up 33% year over year in 2021 — even as shoppers return to stores in larger numbers, if not at quite pre‑pandemic numbers.
One significant part of this growth is the increase in cross-border sales — up 45% this year compared to pre-pandemic figures, Signifyd data shows. As a growth opportunity, ecommerce presents a unique retail opportunity. Just as online consumers can buy from nearly anywhere in the world while nearly anywhere in the world, online merchants can set up shop nearly anywhere from wherever they are.
Cross-border purchases aren’t foreign to European consumers
Online shoppers in the UK, France and Italy have demonstrated that they will buy from merchants outside their home countries. In fact, 87% of UK consumers say they shop cross-border, while 90% of consumers in EU members France and Italy say they shop cross-border. Between 1/5 and just over 1/4 of shoppers surveyed make more than 30% of their online purchases cross-border.
Retail ecommerce sales worldwide, 2019-2025
Trillions, % change and % of total retail sales
SCA’s new payment path is one bumpy road
The new SCA landscape has piled disruption on top of disruption for UK and European Union merchants. Getting SCA right by turning to intelligent solutions for maximum efficiency and protection from malicious actors transforms SCA into a competitive advantage.
In those cases, SCA was bad news for consumers. It was also bad news for merchants — and not just in that case. It turns out a frustrating experience can turn a consumer against a merchant for good. In Italy, France and the UK, 56%, 46% and 33% of consumers respectively said two or fewer bad online checkout experience would cost a merchant their business for good.
The state of UK commerce 2023
Get expert ecommerce insights and ecommerce trends that will shape 2023, using global online shopper statistics and fraud trends to bring tips for ecommerce leaders looking to uplevel their commerce strategies.
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