The big platforms are growing in might and are able to gain control over the Dutch and Belgian online retail as well. Non-food retail now finds itself on the eve of a new battle, ING writes in a new report.
Openness of the retail market in jeopardy
In some markets (like the American and the Chinese, but also the German market), the online non-food retail market is already dominated by a few major online market places such as Amazon, Alibaba and Zalando. In the Netherlands, that market is currently still fragmented and open, but all that may soon change, ING analysts conclude in a new report.
"Our country finds itself on the eve of a new battle in online retail, now that international platforms are approaching the Netherlands. Simultaneously, our research shows that Dutch consumers are open to committing themselves to big platforms. By 2025, one or two platforms will be dominating online non-food retail in the Netherlands," says retail specialist Dirk Mulder.
30 to 40 % market share
Expectations are that the percentage of online commerce in Dutch non-food retail will grow from 25 % to 35 % between 2018 and 2025. Not everyone will be able to enjoy that growth: consumers seem increasingly willing to commit to one single fixed platform, and so ING expects that one or two of these will be dominating the market by 2025. They will represent a whopping 30 to 40 % share of the market.
Consumers are beginning to like online shopping more and more: half of the thousand people that responded to ING's questionnaire agreed that online shopping has become more attractive in the past three years. They appreciate the comfort, the competitive prices and the large product range of online platforms. As a result, consumers become more loyal and willing to fill up their shopping carts on a single platform that offers a wide range of products. 55 % choose a steady, familiar web shop and 40 % would be willing to make all non-food purchases in one and the same shop.
Consumer becoming very dependent
The trend, which ING calls 'platformisation', brings with it both advantages and disadvantages, according to the report. "Platforms can contribute to efficiency in the very fragmented retail industry of the Netherlands. They help to balance supply and demand and join together logistical flows. Unfortunately, there are also downsides. Local retailers will be put under serious pressure if they can not distinguish themselves sufficiently through their store formulas and/or their products. Platforms render the market completely transparent."
The ease of a one-stop-shop is also a possible trap: "Consumers are rid of all their worries. The platform guides them through the range. But at the same time, platforms can further expand their position using all the data they acquire this way. In time, alternative suppliers will be overshadowed and the consumer will become very dependent of the platform."
Although the ING research was limited to the Dutch market, its conclusions can be translated to other markets where online retail is currently still fragmented, such as Belgium. How can Belgian and international retailers stay relevant and ensure their position in the market? Find out on the RetailDetail Omnichannel Congress on 31 January. Click here for more information and for the last available tickets.