Amazon with little dominance, a lackluster Black Friday, declining drive-thru sales… After two years of euphoria, online retail is suffering more from inflation than stores.
An unprecedented rejection for Amazon. The site may be less popular with French people for their Christmas shopping this year. This is the result of a study by the company Bonial, which asks consumers every year about their resolutions for the end of the year.
While in 2021 53% of consumers surveyed wanted to make some of their purchases on Amazon, this year only 47% said they did, a drop of 6 points, the largest of the entire Bonial panel. At the same time, E.Leclerc is up 4 points to 24% purchase intent.
Amazon remains a solid leader, but this decline is symptomatic of a more complicated year than expected for the online retail sector.
But with its low prices, fierce competition, price comparisons, the Internet had everything on paper to grab the lion’s share in this era of inflation and pressure on purchasing power.
A lackluster Black Friday
Since the beginning of the year, however, the opposite has been observed. In the third quarter, sales of online products fell again by 2%, according to Fevad, after a sharp 15% drop in the first six months of the year.
“This trend affects several major e-commerce sectors: fashion, decoration and beauty, which are back to levels close to those of the previous year, specifies the distribution association, while sales of electronic products recorded a further 15% decrease compared to the previous year 3rd quarter of 2021.”
If e-commerce stays above its pre-Covid levels, it looks like the wild years of double-digit annual growth are behind us.
Evidenced by the mixed success of Black Friday’s 2022 edition. So if, according to Fox Intelligence, the number of orders in the 10 days of operation increased by 6% compared to 2021, sales on the main day Friday, November 25, are down 2%. Another study by Webloyalty is even less favorable. According to their panel, which brings together the 37 largest e-commerce sites in France, compared to the 2021 period, the total volume of purchases made on Black Friday would have decreased by 14% and the monthly volume by 7%.
“With inflation running rampant, Black Friday 2022 was expected to come out at the turning point,” explains Rodolphe Oulmi, General Manager of Webloyalty. After the return to post-Covid normality in 2021, 2022 will be characterized by declining purchasing power in households and goods that are becoming increasingly rare.
The drive is backed up for the first time
Even more surprisingly, this dissatisfaction with e-commerce seems to be affecting the grocery sector as well. While hypermarkets, supermarkets and convenience stores should see sales increase with inflation, grocery e-commerce is likely to be the only channel that won’t make headway in 2022, according to NielsenIQ.
Drive-thru sales, which make up the vast majority of grocery e-commerce, should decline about 2% in 2022, a first since the concept’s inception. According to the projections of Consumer specialist Olivier DauversLeclerc Drive is expected to fall by 2% this year, Auchan Drive by 4%, Chronodrive by 9%… Only Carrefour and Auchan would manage to hold up, albeit with a weak growth of 1%.
“Despite its objective advantages (control of the shopping cart and its quantity, easy access to private labels, etc.), the drive-thru seems less convincing at a time when customers are looking for smaller shopping carts and even want to access as many promotions as possible first prices” , analyzes the specialist.
For the urban counterpart of the drive, the flight seems even more acute. After the euphoria of 2018 and 2019, pedestrian propulsion no longer seems to be successful. Carrefour and Auchan have almost completed their expansion.
More restrictive legislation and insufficient demand defeated this concept.
“The model is uncertain and no longer meets the requirements in terms of deadlines,” estimates Benoît Soury, director of Carrefour Proximité LSA. The costs are significant and the industrial tools to produce and automate jobs very quickly are not obvious.”
