E-Commerce Report Switzerland 2020: Management Summary

July 1, 2020 Prof. Ralf Wölfle, Study Director, University of Applied Sciences and Arts Northwestern Switzerland (FHNW)

The networked world of commerce is the new normal. Commerce in Switzerland in 2020: Broad diversity of offers and purchase channels. Staying competitive in the networked world of commerce.

Extract of the Management Summary of the E-Commerce Report Switzerland 2020

The E-Commerce Report Switzerland study series tackles the influence of digitalization on the development of industry structures and business models for the sale and distribution of products and services to private consumers. This latest report takes its findings from the twelfth comprehensive survey of 35 e-commerce and multi-channel providers that potentially define the market in Switzerland. These findings are primarily derived from expert opinions.

2019 – An average year before the storm
Compared with the turbulent start to 2020, 2019 was a decent, average year according to the participants in the study panel. Online spending by Swiss consumers was up 8.2%. While that was a smaller increase than the 10% recorded for the previous year, it remained a marvellous performance compared with the 0.3% growth posted by the Swiss retail sector as a whole. For the first time, providers based abroad grew at a slower rate than those in Switzerland. Whether this marks a turn in the tide remains to be seen. The participants in the study panel, which is not a representative group, achieved average growth of 12.8% in 2019. This corresponds exactly to the median of the past ten years.

A more differentiated picture is provided by the sales performance of the 242 members of the Swiss Association for Distance Selling (VSV), which is a more representative indicator for the physical consumer goods market. These sales figures reveal that the proportion of businesses participating in market growth is becoming ever smaller. In 2019, only around half of VSV members achieved growth of 1% or more, compared with 57% in 2018 and 67% in 2017. The figures also show that large providers are significantly outperforming their smaller counterparts.

Commerce is all around
Figure 1 is a schematic view of the Swiss commerce environment in 2020. Vertically it shows a continuum comprising three types of purchase, with the centre representing the most frequent type of purchase by volume within long-term provider/customer relationships and with more sporadic purchasing depicted down either side. The key retail formats are allocated to these three areas, along with an indication of the typical channels used in each case. It is clear that it is not possible to differentiate between online and offline purchases.

The top half of the diagram assigns typical perceptions and patterns of consumer behaviours to the three areas. With regard to customer behaviour, what is clear is that use of digital platforms has become important throughout the entire world of commerce. This reflects a significant driver of the sustained transformation process occurring in distribution.

Consumer behaviours are providing clues as to what matters to consumers. While brands tap into the consumers’ search for identity, fast-fashion providers play on the joy of bargain hunting. In the middle, consumers are primarily concerned with meeting their day-to-day needs, reliability and simplicity. The blue ellipse shows the degree of familiarity within the business relationship. Where providers are also able to create confidence, they can start making use of data to develop increasingly user-friendly services for their customers.

Consumers are always on. Manufacturers, brands, wholesalers and retailers are online, touchpoints are connected, whether on the internet or in the physical world.

The networked world of commerce is the new normal.

Commerce in Switzerland in 2020: Broad diversity of offers and purchase channels.