In 2020, the sales generated by e-commerce exceeded the one billion euro threshold in Luxembourg, or an annual growth of 20% according to the estimates of Statista presented on Tuesday evening by eCom, the Luxembourg Digital Federation during a conference organized at the Chamber of Commerce.
It’s no secret that health restrictions induced by the Covid-19 pandemic have benefited digital businesses, as confirmed by Jacques Lorang of Luxcaddy.lu and Nicolas Gueuzurian of Auchan Retail Luxembourg.
Covid has enabled networking between digital and physical sales channels.
“Covid enabled the connection between digital and physical sales channels,” explains the e-commerce director of Auchan Retail Luxembourg who, until then, had rather observed a separation of the two customer segments. With Covid, his company launched at short notice in the delivery of home shopping and then, in 2021, in the sale of non-food goods through a dedicated platform: shop.auchan.lu. “Covid was clearly an acceleration in the ability to convert customers who had accounts and didn’t order,” admits the manager.
However, many customers remained dissatisfied with overwhelmed online platforms, unavailable delivery slots, and products that were becoming scarce in the face of the explosion in demand. This is particularly the case with Luxcaddy.lu, a pioneer of online shopping active since 2007. Its co-founder, Jacques Lorang, admitted that despite doubling its turnover in 2020, the time was not at the party for its SMEs.
Today it faces many challenges such as trying to win back loyal pre-Covid customers, converting the “death accounts” opened by prospects during the pandemic who – due to lack of slots – could not place orders, improve quality and innovate, but also revive the marketing which had been suspended for two years.
Physical trade remains in the lead
And then at the beginning of 2022 another disruptive element appears: inflation, which is pushing consumers to buy less and postpone certain purchases, as Brice Lecoustey of the EY company pointed out. Five consumption trends have emerged from the two years of crisis, focusing on sustainability, value for money, experience, health and society.
Having a stock and allowing the customer to start directly with his purchases today has a real added value.
The pandemic has also awakened new habits, such as that of “click & collect” which, however, requires an adequate customer experience, underlines the partner of the consulting company. Furthermore, the consumer is above all a human being: all interlocutors agree that physical trade will continue. “Having a stock and allowing the customer to go directly with his purchases today has real added value”, comments Brice Lecoustey.
E-commerce accounted for 8% of its annual sales in Auchan Luxembourg in 2021, a dynamic that only needs to grow, but faces some challenges: building much stronger customer trust capital, improving logistics infrastructure , but also to stimulate competition. “I need more merchants to digitize their offering to create customer feedback,” says Nicolas Gueuzurian.
Currently only the Cora, Colruyt and more recently Match brands are active in the drive-through segment dedicated to food shopping. Market leader Cactus has abandoned the delivery service [email protected]
while Delhaize Luxembourg recently excluded an online presence, favoring physical stores.
“We are not heading towards a wave of e-commerce, but towards consolidation,” admits Brice Lecoustey. Clearly, Luxembourg is lagging behind with a weight of online trade of 1% compared to five times higher in the EU. Of the € 870 million spent online in 2019 in Luxembourg, 20% was spent with merchants based abroad. “If there are so many purchases on foreign sites, it is because there is a potentially unsuitable response from Luxembourgish traders,” concludes Nicolas Gueuzurian.