Europe’s Retail Industry Transformation

How adoption of online shopping impacts and accelerates the increasing demand for urban logistics

The retail industry has undergone a significant digital transformation in recent years, with the Covid-19 pandemic serving as a catalyst for the increased adoption of e-commerce. This trend is reflected in the 2021 data, with European e-commerce sales reaching €718 billion, a growth of 13% from the previous year’s €633 billion. The continued growth of e-commerce highlights the ongoing shift towards digitalization in the retail sector as consumers increasingly embrace online shopping.

Consumers’ desire for a more personalized and convenient shopping experience has also grown, and retailers are responding by leveraging data and artificial intelligence to offer highly customized product recommendations, promotions, and advertisements. In addition, logistical efficiency plays a crucial role in delivering a seamless and effortless shopping journey. The growing demand for online shopping has resulted in an increased need for logistics space in cities to support the delivery of goods and accommodate the growth of e-commerce. As a result, the demand for urban logistics space is expected to rise, presenting opportunities for businesses in the logistics and supply chain management sectors.

As Europe’s urban population continues to grow, with an estimated 414 million people, or 80% of the population, residing in cities by 2050, shopping habits and behavior will continue to evolve, and retailers who are able to meet these demands will have a competitive advantage in the market.

Some of the key factors influencing retail logistics in the EU are

  1. Last-mile facilities: Last-mile delivery accounts for a significant portion of online distribution. A recent analysis of hub and spoke distribution networks in the UK and mainland Europe found that 20-25% of distribution space is dedicated to last-mile facilities.
  2. A growing demand for urban logistics space: The growth of online retail sales is directly linked to the demand for urban logistics space, with each €1 billion of online retail spending requiring approximately 24,000 sq m of such space.
  3. The continued expansion of e-commerce: The top seven e-commerce markets in mainland Europe, which include France, Germany, Italy, Spain, Netherlands, Sweden, and Poland, currently have an average online penetration rate of 15.6%. This rate is expected to grow to 19.3% by 2026, reflecting the continued growth of e-commerce in these markets.
  4. The Expansion of Online Sales Leads to an Increased Demand for Last-Mile Logistics Space: With the anticipated growth of the top seven e-commerce markets in mainland Europe (€142 billion, or 48%, over the next five years) the need for efficient and effective last-mile delivery strategies will become increasingly important. This is highlighted by the estimated additional requirement for last-mile logistics space of 3.5 million sq meters, which is crucial for ensuring the seamless delivery of products to consumers.

Due to this anticipated growth and expansion, retailers will face major logistical challenges, which is why many are turning to experts like SHAOKE for support. Through a comprehensive network of warehouses at critical locations, last-mile delivery providers at strategic locations, a wealth of local knowledge and professional experience, SHAOKE has been able to help businesses navigate the challenges posed by urban growth. With a commitment to cost reduction, stability, and efficiency, SHAOKE has earned the trust of major players in logistics, leading omnichannel brands in the 3C and fashion industries, and rapidly growing direct-to-consumer sellers. To date, the company has successfully delivered over 200 million parcels and operates from five global offices with 220,000 sq. ft. of self-owned warehouse space.

Companies like SHAOKE play a vital role in the success of businesses by providing comprehensive logistics solutions in the face of rapidly growing urban populations in Europe. With the demand for efficient and effective delivery services increasing, SHAOKE has positioned itself as a leading provider of logistical support.

Related Articles

SHAOKE participates in the first Dragon Boat Festival in Frankfurt

Meet the Team: Jack Wang, Project Manager

Exploring the different levels of logistics: from 1PL to 5PL