Catching up with lions:
the dramatic growth of e-commerce in Italy
"The results of the research provide us with interesting insights about where Italian e-commerce stands today, and what we can expect from it in the near future. The consumer's responses on their online shopping preference confirms what we experience on the market, companies' websites are rapidly growing as merchants feel more confident to rely on strategic payment partners, such as Checkout.com.
On top of that, it emerges from the research that the optimization of acceptance rates, the ability to offer the preferred payment methods and high security standards are essential elements for merchants to thrive in the digital economy; as Checkout.com we are able to accompany them in this journey and grow globally."
After a long lag period, Italy has reached the same levels of Internet usage as other European countries, according to research promoted by Dagorà.
What does this mean for e-commerce? What are the drivers of online shopping in key business sectors? What payment methods are most widely used? And, finally, do customers feel safe regarding security and privacy while shopping online? These topics – among others - were covered on May 10th at a panel discussion featuring Daniele Panato (Dagorà), Gabriele D’Elia (Checkout), Ayoub Lefhim (Grandi Navi Veloci) and Karsten Baltisberger (Mastercard).
The event offered an opportunity to present the results of a study conducted by the Lifestyle Tech Competence Center in March 2023. Over one thousand Italian e-shoppers aged 18 and up were surveyed about their online shopping experiences in the previous twelve months. Let’s jump into the key findings.
Internet usage: Italy has filled the gap
Italy has changed dramatically in the last ten years, data shows. The country has finally filled the digital gap and nearly caught up with other European countries. Whereas in 2012 only half of the total Italian population was using the internet (compared to an EU average of 72%), this number increased to 85% in 2022 (compared to 92% in Europe as a whole): an impressive 29-points increase. In 2017 alone, Italy saw a 17% jump in Internet usage; the result of a combination of factors including the implementation of a digital strategic plan, the wide adoption of smartphones and the expansion of 4G coverage.
According to Eurostat, the statistical office of the European Union, 91% of Italian households enjoyed Internet access in 2021, either through landline or mobile devices. The Internet diffusion can now be considered massive.
This diffusion of course led to an increase in frequency of online accesses: breaking down the data, researchers found that younger generations (gen X, Y and Z) are fully aligned with EU internet usage levels, with more than 95% of this group of younger Italians online at least once a week. Things change when it comes to baby boomers (people born from 1946 to 1964), where frequency drops to 68% vs the 75% of the rest of Europe.
With specific regard to e-shopping, Italy is still running behind Europe, but is growing at a faster pace. Online shopping increased by double-digits in the country in 2020 and continued to grow with speed in the following years: e-commerce peaked in Italy in terms of share of sales after the pandemic, while the rest of Europe returned to 2019 levels.
Why do customers shop online?
One in three Italians is a frequent online shopper, with an average of 8.2 purchases per month. Among the reasons for choosing e-commerce, price advantage is by far the most mentioned among all generations. Special promotions and wider choice seem to be important factors, too.
Specific subgroups appreciate product reviews and detailed product descriptions available on the internet, the option to choose different delivery methods and the fact that in person shops selling similar items are out of reach.
A preference for generalist e-commerce platforms
Where do Italians like to shop online? The vast majority (86%) prefers generalist e-commerce platforms, data shows. The figure is close to frequent shopper’s (83%). Other channels (specialized platforms, social media platforms, specific brand websites, small retailer sites, private announcements posted online) lag far behind.
Brand official websites show much room for growth. Currently, 24% of online shoppers (and 31% of frequent online shoppers – people who purchase at least once a week) shop directly at specific companies’ websites. There is room for growth for brand’s official websites, mentioned by 24% of the total with an increase to 31% among frequent shoppers (people who purchases at least once a week). This channel is the most cost-effective for companies, allowing them to disintermediate and monitor customers’ patterns, which may be strategic for future business decisions.
PC and smartphones, the game ends in a draw
The survey shows that consumers tend to shop on their smartphones and PCs at approximately the same rate. Women tend to shop on their PCs more frequently than do men. Notably, tablets are a popular shopping device for frequent e-shoppers. Omnichannel behavior is now extremely common. In many product categories (fashion, cosmetic/personal care, electronics, food and beverages), customers make their purchases both online and offline. Compared to other categories, travel and transportation show the highest online spending by far. Breaking down the data, generations show a different spending attitude among the categories, though.
Social media shopping is still not very popular; amongst e-shoppers, just about 25% make purchases through their social media accounts/on social media sites. This trend is increasing in Gen Y and Gen Z populations, but the shopping experience is still perceived as sub-optimal; in fact, one fourth of social media shoppers express dissatisfaction. Live stream shopping is still in the early stages/ relatively uncommon but projected to grow.
Payment methods
Digital Wallets were confirmed as to be the most used payment method for online purchases (68%), with a strong component represented by PayPal (61%), followed by payment cards. Among payment cards credit cards leads with a 46% of usage. The adoption of buy now/pay later solutions and crypto currencies is still very limited. Crypto currencies are not currently used as payment methods, and there seems to be little effort to implement them in the future.
Security and privacy
PSD2 imposed stricter rules for authentication. Across all targets there is great confidence in the security of online payments (77% of users surveyed) and very few concerns, although almost one fourth (23%) did express some hesitancy. When it comes to privacy, this sense of security is lower, and researchers found polarized opinions, with 60% feeling pretty secure about the safety of their personal data, but 40% expressing concerns. The survey shows the importance of offering a wide range of payment methods, in order to avoid loss of sales.
Specific sectors
The study ends with a focus on specific sectors: fashion, cosmetics, electronics, travel, food, design and furniture.