The Covid-19 pandemic proved to create the right environment for growth of the e-commerce sector, which in many instances led to the digitization of business and implementation of various modern technologies. The crisis resistant e-commerce sector contributed to increased innovation and fuelled the entire economy, while at the same time positively affecting the commercial property market, promoting growth of the industrial and logistics sector, stimulating the courier service segment, and affording a new dimension to the modern, post-pandemic retail industry as a whole. Experts at BNP Paribas Real Estate take a closer look at those implications in the “E-commerce, evolution or revolution” report.
As per the latest estimates, the volume of online sales achieved in the first year of the Covid-19 pandemic only stand at approx. PLN 83-100 billion. This translates into a possible e-commerce turnover increase by even 60%. It should be pointed out that comparable online sales results for consumer goods were achieved a decade ago when e-commerce was just entering the phase of rapid growth. The most optimistic forecasts state that by 2026 the share of e-shopping in the total value of retail sales will reach approx. 12-15%, while the value of the e-commerce market will exceed the PLN 160 billion threshold.
The experts at BNP Paribas Real Estate stress in their report that the growth will be stimulated not only by new technologies and development of new e-commerce tools, but also by one of the fastest growth rates recorded in EU countries in terms of the number of Internet users. Forecasts predict that by 2025 the Internet penetration rate could exceed 90% of the adult population. A crucial phenomenon observed in the past few years—and one that has become even more pronounced during the pandemic—is the dynamic pace of growth of the group of e-consumers in Poland as compared to the more developed markets. While in the past five years the e-consumer community in the countries with the most developed e-commerce sectors has grown by a dozen or so percentage points, in Poland this increase amounts to 24%, with the number of e-shoppers rising significantly by 7 percentage points in the last year only. The authors additionally point out that 2020 was a year of e-consumer debuts. On average, one in ten Polish Internet users went shopping online for the first time, and, equally importantly, the e-consumer community was joined by senior citizens, i.e. those over 55 years old.
The survey data shows clearly that the Covid-19 pandemic has substantially contributed to the strengthening of the e-commerce sector. Nearly one third (28%) of today’s e-consumers are considering the option of “online shopping only” and not going back to brick-and-mortar stores once the health crisis has come to an end. At the same time, the various restrictions imposed on retail show that the traditional shopping experience while visiting brick-and-mortar stores will not become irrelevant too soon. Accordingly, 60% of internet users declare that they will shop at traditional stores more often, with 36% declaring that while they intend to visit brick-and-mortar stores more often, they will not give up on internet shopping following the end of the pandemic.
Retail and e-commerce
Estimates show that approx. 20-30% of traditional retail turnover that moved online as a result of the pandemic will remain in the e-commerce sector for good. This trend can be most clearly observed in the food segment, where grocery e-shopping was not particularly popular prior to the Covid-19 pandemic. Research shows that 28% of Polish Internet users shopped online for groceries last year, which translates into a 65% increase in the number of e-consumers in this sector.
The pandemic has clearly made us less attached to the traditional way of doing our grocery shopping. It is obvious today that grocery e-operators quickly dealt with the homework given to them early in 2020 by working on expanding the range of goods and services offered by them and ensuring the availability of products, as well as resolving the issue of efficient deliveries. And when you add to this consumer preferences shifting towards quick and convenient daily online shopping, it looks like the e-grocery segment has the best growth prospects for the coming quarters
Małgorzata Fibakiewicz, Head of Business Inteligence Hub and Consultancy, BNP Paribas Real Estate
One of the effects of the successive lockdowns and the various restrictions imposed due to the Covid-19 pandemic was the redefining of the online sales channel by the majority of brands that for many years have to an overwhelming extent operated at brick-and-mortar stores. E-commerce is no longer seen just an additional way of promoting a brand; to the contrary, it has become an effective sales tool valued in the business puzzle. During the first lockdown only, brick-and-mortar store operators running simultaneous e-commerce operations recorded a turnover double in value of their previous e-commerce sales. The consumer electronics sector reported as much as a five-fold increase in the volume of purchases made online. Some brands took the decision to launch sales via the so-called marketplace platforms. During the first wave of the pandemic, the highest increases were recorded in the following categories: clothing and footwear, consumer electronics and household appliances, and books and furniture.
More convenient and closer to home
The Covid-19 pandemic has contributed to acceleration of the various processes taking place within the retail industry. It showed us the increasing importance of technology, digitization, the pace of life, localness, mobility and availability, as well as the consumer awareness rising from year to year. These are the aspects that will have the deciding voice in shaping and changing the retail sector in the nearest future. The crisis brought on by the coronavirus put the older retail formats to a tough test, while at the same time serving as a springboard for success for small retail parks and local convenience centres. Discount chains emerged as winners here with customers valuing their proximity to home and the ease and convenience with which they can do their shopping there. The experts at BNP Paribas Real Estate stress that while as recently as five years ago only 11% of the total volume of new supply was accounted for by retail parks, in 2020 as much as half of the new space was delivered to the market in this format, and forecasts for the coming years predict that this trend will continue.
The logistics and industrial market benefits
Operacje w nowoczesnym e-handlu, skracanie łańcuchów, coraz szybsze dostawy (tzw. quick commerce) i robotyzacja wymagają sprawnie działającego i dobrze zaplanowanego rynku powierzchni przemysłowych, logistycznych i magazynowych. Kilkanaście miesięcy pandemii pokazało, że polski rynek wzorowo zdaje egzamin i wyrasta na jedno z głównych centrów dystrybucyjnych w Europie
Igor Roguski, Head of Industrial and Logistics, BNP Paribas Real Estate
Modern warehouse space of high quality, the continued good availability of land to be developed, qualified workforce, the large domestic market, lower labour costs, and the numerous incentives offered by the local authorities and the economic zones are among the strengths named by the experts at BNP Paribas Real Estate.
The authors calculated that in the past five years, the e-commerce sector and operators supporting the different e-commerce processes accounted for approx. 25-30% of the total net demand recorded, which means that they signed leases for a total of approx. 4 million sqm of modern space. Of the top ten leases concluded since the beginning of 2017, five were signed by e-commerce tenants (shopping platforms). Amazon is the leader here: it has leased more than 1 million sqm of space since the beginning of 2013.
It follows from the report that digitization is now representing the irreversible future for modern logistics. By collecting and analysing data, we will be able to make better use of mobile devices, predict what operations will be performed and when, as well as to take better care of the environment.
Buildings and structures used for logistics purposes will gradually attain the qualities of semi-autonomous facilities. This means a prevalent presence of highly advanced digital technologies, including AI solutions
Prof. Wojciech Paprocki from the Department of Business in Transport at the Warsaw School of Economics
A not-so-distant future
The pandemic has shown that the successful operation of the traditional retail sector is intricately linked to implementation of an omnichannel sales strategy in which e-commerce is playing an increasingly crucial role. The transformation of retail will be taking place in an environment with various coexisting solutions and tools, the sum of which will provide a qualitative shopping experience and enable efficient delivery, exchange and return of goods. The new retail reality will entail development of new retail and logistics concepts, with an increasing number of them gradually moving closer to urban centres. To some extent, retail properties may be converted into logistics facilities, with the former not being able to compete in the post-pandemic time with schemes that, despite adverse conditions, invested significantly with the aim of offering consumers an improved service. The future could also belong to the so-called “dark stores”, i.e. shops where instead of paying attention to the décor, emphasis is put on whether consumers are able to quickly pick up the goods ordered.
