The downturn in online retailing of goods may have bottomed out. The assocication Bundesverband E-Commerce und Versandhandel Deutschland (BEVH) expects nominal growth of 2.0% for the current year to around 81.3 billion euros (previous year: 79.7 billion euros). After strong growth in the pandemic years 2020 (+14.6%) and 2021 (+19.0%), when consumers bought less in brick and mortar stores but increasingly online, the past two years saw significant declines in online revenues of 8.8% and 11.8% due to the return of customers to physical stores. Thus, 2023 was the first year in which gross merchandise volume with goods decreased by double digits. The association attributes this to the lower willingness of consumers to spend.

If the association's forecast comes true, 2024 will mark the end of the downturn, even if "at best, zero growth" is expected in real terms, as Martin Groß-Albenhausen, Deputy Managing Director of BEVH, stated at the annual press conference. "We have not yet returned to the long-term growth path in e-commerce," admitted Gero Furchheim, Chairman of the Board (President) of BEVH and CEO of the design furniture retailer Cairo.

According to the information, the share of e-commerce with goods in the total retail trade (including groceries but excluding pharmacy sales) fell to 10.2% (previously 11.8%) last year. In the pre-pandemic year 2019, it was 11.5%, according to Furchheim. In 2023, the negative impact was due to the strong online trade in clothing and entertainment products, as consumers in Germany saved particularly in these product categories. In contrast, there is much potential in fast-moving consumer goods (FMCG).

The recovery in digital services such as holiday bookings and concert ticket sales has weakened, as stated by the BEVH, increasing only by 12.7% (39,9%) to 12.7 billion euros.

All in all the industry's turnover in the entire e-commerce sector (goods and services) was below the 100 billion euro mark for the first time since 2020, at 92.4 billion euros. The association draws hope from the fact that the fourth quarter of 2023, with a decline in revenue from goods of 7.1%, was the first quarter with only a single-digit decrease since the second quarter of 2022 (–9.6%). This indicates stabilization. However, the base effect can be misleading here: In the fourth quarter of 2022, merchandise revenue fell by 18.1%, the largest decline ever. This low comparison base skews the value for 2023.

For the breadth of retailers, 2023 will be remembered as a "decisive" year, as per the BEVH. D2C (Direct-to-Consumer) distributors have maintained the most stable growth in the long-term perspective. While sales fell by 11.1% last year, they are currently 62% above the pre-pandemic value of 2019. Marketplaces (–8.5%) and online retailers (–14.7%) also remained significantly below the previous year's results in 2023, but still 19.0% and 7.0% above their pre-pandemic values, respectively. The declines were most pronounced in multichannel retail (–18.1%). These are primarily stationary retailers who have only recently entered the e-commerce market. It became apparent for them that customers were increasingly using brick and mortar stores again.

Customer activity in online retail continued to decline last year. According to the information, the share of regularly active online customers who made a purchase within the last seven days fell to 34.3%. This is significantly less than in 2019 when the average share reached around 40%. Nonetheless, the value of the average shopping cart is increasing. It is also noticeable that impulse purchases, which are important for the industry, are decreasing more and more.

However, there are cautious signs of improvement in the order frequency per customer, as evident from the share of repeat buyers who made more than one purchase within the last seven days: The value initially dropped by around ten percentage points since the first quarter of 2022, has remained stable since then, and has been slightly trending upwards for three quarters to 35.9% most recently.

The willingness to buy cheaper but well-maintained used goods is now pronounced among younger people and families, as per the association. Among 19- to 29-year-olds, 18.4% of respondents stated that they "frequently" and 31.9% "occasionally" order used products on the Internet. A similar acceptance was also observed among 30- to 39-year-olds, with 11.7% and 40.1% of respondents mentioning these respective categories.

Skepticism about cheaper foreign providers is also decreasing. When asked whether customers (of all age groups) are willing to shop at foreign shops if the prices are lower, 22.1% "fully agree". This is significantly more than in the comparison measurement of 2022 (16.8%). The numbers are based on the evaluation of a weekly survey of 40,000 consumers throughout 2023.

According to Lars Hofacker, Head of the E-Commerce Research Department at the EHI Retail Institute, the ten largest e-commerce shops have accounted for about one-third of online sales in Germany for many years. Nevertheless, 2023 showed that companies in lower positions are catching up. His impression: "The signs point to consolidation" – especially as profitability is under pressure due to rising costs.

Regarding the wishes of e-commerce companies, BEVH Managing Director Christoph Wenk-Fischer made it clear that reducing bureaucracy and less regulation are the most important concerns. Online retailers in Germany complain, for example, about the low enforcement density of agreed regulations at the European and global levels, while Germany is the "world champion in implementation," and local companies are disadvantaged as a result.