News Article

Webshop Saturation Resulting in Bigger Online Platforms

Sales & Trends

AMSTERDAM, the Netherlands – Switching to omni-channel is currently ‘the name of the game’. Such a distribution strategy includes operating webshops. Here some reservations are needed to be made. Especially when this takes place in the Netherlands, as a recent study revealed. But is the situation in the Netherlands indicative of what is happening in other EU countries or what is to happen there too?

Webshop Saturation Resulting in Bigger Online Platforms
Webshops, in particular the ones operated by small to medium-sized businesses, increasingly resort to online platforms. – Photo Shutterstock

It is constantly getting busier on the internet. As a result, it is no longer obvious that you reach the people you want to reach via a site or webshop. The Netherlands currently counts some 80,000 webshops on a total population of some 17 million. It results in one webshop per 214 inhabitants on average.

Webshop saturation

According to market researcher ‘Dataprovider’ it’s a concentration which currently is unique for the world. However, such a concentration resulting in saturation is likely to happen in other countries too. In particular as it is cheap and easy to start a webshop.

Substantial marketing budgets needed

In addition to the 80,000 webshops, the Netherlands has some 2.5 million active sites. This means that there are on average 7 Dutch people per website. According to Dataprovider, this means that if you start a webshop, people will not automatically visit your site. You need substantial marketing budgets to online reach the people you want to reach. Of course, this is where Google Ads comes into play for reaching out to targets groups. But this requires bigger and bigger budgets as there’s a growing need to do more to reach out to potential customers.

Low costs

That there are so many webshops in the Netherlands today is due to the fact that making a webshop hardly costs anything. It makes it likely that the number of online shops is to grow in more countries. Wix.com is a platform where everyone can make a webshop for a few US dollar. Wix.com has millions of customers around the world.

Too many webshops

According to the research by Dataprovider 43 percent of the 80,000 Dutch webshops show hardly any activity. However, 33 percent of them are very active. These 27,000 have to fight for every visitor. In particular as it involves a potential ‘audience’ of only 640 inhabitants of the Netherlands per shop. On this basis the research bureau concludes that there is saturation; that there are too many webshops. The saturation results in fewer being active and these are in particular the webshops operated by small to medium-sized (SME) businesses. At the same time, the already large online shops are getting bigger because people prefer large and well-known brands.

Resort to online platforms

Dataprovider’s research also sketches a situation of webshop operators who, due to ever increasing marketing budgets, resort to online platforms. Like Bol.com which is known by everyone in the Netherlands. Such online platforms are gaining popularity among the operators of webshops by SMEs because they offer a good and above all safe service in terms of payments and distribution. This is a trend expected to grow rapidly in the coming years. More and more webshops that use a platform like Amazon. In particular when Amazon (and Alibaba) become seriously active in the Netherlands as well as in other European countries.

‘Attacking the Amazon Issue’

At Last July’s Bike Europe Conference on “The Scenes Behind Online Sales” Scott and Adrian Montgomery from CrankTank Business Intelligence painted the current picture of online sales in the US and draw parallels of trends that could also arrive in Europe. They claimed that direct-to-consumers (DTC) sales strategies have firmly arrived in the US. They illustrated that with how Nike views DTC (the company’s online sales increased 34% in 2017). The world’s biggest sports company believes that “Digital (online) is the foundation of today’s shipping experience.”

The CrankTank Business consultants furthered with “Shifting to DTC is about making a plan; hiring a dedicated ecommerce specialist; DTC & B2B must work together and marketing budgets must be in place to support the new strategy. DTC is also about digitally auditing of your brand while the ecommerce platform needs to integrate with other used platforms.”

Next to all this the two CrankTank consultants emphasized that you also need to plan your Amazon strategy. In particular as Amazon is having a massive impact on the US market and will also grow in strength in Europe. “Key is that Amazon now handles 44% of all online sales in the US. It has arrived in Europe too. It means for you to hire people that have experience with Amazon; learn to deal with it as this online monster is coming. But Amazon also offers opportunities by having a small presence that could lure customers to your own online platforms. Attack the Amazon issue!”

Comment on this article