European retailers of cosmetics and household goods are vulnerable to disruption from online retailers, according to a new report from Scope Ratings.
The credit rating agency says that bricks and mortar retailers in these sectors are among those most at risk of losing business to ecommerce rivals. Scope measures the potential growth of online in any given category with a ‘maturity threshold’ – this is defined as consumers’ preference to buy online compared to the extent to which they already do so.
“The gap between the two factors indicates how much more potential development there is for e-commerce in each segment,” says Scope Ratings analyst Adrien Guerin. “In other words, we can see the growth potential for online sales—and downside risk for bricks-and-mortar retailers.”
The cosmetics and personal care sector has high potential for digital disruption, sharing a number of characteristics with the fashion sector where online penetration is already high. According to Scope, around 40 per cent of customers are prepared to shop for their beauty products, but only 22 per cent currently do so.
There is even more potential for change in the furniture and home appliances sector. Again, around 40 per cent are prepared to shop online, but only 13 per cent do so at present. Improvements in augmented reality technology, allowing shoppers to picture items in their own homes, are expected to lead to substantial uptake of online options.
Scope has published its findings in its report Resisting the e-commerce whirlwind: A comparative study of the US and European retail sectors.