UK shoppers embrace online more than the Dutch

20 April 2015

UK consumers are much more inclined to shop online compared to their Dutch counterparts across the North Sea, finds recent joint research from PwC and Strategy&, in which the behaviour of 2,000 British and 1,000 Dutch consumers is compared.

In the Netherlands 29% of the questioned consumers do the largest part of their shopping online. In the United Kingdom however this is nearly twice as many (56%). The British are also more likely to search online for products, and in 57% of British purchases, research into the product was initially done online. In the Netherlands the percentage (38%) falls considerably lower.

Where do you tend to shop

According to PwC and Strategy&, British retailers are more advanced than their Dutch colleagues, and with services like ‘click-and-collect’ are able to offer more sales channels. “In the Netherlands it is much less common to buy products online than in the United Kingdom”, comments Marc Diepstraten, partner and retail specialist at PwC. “The difference between the two countries is closely related to logistics. British retailers are better organised. Particularly in the areas of delivery times and delivery options. In Britain it is more common for products to arrive the same day as they were purchased, at a place of choosing.”

The difference in consumer shopping behaviour was highlighted again during the Christmas period. In the Netherlands 87% of online Christmas purchases were delivered to homes, while in the UK this was barely 14%. In the UK the majority of British consumers choose to have their products delivered to an alternative location, such as their work address, or to pick up their products themselves from the local store. Which illustrates the strong and inseparable relationship between the online and offline shopping experience in the UK, known as ‘omni-channel’.

Where is the majority of your shopping delivered?

Physical stores
Nearly three quarters (72%) of Dutch consumers indicate that the physical store is their preferred purchasing medium. The preference is driven primarily because physical stores offer the possibility of handling the products directly (27%) and to take it home directly (17%). Furthermore 15% just prefer the experience of shopping. In the UK this was 26%, 19% and 14% respectively for the top three reasons to prefer shopping in physical stores.

What are the main reasons for purchasing a product in the store

In earlier research from PwC it was found that consumers are particularly interested in buying furniture, clothing and daily shopping in physical stores. For electronic and household devices and furniture, a clever multi-channel approach could potentially lead to improved figures physical store purchases. Research in store and purchase online is largely suitable for clothing purchases.


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Consumer goods start-ups grow interest from venture capital

23 April 2019

Funding the latest consumer goods start-up has been a real money-spinner for venture capitalist firms, with a number of $1 billion companies – or unicorns – having emerged in the space in recent years. New analysis has explored the resulting corporate consumer products activity in the acquisitions space.

Consumer products have enjoyed years of strong growth as new markets opened in developing Asia. China in particular has enjoyed strong growth across a range of consumer good types as the country’s middle class expanded. Private equity firms have been keen to pick up targets in the space as they expand their portfolios to include additional local capacity as well as customers in new markets.

As a result, a study from Bain & Company has found that interest from PE firms in the consumer product space grew sharply in 2018, hitting 6.1% of all invested capital for the year, and making it the third most sought-after category. It is now only behind financial services (23.9%) and advanced manufacturing and services (13.9%).

Corporate venture capital investment

The ‘M&A in Disruption: 2018 in Review’ research found that growth in the segment reflects key changes in the segment as a whole. This is particularly true of insurgent brands, which often leverage local expertise in order to take on international giants in domestic markets.

Short change

The market changes have led to shifts in motivations for consumer goods company investments from PE firms. The number of strategic investments stood at 50% in 2015 compared to deals that increased scope. This has shifted significantly, with 34% of deals focused on strategic outcomes in 2018 compared to 66% for scope. The move towards scope reflects companies seeking out fast-growing products that enable stronger revenue growth streams.

Acceleration in scope-oriented M&A in consumer products

However, there were other motivations for deal activity in the space. Activist investors have put pressure on companies to expand their portfolios in recent years, with the trend expanding from just US targets to Europe.

Further trends

The other key shift in the space regards outbound deal activity. The study found that outbound deal activity has increased significantly in the Americas (up 363%) with total deal volume up only slightly (15%). Key deals included Coca-Cola and Costa, Procter & Gamble and Merck’s consumer health unit, and PepsiCo and SodaStream. In the Asia-Pacific region, outbound deal activity rose 195% while total deal activity fell sharply, by -36%. The EMEA region saw both a sharp decline in outbound deal activity, at -68%, as well as lower overall deal activity, which fell by 32%.

Cross-regional deal making

Deal-making in the current environment is increasingly fraught with uncertainties, as business models change on the back of new technologies, new consumer sentiments and wider market changes from new entrants. As such, acquisitions are increasingly useful as possible hedges on changes in market direction. As such, companies are increasingly pressed to take a future-back position, making sure to incorporate a vision of how the company needs to look in five years into acquisition strategy.

The firm notes that certain acquisitions which enhance a remembrance of a nobler mission, revive a sense of entrepreneurialism and engage directly with consumers may be necessary qualities in acquisitions that transform a company to fit market expectations in the coming decade. While going forward, focus on innovation, partnering with retail winners, reducing cost base and constantly reallocating scare resources will be necessary to protect market share in areas where insurgent local and strategic competitors are active.

Related: Private equity asset growth top priority for 2018.