While mass layoffs have so far been concentrated in the technology sector, this trend has spread to retail as well. Zalando will lay off 5% of the global workforce of 17,000 (850 workers); Ebay will cut 4% (500 employees) and Shopify will cut its workforce by 10% (1,000 employees). Even a giant like Amazon continued to lay off 18,000 jobs, paralyzing the construction of new logistics centers through 2024. Companies agree on the reasons for this: skyrocketing inflation has lowered consumer confidence and purchasing power. The ‘explosion’ in the pandemic process has come to an endwhen electronic commerce takes advantage of limitations to record its best figures.
“To grow at the same rate as during the pandemic months is not a realistic target because the scenario was completely exceptional,” says Francisco Aranda, head of logistics employers at UNO. in 2021 E-commerce in Spain reached 57 billion 700 million eurosAccording to data from the National Markets and Competition Commission (CNMC), it is 11.7% more than the previous year. A year ago, growth was 5.8%, reaching 51,600 million euros compared to 2019. There is still no exact data on the growth of e-commerce in Spain in 2022, but the decline at the regional level is already noticeable in the number of sales. E-commerce in Europe fell 2.2% in January of this year, according to the latest report from Interactive Media in Retail Group (IMRG), and the European association for E-commerce warns that “sales are normalizing and stabilizing from the previous year”. exceptional”. It should be noted that 24% of total purchases recorded in Spain in 2021 were made online, this figure exceeds the European average (16.8%) and the United States (14.6%).
“From the second half of 2022, we found that the growth curve of e-commerce started to slow down,” adds the head of the logistics association. This moment corresponds to a rise in inflation, a rise in central banks’ interest rates, and a scenario of economic uncertainty, factors that directly affect families’ disposable income and thus online purchases. They are already showing the change in the fashion industry: According to the industry’s employers’ association Acotex, online sales fell from 20% recorded in 2020 to 12% in winter sales.
The slowdown in e-commerce started to show itself At the beginning of the last quarter of 2022. “Last Christmas we saw people predicting their Christmas shopping based on Black Friday offers,” explains Andrés Fernández, director of commercial and marketing at logistics company Sending.
back to normal
Impact of all sectors, more on non-essential goodsproducts, such as technology products, fashion, sports equipment or construction materials, which are all in high demand during the pandemic period and have already fallen in sales. “Leaving the food thing aside, all these products that make sense to buy online have necessarily prevailed in order to deal with the reality of spending so much time at home during the pandemic.” Daniel Pastrana, B2C director of DHL Parcel Iberia.
An example is Zalando. The marketplace has been accumulating losses since the beginning of 2022, with the red figures reaching 35.4m euros in the third quarter alone. Amazon, on the other hand, closed the year with a loss of $2,722 million, compared to its record profit ($33,364 million) the previous year. Neither company responded to this environment.
In electronic commerce, the collapse of ultra-fast deliveries is striking. Glovo posted a gross loss of €304 million in 2022, causing its owner Delivery Hero to lose another €623 million. GoPuff decided to leave the Spanish market in the middle of last year due to declining sales, and Gorillas was eventually acquired by rival Getir. “It is logical that the volume will decrease with the return to normal and that not all companies established or established in our country at that time could maintain their business models,” says Aranda. The way to unify the volumes is through assimilation. “The industry is re-adjusting to the new post-pandemic realitythis is very different from what happened during covid,” he adds.
Part of this adaptation considers whether it is really necessary for this. delivery takes place in 15 or 20 minutes. “It’s a much smaller market than it looks,” Pastrana says, because the customer may be willing to pay an extra price for this type of service only in certain situations, such as fast food or certain needs at a certain time. If not, he adds, “buyers are highly sensitive to shipping costs, and the vast majority of consumers are willing to wait for delivery if they save on this concept.”
recovery in 2024
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Due to the slowdown in the global economy, companies, including e-commerce companies, are trying to stay ahead of the game. While logistics employers expect tough months, it’s too early to predict the impact: “There will be no growth years and real recovery could start to come in 2024As long as interest increases and inflation ease. “It’s hard to know how long this situation will last, given that it depends on external factors,” Pastrana says. Companies like Inditex, Asos or El Corte Inglés are taking measures to deal with economic uncertainty, such as charging for returns online or setting a minimum price for ordering.
What is clear is that Once this bump is overcome, e-commerce will continue to rise. “Most of the consumers who have started to buy online with the pandemic have consistently adopted this habit, so the share of online purchases is now much higher and the trend is that it will continue to increase gradually,” says Fernández. The way, according to GLS, would be to combine the online store with the physical store, as it “provides a more emotional and memorable experience for the consumer.”