casaleggio.it Report #20 May 2020 +35% 238,8 +47% 176,9 +53% 120,4 -18% 41,5 +56% 78,7 -20% 33,2 -11% 31,2 +59% 50,5 +2% 31,8 Digital Thinking E-commerce in Italy Sottotitolo 2020 Selling online in the time of the Coronavirus Intellectual property: Casaleggio Associati Digital Thinking Via Uberto Visconti di Modrone, 30, 20122 Milan Published in May 2020. Printed in Italy. Digital Thinking We help companies to define their digital strategies and accompany them through the process of transformation, thanks to the solid experience we have gained since 2004. casaleggio.it Casaleggio Associati We conceive and implement digital transformation projects Business transformation has never been so quick and requires a medium to longterm strategy: we must set priorities, assess the feasibility, proceed with implementation and evaluate the return on investment. For this reason, a solid strategy presupposes an overall vision in which business models, the digital ecosystem, advertising and digital relations with customers are jointly analysed as a unit. Digital Thinking is the first value that we can pass on to our clients. We design and build the digital future alongside them, proposing innovative solutions within their business processes and corporate business practices. We help our clients to publicise their transformation in novel terms and via new channels so as to better position them within a competitive global context. We analyse market changes and changing needs, provide new insights and trends and compare them with international dynamics. Our services Our in-depth analysis abilities and many years of experience in numerous market sectors enable us to act as a solid, reliable partner for companies wanting to incorporate innovation into their respective business models. Our areas of consulting and related services are as follows CA Contacts → Via Uberto Visconti di Modrone, 30, 20122 Milan Telephone +39 02 89 01 14 66 E-mail info@casaleggio.it Website www.casaleggio.it Establishment of online strategye: strategia@casaleggio.it → Digital Strategy & Innovation Strategy Design Rethinking Business Model Blockchain Strategy Roadmap to Smart Company Digital communication Brand Positioning & Reputation Social Media Management Content Strategy Community accelerator → Surveys, Education & Digital Thinking Vertical studies and research Corporate Training Speech Index Introduction 06 The current situation as regards e-commerce 08 E-commerce in Italy 10 E-commerce in the time of the Coronavirus 14 Online Marketing 25 Selling abroad 30 Selling on Marketplaces 31 Social Media 33 Organisational structure 36 Companies interviewed 39 5 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Introduction Opinion E-commerce in 2020 will constitute a turning point. As in previous years, the forecasts indicate a double-digit growth rate, as has been the case in Italy for the past fifteen years. The Coronavirus effect is set to reshuffle all the cards on the table. The market sectors that have historically been top of the list, such as Tourism, will decline for the first time ever, whereas other sectors such as Shopping Malls and Foodstuffs will record triple-digit growth rates. For a number of traders, the main problem of growth in 2020 will not be the number of clients they have, but rather their logistics capacity to cope with them. Many operators have in fact stopped advertising during the lockdown period, having reached saturation point in terms of their operational capacity. Other traders’ products are no longer attractive in times of crisis. The Clothing sector encountered its first crisis in online sales, since they could not compete against over-full wardrobes and the people’s inability to leave their homes. Notwithstanding the crisis in various product categories and the general decline in consumption, 2020 is the year in which all Italians have begun to really discover the option of shopping online. Traders that are able capture this moment will be able to pick up new customers and build up their brand loyalty over time. 2020 will also be the year in which many traders will set up an online channel of their own, initially to shift their stocks of goods gathering dust in their closed stores, but then also to also be able to compete in the newly developing areas of demand, namely that of online purchasing from physical local stores. While up to now having a pizza delivered to your door has been perfectly normal, from now it will become equally normal to have anything else, even a screwdriver, delivered to your door. 6 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Goods and services sectors CONSUMER ELECTRONICS Domestic appliances, Hardware, Telephony, Photography, Audio FOODSTUFFS Foods, beverages, supermarkets, restaurants HOME AND FURNISHINGS Furniture and home and garden items LEISURE Betting, gambling, toys, sports goods, entertainment, telephony PUBLISHING Home videos, books, music, software, information FASHION Clothing footwear, jewellery, glasses HEALTH AND BEAUTY Perfumes, cosmetics, wellness, medicines INSURANCES Car, motorcycle and home insurance policies ONLINE SHOPPING MALLS Varied products, Ebay (B2C) TOURISM Transport, hotels, tour operators, attractions Methodology This Report is based on an analysis of information obtained from various sources, including surveys and market research studies conducted, current articles and Casaleggio Associati experience in the field, as well as via an online survey and in-depth interviews with a number of the main market operators. Participants included company owners, managing directors, general managers, marketing managers, country managers, e-commerce managers and Internet managers. The companies that participated were either Italian or Italian subsidiaries of multinational groups. All the data reflected in this Report will relate specifically to the Italian business to consumer market. Chart source: Casaleggio Associati, 2020. 7 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus CHAPTER ONE The current situation as regards e-commerce E-commerce around the world The number of Internet users worldwide currently stands at around 4.5 billion, 7% up on last year’s figure, and together they represent 59% of the world’s population¹. The Asia-Pacific area tops the list in terms of number of users with 2.3 billion Internet users, making up 50% of the total². Digital media penetration increased from 55.1% to 58.8% in just one year and there are now 1.72 billion³ websites in existence worldwide. Around the world, people are currently spending on average 171 minutes per person per day online, which is 9 minutes more than last year4. On average, mobile phone traffic makes up around 52% of the total global traffic while 45% originates from desktops and the remaining 3% from tablets. Mobile phone traffic peaks out at 62% in Asia and 60% in Africa. In Europe, instead, it represents 43% of total traffic and 48%5 in North America. Last year, some 80% of Internet users searched for a product or service online and 74% made at least one purchase online, amounting to a total of around 3 billion purchasers (equivalent to 39% of the world’s population)6. In January 2020, the global conversion rate was equivalent to 1.72% (+9% compared to January 2019)7. In 2019, global e-commerce total turnover amounted to 15,751 billion Dollars, including B2C and B2B. B2C, or online retail, represents 23% of the total and is two percentage points up from the year just ended8. B2C e-commerce worldwide is worth 3,535 billion Dollars, 20% up on the previous year. It is estimated that this figure will hit 5,000 billion Dollars in 2020 and will continue to grow at the same rate⁹. In 2019, B2C e-commerce represented 14.1% of total retail sales worldwide (a growth rate of +15% compared to the year before) and it is estimated that this percentage could rise to 22% by 2023¹⁰. The Asia-Pacific region continues to expand its market share and currently represents 64.3% of the total with a turnover of 2,271 billion Dollars and a growth rate of 25% year on year¹¹. With its growth rate of +4.4% in retail sales last year12, in 2019 China once again confirmed its status as the world’s most important e-commerce market. In fact, with a turnover of 1,935 billion, it represents 54.7% of the market. At 587 billion13, the turnover of the United States e-commerce market is just one third of the size of China’s. In South-east Asia in particular, it is estimated that the Source: 1: Digital 2020, We Are Social & Hootsuite, 2020; 2: Internet World Stats, 2020; 3: How Many Websites Are There?, Statista, 2019; 4: Average daily time spent per capita with the internet worldwide from 2011 to 2021 (in minutes), Statista, 2020; 5: Desktop vs Mobile vs Tablet Market Share Worldwide, Statcounter, 2020; 6: Digital 2020, We Are Social & Hootsuite, 2020; 7: E-commerce benchmarks and e-commerce market data, IRP Commerce, 2020; 8: In-depth: B2B e-Commerce 2019, ecommerce DB, Statista, 2019 and Global Ecommerce 2019, eMarketer, 2019: 9: Global Ecommerce 2019, eMarketer, 2019; 10: E-commerce share of total global retail sales from 2015 to 2023, Statista, 2020; 11: Global Ecommerce 2019, eMarketer, 2019; 12: Cina: Pechino, vendite al dettaglio +4,4% nel 2019, Ansa, 2020; 13: Global Ecommerce 2019, eMarketer, 2019. 8 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus value of the online economy will exceed 300 billion Dollars by 202514. In the region, Thailand’s e-commerce economy is second only to that of Indonesia, with an online turnover of 16 billion Dollars. The Latin American, Middle-Eastern and African markets are growing at a rate of 21%, while the already well-established North American and European markets are seeing slower, but nevertheless double-digit growth rates (14.5% and 10% respectively)15. Worldwide, 30.7% of online buyers fall into the 25-34 age group, followed by the 35-44 group at 24.8% and the 1824 age group at 19.8%. Only 16.8% of users are between 45 and 54 years old and 7.9% are between the ages of 55 and 6416. E-commerce in Europe Europe is the continent with the highest rate of internet penetration, which currently stands at 85% and has grown by 5% compared to last year17. In fact, the current number of European users that access the internet stands at 727.56 million18. In 2019 in Europe, 70.6% of the population purchased something online. This percentage seems set to increase to 72.6% in 2020 and 78% in 202419. On average, 64.5% of users made online purchases in the past year via a mobile device and 79% ordered products via a marketplace20. Online retail sales amount to 309 billion Euro, a 10% increase on the previous year. According to estimates, this figure is set to increase to 343 billion in 2020. Amongst the leaders are the Fashion sector with 89 billion Euro (+10% up on 2018), the Consumer electronic and Media sector with 76 billion Euro (+10%), the Leisure sector with 60 billion Euro (+8%), the Home and Furnishings sector at 44 billion Euro (+12%) and finally the Foodstuffs and Health and Beauty sectors with 38 billion Euro (+12%). The average annual turnover per user in Europe currently stands at 558 Euro21. In 2019, the United Kingdom was once again Europe’s largest e-commerce market, worth around 130 billion Euro, followed by Germany (74 billion Euro) and then by France (63 billion Euro)22. Within this framework, however, the southern European countries (particularly Italy and Spain) are the ones that are growing at the fastest rate23. Source: 14: E-conomy SEA, Google, 2019; 15: Global Ecommerce 2019, eMarketer, 2019; 16: Digital commerce, Statista, 2019; 17: Global internet penetration rate from 2009 to 2019, by region, Statista, 2020; 18: Internet usage worldwide, Statista, 2020; 19: Digital Buyer penetration in Europe from 2017 to 2024, Statista, 2019; 20: E-commerce in Europe 2019, Postnord, 2019; 21: eCommerce - Europe, Statista, 2019; 22: Global Ecommerce 2019, eMarketer, 2019; 23: E-commerce in Europe 2019, Postnord, 2019. 9 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus CHAPTER TWO E-commerce in Italy 12% of Italian companies are active in e-commerce, 79% of them in the consumer field. Compared to offline commerce, which has witnessed the disappearance of around 63-thousand stores (-11%)24 over the past 10 years, the Companies Register confirms the e-commerce trend in Italy: in the whole of 2019, the number of active companies that registered under the ATECO 47.91.1 code applicable to online commerce amounted to 6,968, or 20% more than those registered in 2018. Businesses that registered under the primary code, in other words businesses that indicated online sales as being their main business activity, or whose main source of revenue is e-commerce, amount to 68% (in 2018 this percentage was 54%)25. In Italy, the spread of online shopping amongst the population from 2 years of age upwards hit 70% with an average of 41.5 million individual users recorded in December 2019, which is in line with last year. Desktop access continues to decline (down from 28.4 million individual users to 25.7 million. This figure has declined by 10-thousand users in two years)26. The average spend per user per year is 668 Euro. As regards the legislation, since 2019 it has been compulsory for businesses that sell goods online within the EU via marketplaces and other platforms to provide the Department of Inland Revenue with certain information regarding suppliers and online sales. More specifically, they are required to provide the personal details of the suppliers, as well as the total number of units sold in Italy by each supplier and the selling price. The first return, scheduled for October, included sales made in the previous five months, with subsequent returns being required on a quarterly basis. This operation enables the authorities to better monitor the online sales of all the platforms and, in the event of failure to submit the applicable returns, the party is deemed to be a tax debtor27. A new so-called Web tax came into effect in 2020 and it is estimated that this tax will add a further 700 million Euro per year into the Italian Government coffers. This tax amounts to 3% on the service revenues of tech-companies with a global annual turnover in excess of 750 million Euro, of which 5.5 million is generated in Italy28. A sunset clause provides that this tax will remain in force until such time as an international accord is reached for the introduction of a standard tax, which is expected to be in place by the end of 2020. 76% of Italian e-commerce users made an online purchase within the past year, as against the European average of 64%. 98% of users purchased goods via a marketplace during the course of the past year and 31.6 million people made online purchases from foreign websites, in particular from China, the UK, the United States and Germany29. Source: 24: Se Roma diventa una “Amazon con il Colosseo”: i costi sociali e ambientali dell’e-commerce, Secolo d’Italia, 2020; 25: Telemaco, Sportello telematico per l’accesso al Registro Imprese, Infocamere, 2020; 26: Total Digital Audience del mese di dicembre 2019, Audiweb 2019; 27: Vendite di beni online: ecco come trasmettere i dati all’Agenzia delle Entrate, Fisco e Tasse, 2019; 28: Tutti parlano di web tax, ma a che punto siamo davvero?, Wired, 2020; 29: E-commerce in Europe 2019, Postnord, 2019. 10 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy E-commerce turnover in Italy The value of e-commerce turnover in Italy is estimated to be in the order of 48.5 billion Euro, reflecting a growth of 17% compared to 2018. % change Turnover in billions of € 3. E-commerce in the time of 4. Online Marketing the Coronavirus 50 +17% 48.5 40 +18% 40 41.5 +11% 35.1 30 +10% 31.7 30 +19% 28.8 +8% 24.2 +6% 20 +12% 22.3 21.1 20 +32% 19 2004: 1,645,683,000 euro 2005: 2,123,495,000 euro +29% 2006: 3,286,223,000 euro +55% +43% 14.4 2007: 4,868,336,000 euro +48% 2008: 6,364,907,000 euro +31% 2009: 10,037,544,000 euro +58% 2010: 14,357,589,000 euro +43% 10 +58% 10 2011: 18,970,504,000 euro +32% 10 2012: 21,154,120,000 euro +12% 2013: 22,337,275,000 euro +6% 1.6 +31% 6.4 +48% 4.9 +55% +29% 3.3 2.1 2014: 2015: 2016: 2017: 2018: 2019: 24,188,468,000 euro +8% 28,850,766,000 euro +19% 31,671,827,000 euro +10% 35,133,577,000 euro +11% 41,519,772,000 euro +18% 48,546,741,581 euro +17% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Chart source: Casaleggio Associati, 2020. 11 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Mobile: turnover and growth In 2019 the mobile channel alone generated, on average, 43.5% of the turnover of Italian e-commerce companies, which is 9.5% up on last year’s figure. This percentage continues to grow year on year. 40% 43.5% 30% 22% 20% 13% 10% 2013 2014 2015 Chart source: Casaleggio Associati, 2020. 12 34% 26% 27% Turnover distribution in 2019 The Leisure sector continues to be the largest in terms of e-commerce (representing 42.7% of total turnover), followed by the Tourism sector (25.6%). The former has is growing at a rate of 21% when compared to last year, whereas tourism, which is a mature sector in terms of e-commerce, is growing at a rate of 7%, notwithstanding the strengthening of tour operator and travel agency operations. Shopping malls represent 15.5% of total e-commerce turnover, with an increase of 25%. All of the other sectors have turnover share of less than 5% and together make up 16.2% of the total turnover. The Insurance sector, which is growing at a rate of 4% in terms of turnover, now holds a 4.6% share of the total turnover. The Health and Beauty sector is growing at a rate of 27%, continuing last year’s trend but still only making up 0.4% of the total. The Home and Furnishings sector is growing at a rate of 25% and now represents 0.9% of the total. The Foodstuffs sector is growing at a rate of 19%, thanks to food delivery services and increasing consumption, and now makes up 3.1% of the total. The Consumer electronics sector is growing at a rate of 17% (making up 3.3% of the total), while the Fashion sector is growing at 16% (2.1% of the total) and the Publishing sector at 11% (1.8% of the total) since more than one out of every four books sold is now sold online30. 2016 2017 2018 2019 Source: 30: Mercato dei libri: in Italia cresce il peso dell’ecommerce che ormai vale il 26,7%, IlLibraio.it, 2020. Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus 1.8% PUBLISHING 3.1% FOODSTUFFS 2.1% FASHION 3.3% CONSUMER ELECTRONICS 0.9% HOME AND FURNISHINGS 0.4% HEALTH AND BEAUTY 4.6% INSURANCES 42.7% LEISURE 15.5% ONLINE SHOPPING MALLS E-commerce turnover distribution in Italy in 2019 25.6% TOURISM Chart source: Casaleggio Associati, 2020. 13 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus CHAPTER THREE E-commerce in the time of the Coronavirus 60K In early 2019 the Coronavirus appeared on the global scene and in addition to generating large numbers of infections, with all the repercussions of which we are all well aware, it has had a sharp impact on our daily lives, limiting both our personal contacts and our traditional instore purchases. Daily downloads of food delivery apps, USA From 15/02/2020 to 15/03/2020 Walmart Grocery The first cases were recorded in China in late 2019 and in Italy in late January. The subsequent spread was exponential and in a short space of time the epidemic spread globally and turned into a full-scale pandemic. Instacart Globally, within the initial 20 days of the spread of the virus, we already noted a slowdown in the number of visits to e-commerce websites, notwithstanding the large numbers of potential buyers in lockdown at home whose main concern at that stage was probably to find out more about the illness and to equip themselves with the necessary tools to work from home31. However, the trend then changed direction and began to put upward pressure on e-commerce. As regards the propensity to purchase during the first month of the pandemic, 50% of Internet users in China and 31% of those in Italy stated that they would purchased the products that they would normally have purchased at a physical store, online32. 50K 40K 30K 20K 15/02 20/02 25/02 01/03 05/03 10/03 15/03 10K Shipt 0 Chart source: Instacart and grocery delivery apps ser consecutive days of record downloads, Apptopia, 2020. Source: 31: Understanding the Global Impact of the Coronavirus on Sectors and Industries, Similarweb, 2020; 32: Stats roundup: Coronavirus impact on marketing, ecommerce & advertising, Xeim, 2020. 14 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus 50% 100% 150% 200% 250% 300% 350% 400% Impact of the Coronavirus in Italy Italy was the first European country to be affected by the pandemic and the first country to have to shut down certain businesses in the interests of public safety and in an attempt to halt the spread of the virus33. Web traffic increased due to the large numbers of people in lockdown at home going online for various reasons. The enforced lockdown and the fear of being infected led to a 60% increase in Internet traffic in March34. In Italy, 72% of users spent more time on their smartphones than they did before35. In particular, the traffic increased on the large retailers’ websites (up over 250%) and food delivery websites. The ones that have landed up paying the price, instead, are the tourism, hotel, airline, car hire and event, and retail websites. Source: 33: Coronavirus impact on consumers and business, Reply, 2020; 34: Analisi dei prezzi durante il primo mese di COVID-19, Competitoor, 2020; 35: Coronavirus insights from our multi-national study, Globalwebindex, 2020. Web-traffic trends YoY TRAVEL ONLINE February VS January 1h March VS January 7days March VS January AIRLINES RETAIL CARREFOUR.IT ESSELUNGA.IT E-COOP.IT TOTAL Food deliveries in Italy (Above) Desktop and Mobile traffic, January-March 2020 January VS December February VS January 1h March VS January 7days March VS January E-COMMERCE EVENTS FOOD DELIVERY CAR RENTAL -70% -60% -50% -40% -30% -20% -10% 10% 20% 30% 40% Chart source: Understanding the Global Impact of the Coronavirus on Sectors and Industries, Similarweb, 2020. 15 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Overall, bandwidth use increased by 20% as from day one of the lockdown as the Italians started learning to use services that enable them to carry on living while in lockdown at home, switching from cinemas to movies on Netflix, from school to lessons on Google Classroom or Skype and all the way through to online aerobics courses and online shopping. It is precisely the latter that has brought about a huge economic transformation in a very short space of time. The decrees issued in March stopped many businesses in their tracks, but allowed postal and courier services to continue and also permitted retail trading of all products via the Internet, thus allowing online sales businesses to continue operating. The e-commerce sector became an essential service, not only for people who were obviously unable to go the shops, but also for companies who in many cases have no other way to sell their products. The Italian Electronic Trade Association launched their #CompraDaCasa (literally #BuyFromHome) campaign to urge people to think about shopping online and involving geographic areas that have historically been less forthcoming as regards online shopping. This situation has and will continue to have a considerable impact as much on those who only have access to a physical store and have seen their income shrink, and those who only have access to an e-commerce channel or both to an e-commerce channel and physical stores. As a result of the unexpected increase in online demand, the entire e-commerce supply chain, from traders all the way through to logistics businesses, is stepping up resources in order to meet the constantly increasing demand. allowing customers to return goods within 30 days after their stores re-open. Traders that are entirely reliant on online sales alone have adopted various different strategies, but generally speaking, e-commerce traders have remained open for bookings. Some, like Yoox and Zalando, will only ship out ordered goods once the emergency has ended. As regards prices, a survey conducted in February and March revealed that, in Italy, concerns about the possibility and the frequency of online price increases or decreases have increased by 37.2% since the start of the emergency. A certain amount of see-sawing of prices has been noted in all sectors, in particular in the Large retail, Pharmaceuticals (+8%) and Consumer electronics sectors36. Source: 36: Analisi dei prezzi online durante il primo mese di COVID-19, Competitoor, 2020. Impact of the Coronavirus on Travel-sector web traffic (inverted values) COVID cases in Italy Impact on the Italian Tourism sector web traffic A number of players, after having shut down their physical stores, have since also responsibly decided to shut down their e-commerce operations “until a future date yet to be announced in order to protect our employees” and in the interests of favouring the distribution of essential goods. Others instead, like Zara, have continued shipping goods purchased online and indeed expanded the services by, for example, offering free shipping and +15K -67% +10K -44% +5K START OF THE CORONAVIRUS Chart source: Understanding the Global Impact of the Coronavirus on Sectors and Industries, Similarweb, 2020. 16 -22% 0 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Survey: Impact of the Coronavirus on e-commerce in Italy of the stricter enforcement of payment deadlines by their suppliers who fear that they may not get paid. In a survey conducted in mid-March regarding e-commerce and the Coronavirus and involving Italian e-commerce traders, interviews were held with 58 traders from across all market sectors, most of whom stated that they could not see any chance of improvement in their business prospects anytime soon. 54% of the e-commerce companies interviewed have seen a drop in their turnover because of the Coronavirus, while only 21% of them saw an increase in turnover. Those whose turnover declined saw a drop of -54%, on average, in the last week. The worst-affected traders were in the Clothing, Home and furnishings and above all the Tourism sectors. Those whose turnover has increased in spite of the emergency are struggling to keep up with incoming orders, with an average increase of +96% in sectors such as online entertainment and training, or online food stores that, alone, have seen a +300% increase in turnover the past week. The products most purchased by Italians included pasta, disinfectants and long-life products. The Italian e-commerce companies have had to reorganise themselves in order to cope with this critical period. In particular, the areas deemed to be most under-stress relate to preparations for smart working (30%), logistics (27%) and product provisioning (21%). However, an issue that appears to be of concern even to those whose sales have increased at this time is the financial aspect, both because of the general reticence of investors and because Smart working is the biggest changes that the Italian e-commerce businesses have had to face was the installation of VPN at employees homes in order to ensure security and to manage their customer service centres via the cloud on Softphone. Zoom, Trello, Workspace, Slack, Workast, Google Drive, Skype, WhatsApp and Web have all become essential corporate business tools. Many e-commerce traders who also had a physical distribution network have shut down their stores. Companies whose sales increased dramatically began either limiting the orders per person or increasing order costs in an attempt to optimise their deliveries. Some food stores and supermarkets began reducing sales to weaker categories due to the sheer number of customers. On the other hand, there were also others who tried to increase their sales by increasingly offering additional benefits such as free delivery and discount codes. What e-commerce traders most want at the moment is, on the one hand, a logistics chain that is better able to safely cope with the demand and, on the other hand, greater serenity for people who are currently not buying anything that is not strictly essential for life in lockdown at home. In the weeks following the survey, the Italian market trend closely followed what emerged from the sample group as regards the areas of stress. Many traders were finding it difficult to cope with a flood of incoming orders and were obliged to come up with new ideas such as virtual queues in their online stores. Impact of the Coronavirus on e-commerce turnover Chart source: Casaleggio Associati, 2020. 54% NEGATIVE 25% NOT YET COLLECTED 21% POSITIVE 17 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus One example of this was the Carrefour supermarket chain, where customers who wanted to place an order had to “stand in queue” sitting at their home computer for anything from one to two hours. When they eventually did manage to access the online supermarket of choice, however, they discovered the earliest available delivery slots were only in two weeks’ time, as in the case of Esselunga. Even in the case of Amazon Prime, users were obliged to sit at their workstation waiting for one minute past midnight when the new batch of delivery slots became available for booking, and even then, with no delivery of non-essential products on a Sunday. In early April both the online shopping queues and the delivery times improved. Changes currently underway Closure of physical stores Other Issuing of discount codes Free delivery Limitation on orders / services Elimination of delivery services 26% 23% Shipping goods also became a real problem. It was not possible to deliver goods to certain towns and villages as the Italian Postal Service and delivery couriers such as BRT, FedEx and TNT closed a number of their branches. There were even certain towns and villages where the delivery of parcels was explicitly banned by regional ordinance37. 21% After having announced that the company would give priority to the delivery of essential items, on 17 March Amazon Italia was obliged to set delivery quotas. On the product front, the company announced that they had eliminated more than a million products from their assortment that falsely claimed to be Coronavirus related. As from 24 March, the company also had to deal with a strike by warehouse staff who complained that they were having to work without safety masks and the proper PPE38. 21% 6% 3% 31% Other Italian e-commerce areas under stress Internal organisation Logistics Product provisioning Other Customer Care operations In general, the company’s delivery efficiency declined considerably: in the ten days leading up to mid-March, records showed that 70% of shipped goods were delivered as against a 43% increase in the quantity of goods shipped. The former figure drops to 55% if we take into account all the couriers that arrived at the designated delivery address only to find that the branch was either totally shut down or closed to the public39. 27% 21% 11% 10% Chart source: Casaleggio Associati, 2020. Source: 37: L’e-commerce funziona ancora?, Il Post, 2020; 38: Coronavirus, Amazon si ferma. I lavoratori: «Assembrati e senza dispositivi di sicurezza», Corriere Torino, 2020; 39: L’andamento delle spedizioni eCommerce nell’ondata COVID19: dati totali e per settore, Qapla’, 2020. 18 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Evolution of business models Any companies that view this period as an opportunity to take a break in the belief that they will soon be getting back to business as usual are sadly mistaken. The changes in consumer habits will change everything, and clients will get used to new kinds of services and relationships with businesses. For the e-commerce traders, this is not the time to get left behind. throughout Germany to register and also to specifically permit food stores to register too. These stores now make up 43% of all the businesses registered on the platform. In order to achieve this, the platform helped the physical stores to register and guaranteed them an online space and that they would be operational online within 24 hours after submission of their application42. A number of companies have already adapted their business models in order to deal with the emergency and here are five application models. • Granarolo has opened its own online store, albeit only servicing the provinces of Bologna, Modena and Milan. There is no online payment facility available and only COD or POS payment is accepted. ESTABLISHING ONLINE PRESENCE AND EXPANSION OF SALES CHANNELS INTEGRATING THE STORE AND THE AVAILABLE STOCK During the course of recent months we have seen a proliferation of websites linked to physical stores that have never previously had a website of their own nor in many cases even a social network profile, and also the advent of proprietary websites of brands that have thus far been solely physical. Furthermore, many players have opted to expand their sales channels, either doing the necessary themselves or making use of support platforms. Examples include the following: One of the greatest current opportunities and needs is the capacity to manage product sales and product stocks throughout the Country, with stores closed. The major retail chains are looking for ways to speed up deliveries and reduce delivery costs and to facilitate local deliveries and the sale of in-store products, without losing the sales outlet’s turnover. This integration may be achieved by means of proprietary e-commerce or even e-commerce via third party channels. Here are some examples: • Gismondi 1754, the stock-market listed Genoese jewellery company, stopped selling via physical outlets and instead launched their own e-commerce website. Furthermore, the Company opted to appear on platforms such as My Teresa, Modaoperandi, Net-a-Porter, Gallerie La Fayette and Farfetch40. • After having shut down around 40% of its stores, the cosmetics company Lin Qingxuan re-engaged the beauty consultants who worked in the company’s stores and turned them into online influencers, specifically on WeChat, thereby achieving a 200% increase in sales over the previous year41. • Many offline stores have joined up with platforms such as cosaporto.it or Walà APP (delivery community apps) that increase their online visibility and offer website booking and digital payment facilities and home delivery services. Subsequently, various showcase platforms have appeared that enable users to place orders with local stores even via WhatsApp, such as Consegnare A Casa, #iorestoacasa Delivery and A Casa tua. • Until just before the advent of the Coronavirus, the German marketplace Lozuka included 25 stores in the Siegen region with a turnover of 300-thousand Euro. Since the health emergency, the marketplace has opted to change its business approach by allowing stores • Master Kong is a company that produces and sells instant noodles and beverages. They have opted to expand their physical outlets by opening even very small stores in order to enable them to support their local e-commerce deliveries implemented due to current needs. In this way, Master Kong has managed to supply over 60% of retailers, which is three times as many as their competitors have been able to supply43. • Nonna Isa, the Sardinian foodstuff brand that is part of the VéGé Group, has opened up six new e-commerce and home delivery enabled sales outlets44. • Fresh Hema, the Alibaba branch dedicated to the sale and delivery of fresh foods, has taken on more than 1,800 employees to be shared with catering establishments and ride-sharing companies that were no longer able to provide an efficient service due to the number of daily requests received. More than 30 catering businesses have benefited from the help provided by Fresh Hema45. • After a full month of lockdown, Leroy Merlin found it difficult to manage its centralised orders. To address this problem, the company offered customers the option of placing their order by phone, directly with the nearest branch and arranging delivery with the branch itself. So orders are now placed by phone, then confirmed via e-mail, payment occurs via a ClickPay link and the goods are delivered within 72 hours. Source: 40: Gismondi 1754, stop alle vendite fisiche avanti con eCommerce, Il Messaggero, 2020; 41: How Chinese Companies Have Responded to Coronavirus, Harvard Business Review, 2020; 42: Regional marketplace Lozuka is booming, eCommerce News, 2020; 43: How Chinese Companies Have Responded to Coronavirus, Hbr, 2020; 44: Coronavirus, cresce l’e-commerce: + 26% l’importo medio della spesa, L’economia, 2020; 45: Coronavirus: Alibaba a imprese in crisi, lavoratori in comune, Ansa, 2020. 19 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus EXPANDING THE TARGET AUDIENCE OR THE BUSINESS SCOPE Many brands have opted to change or expand their target audience or their services. These days, traders whose turnover has dropped must be able to successfully recalibrate the products they sell based on the changes in customer requirements, and hang in there in terms of cash-flow so as to be ready to go when the Covid-19 virus has been routed. Here are some examples: • In Milan, the FrescoFrigo start-up that had, until recently, specialised in the installation of automatic fresh and health food dispensers in office complexes, has since adopted the called “apartment complex market” whereby they have installed smart refrigerators at the Social Village Cascina Merlata complex to provide the more than 900 residents with a variety of products including bread, cheeses, cold meats, vegetables, milk, beverages and flour. FrescoFrigo aims to install around 60 new refrigerators in residential complexes in April46. • After a month of lockdown and with their delivery slot queues already snarled up, Carrefour decided to create an “Essential products” section on their website. In this section, customers can order a pre-packaged box of essential weekly shopping products and regular free deliveries are guaranteed47. • The Fork, the restaurant booking App, has created a home delivery section that puts customers and restaurants in contact with each other directly with no need to go via an intermediary. In addition, they have also launched an initiative to promote advance bookings for the day on which the restaurants expect to reopen (19 April), offering loyalty point rewards and discounts. • AB InBev, the Belgian colossus that owns over 500 beer brands ranging from Bud to Corona and Beck’s to Leffe, has now come up with a beer-bond initiative. Customers will be able to buy gift cards of various denominations for their local bar, via the salvailtuobar.it website, which they will be able to use and enjoy when the bar of choice eventually reopens. The company will pay out 30% more than the face value of the gift card to the bar in question in order to help them through the current lockdown48. • Ant Financial, Alipay’s fintech arm, has created DuoChain, a blockchain-based online insurance payout platform. In addition to the platform itself, the company is also offering free insurance cover against the Coronavirus-related problems in order to encourage new customers to purchase their insurance cover online and to improve customer loyalty amongst their exi- sting clients. In this way the company has increased its health insurance sales by 30% and processed over 1,000 applications per second49. PRODUCT CONVERSION FOR HEALTHCARE PURPOSES In these difficult times certain businesses in the textile-manufacturing sector have adapted their production lines to produce cloth surgical gowns and safety masks, while some pharmaceutical businesses have prioritised the manufacturing of sanitising products. Some of the aforesaid products were sold, while some was donated to the community. Certain platform suppliers have also contributed by converting part of their production for use by the community. Here are some examples: • Calzedonia has adapted its sock and stocking manufacturing plants in Avio (Trento), Gissi (Chieti) and its Croatian plants to produce safety masks and surgical gowns. They initially began producing 10,000 items a day, which they then donated to various towns and villages, all the while keeping their original e-commerce business running too50. • In order to re-focus its production, the Italian fashion boutique chain Ermanno Scervino arranged for their seamstresses to Smart-work from home. Each day, designated employees delivered metres of fabric and elastic to the seamstress’ homes and collected the safety masks produced the day before51. • The Ramazzotti distillery, as well as the Davines Group and l’Erbolario52, switched their respective production of digestive Amaro liqueur, shampoos and cosmetic products to the manufacture of bottled sanitiser to be distributed to the Red Cross organisation and other organisations operating throughout the Country. • FCA and Ferrari made part of their available facilities and the services of its engineers available to Siare Engineering, one of the few companies that manufacture respirators, so as to enable the latter to double its productivity53. • Supermercato24 granted free access to its tech platform to volunteers and organisations so that they could receive requests for home delivery of shopping from people at high-risk of infection. Source: 46: Coronavirus, a Milano nasce il market di condominio: frigoriferi smart sul pianerottolo (o quasi), Corriere della Sera, 2020; 47: Carrefour Italia lancia la spesa online “Gli essenziali”, MyFruit, 2020; 48: Covid-19, dal «Salva-bar» al «Risto-bond»: così aiuti il tuo locale di fiducia a non fallire, Il Messaggero, 2020; 49: Coronavirus, perché accelererà l’innovazione nelle assicurazioni, Digital 360, 2020; 50: Calzedonia riconverte la produzione, arrivano nuove donazioni, Il Sole 24 ore, 2020; 51: Coronavirus: Scervino, orgogliosi di produrre mascherine, Ansa, 2020; 52: eCommerce, rivoluzione Coronavirus: così reagisce la filiera, Agenda Digitale, 2020; 53: Fca e Ferrari pronte a collaborare con Siare per produrre ventilatori salvavita per i pazienti del Coronavirus, La Stampa, 2020. 20 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus PROMOTING THE BRAND Numerous brands have put a lot of time, effort and resources into talking to their customers and involving them in targeted campaigns aimed at spending time together so as to strengthen the brand. A survey conducted in the USA has revealed that 99% of social media users state that they will undoubtedly purchase something online during the lockdown, which proves that this target audience is more likely to purchase online rather than elsewhere and that an online presence can be really advantageous for a brand55. • Chicco has launched their #Next2you initiative, aimed at providing support to parents who are stuck at home with their children by suggesting entertainment options and ideas on how to explain the current emergency to their children. Decathlon, on the other hand, is using the hashtag #sportacasa to group together any posts concerning the use of its products at home, as well as its training videos. • Ikea has continued to post images of homes furnished with its products, adding the hashtag #RipartiamoDaCasa to encourage the creation of a dedicated Smart-working corner in the home. • Vodafone has launched its “Insieme” campaign that enables users to make a donation to the Italian Red Cross organisation by simply sending an SMS to a dedicated telephone number. The campaign is supported by the first ever remotely filmed advert promoting the Giga Network. The spot displays various clips of daily life under lockdown with the message that: “Even when we can’t be side by side, we can still be together”. Companies that have managed to exploit the advantages of the Social Media very well are those in the Fitness sector that have created online gyms. Amongst these, GetFit has launched its own live-streaming keep-fit programme, called Allenati con Me, getting the instructors from its various branches to run courses live on Instagram. In this way, when their gyms are eventually able to reopen, they should have earned the loyalty of their existing members and attracted a number of new members to join. LifeGate has also set up their own initiative on YouTube, called Smart yoga Class, which includes a dedicated Playlist56. In the first few months of this year, Peleton recorded a mere 1.6% drop in its online fitness services, well below the market average of 8.2%57. Many Chinese companies have decided to use the social media for their online sales, above all WeChat. One example is Cosmo Lady, the largest of the Chinese lingerie and underwear companies, which has launched an initiative amongst all their employees (including their President and CEO), offering prizes to whoever managed to best promote the company’s new online sales channel58. • Sky Italia has launched two new initiatives, the first of which, #SmartAmbassador, is aimed at promoting Smart-working via the company’s own employees and the second, #iorestoacasa, involving famous people (including Bruno Barbieri, Ivana Lotito and Daniele Aldani) is aimed at raising funds for Civil Defence. • Barilla has broadcast a TV ad featuring the music from a historic ad and Sofia Loren’s voice to highlight this Country’s strength and the Italian-ness of its people. Almost all of the campaigns involve the social media. The social media are amongst the main channels used for keeping up to date on the progression of the virus, so people are generally logging on to these websites more regularly and they are also a prime source of diversion and entertainment. The platforms that are benefitting the most at the moment are YouTube and Facebook. Facebook has focused on its role as informer, as have Twitter and TikTok, with the aim of providing accurate information regarding the Coronavirus. Just like Amazon and eBay, Facebook has also found itself having to eliminate certain products from its marketplace due to speculation54. Source: 54: Facebook banned medical face mask listing, and they’re still littering the platform, The Verge, 2020; 55: Coronavirus: how consumers are actually reacting, Globalwebindex, 2020; 56: Lo yoga è un momento per fermarci. Con Smart yoga class si pratica da casa, Lifegate, 2020; 57: 5 Internet-Based Stocks to Benefit From Coronavirus Lockdown, Nasdaq, 2020; 58: What eCommerce Managers and Directors should know in the time of Coronavirus, Divante, 2020. 21 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Prospects for the various sectors in 2020 All the e-commerce figures for March were positive and, in fact, the numbers were pretty-much double those of the previous month. This notwithstanding, in the coming months both online and offline traders will have to deal with the impact on jobs and on the decline in the Italians’ purchasing power. The Large Retail sector is amongst the sectors that have benefitted the most during this period. This sector, together with the food delivery sector, forms part of the broader Foodstuffs sector, which represents 3.1% of the total. Also contributing to the growth were the small neighbourhood essential item stores, which grew by around 16%59. Significant growth was also recorded in both the Health and Beauty sector, mainly thanks to pharmaceuticals, and in the Publishing sector, thanks to streaming content. In 2019, the share of total e-commerce turnover held by these two sectors was less than 5% (0.4% in the case of Health and Beauty and 1.8% in the case of Publishing). This growth will therefore increase their respective turnovers and undoubtedly also change their share of the total. The Shopping Mall sector, which represented 15.5% of the turnover in 2019 and has registered 25% growth in a single year, has been positively affected notwithstanding the slowdown and the holdup in deliveries of non-essential products. For example, here in Italy, eBay has reported increased sales of health and beauty products (+62%), sport and wellness products (+32%), domestic appliances – above all coffee machines (+39%) -, gardening products (+81%) and sex-related products (+240%)60. The Insurance sector has developed specific Coronavirus-related packages and has had virtually zero claims, and consequently zero payments, on certain existing policies such as vehicle insurance. Online searches have increased, as have their sales, although the competition on prices has become more cutthroat61. In the Fashion sector, which has already been put in great difficulty due to the closure of physical stores for an extended period, is also being negatively affected by a lack of product demand that is sure to impact on the entire year’s results. The Leisure sector, which makes up 42.7% of the total annual e-commerce turnover for 2019, will be affected by the restrictions on physical gambling activities. Many people have resorted to online gambling, but this kind of gambling could also be restricted by governments that are concerned about its social impact. As regards toys, instead, sales have increased considerably, as have the sales of items such as hobby accessories62 and sex toys63. Sports equipment item purchases are limited and the focus has switched from outdoor sports to indoor sports, while the Events sector has suffered badly due to the postponement or cancellation of events. Counterbalancing this growth trend is the Tourism sector, which makes up 25.6% of the total turnover and has been very badly affected in the first few months of this year. As regards advertising, Adsoend was set to rise sharply in 2020. The current situation is certain to have a significant impact, but current forecasts still indicate a 7.1% increase worldwide since the feelings are that the expenditure has merely been postponed to the second half of the year, when the competition and product prices will be even more dynamic than they are right now. It is estimated that Google is set to see a 15% decrease year on year due to the lack of investment by the Travel sector in the first quarter of the year and a drop of 20% in the second quarter generally due to the spread of the virus64. The costs of advertising campaigns have varied significantly both in Italy and around the world as advertisers try to reach the broadest possible target audience available65. As in the case of the Electronics sector where the purchases of laptops, notebooks, printers and small kitchen appliances and body care equipment in particular has increased, the Home and furnishings sector also saw purchases increasing, albeit on smaller-ticket items. Source: 59: Raddoppia l’e-commerce, grande distribuzione +16,4%, La Stampa, 2020; 60: Cosa comprano gli italiani su eBay col Coronavirus?, La Stampa, 2020; 61: Auto e Coronavirus, cala il premio medio nelle polizze Rc, Il Sole 24 Ore, 2020; 62: Coronavirus: il traffico online nei principali settori economici, Diario del Web, 2020; 63: Sex toys e preservativi sono alcuni degli articoli più acquistati sul web durante l’epidemia: raddoppiano le vedite rispetto al solito, DRcommodore, 2020; 64: Coronavirus disrupts search, digital and budgets, Search Engine Land, 2020; 65: Analisi dei prezzi online durante il primo mese di COVID-19, Competitoor, 2020. 22 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Sector prospects for 2020 CONSUMER ELECTRONICS FASHION FOODSTUFFS HEALTH AND BEAUTY HOME AND FURNISHINGS LEISURE INSURANCES ONLINE SHOPPING MALLS PUBLISHING TOURISM Chart source: Casaleggio Associati, 2020. 23 E-commerce in the time of the Coronavirus WAR ON EBay blocks 20-thousand SPECULATION products at risk of spe- culation Amazon blocks 1 million misleading products CHARITY Alibaba donates 1 million surgical masks to Italy STAFF Alibaba’s Fresh Hema engaSHARING ges 1,800 employees to be shared with restaurants and ride-sharing services BOND AB InBev creates beer-bonds to support pubs and brewers shut down due to the lockdown People stuck at home +60% increase in web traffic in March +250% increase in large-scale retail website traffic 20x the number of customer requests 5x the players’ ability to deliver 54% DROP IN TURNOVER Events Tourism Fashion and luxury goods Apple: 10% drop in the number of iPhones shipped due to lack of supplies RECALIBRATION OF ADVERTISING IKEA launches #RipartiamoDaCasa and aims at the creation of smart working spaces Chicco assists parents who are stuck at home with the children via #Next2you GetFit creates “Allenati con me” (Train with me), a live streaming training programme on Instagram OPENING NEW ONLINE SALES CHANNELS Granarolo does direct deliveries in BO, MI and MO provinces Creation of physical stores in marketplaces such as Cosaporto.it and Storeden TRANSFORMATION Leroy Merlin accepts telephonic OF STORES INTO orders in its stores. Payment by STORAGE means of ClickPay WAREHOUSES BRAND PROMOTION CosmoLady, the Chinese lingerie company offers its employees rewards for promoting online sales on the social networks CASALEGGIO ASSOCIATI Digital Thinking 21% RISE IN TURNOVER Foodstuffs Insurance Entertainment Netflix: +7 million customers in the first quarter of the year FREE COPVARCENOoiRnDrbDsEoruTDRnAUMarAauEDnaCPvRodcnCJTiO-hircGFUsOcSuerpWEhsSeGoEeABaTsTfEcnNMNociCSIonsRxoANIaDPve,TMFlfrerGidoLIprrsOrVaeirEpOagtitfrnEihNyNNoDoYacae,eHateuggETEuiDupnotrauIeEsLfrCRsaDfilmalewnaIfitriLxVIRegcantrsApVqomErerlEtfsOmllsruEerosaSukeReaNayoRtanernfefhleYStAfrazNdirErLteteeedoedsnENybWeESsssneercCloYa’othiDSolveIioepolnfvUcTiJSeEfxnaDueddoksHrRsgyT.rlsarocseiaiuoiEbevinvdoesngbflyseecmefsncee,rr€Cftr2slnvetedie2oa5eoa1seraanl0p%hessltssit0eivdeiaectvgr-oeshuclsetnehnrcehthssasoleoeitdgtucpuosuoolrresrsroooeaesddrsnroDusodercebrqtdlyluiiovormiocrenenkerdyeea:srnsdorrodpe-rs Partner: Sponsor: Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus CHAPTER FOUR Online Marketing 4% E-commerce solutions utilised Ad-hoc platforms Magento Prestashop Woocommerce Other Shopify Storeden OpenCart Salesforce Drupal Joomla OsCommerce Oracle 4% 8% 10% 2% 1.5% 31% 12% 21% Online presence E-commerce solutions In 2019 we see a rush towards digitalisation and online The following stand out amongst the Italian solutions: Store- presence, even in sectors that were absent prior to then. den is a start-up that joined the ranks just this year. Set up in 2016, in just a few short years it has gathered funding and This can happen with proprietary websites, as in the case affiliated more than 3-thousand Italian companies. The pla- of Casavo, established in 2018 and operating in the real tform enables users to sell on its own website and synchro- estate sector, which enables users to obtain a home val- nise its catalogue in a multi-channel manner on marketplaces uation thanks to an algorithm and speeds up the prop- and the social media, including Amazon and Facebook. In erty sale and purchase process66. Another case is that of terms of payment options, the platform includes credit cards, Walliance, a start-up that has been going for three years digital wallet and country-based custom payment methods, now, operates in Italy and France and is innovating the real as well as displaying any local options. Storeden is the only estate crowdfunding market. In 2019 it raised around 10 mil- such platform in Europe and one of only seven worldwide lion, which was 50% up on the previous year. Yet another that enables users to synchronise their catalogues with In- case is that of Orapesce, the fresh fish e-commerce web- stagram and WhatsApp and enables the use of the Insta- site that aims to increase online fish sales, which currently gram check-out system, which enables customers to do all represents a mere 1.1% of the total product sales67. It can their shopping without ever going out of the app. also happen via an app, as in the case Kuokko, the app that enables restaurants to create their own online pres- Letsell, an e-commerce start-up set up in Italy in 2017 and ence and facilitates both in-store and remote bookings. has made the headlines for having racked-up over 40-thou- sand registered users, which is more than the number of In addition, it can also happen with the setting up or in- retailers on eBay Italia¹. The start-up enables anyone to re- creasing of online presence on platforms and market- gister and build an online shop, but unlike other players like places, which enables the business to reach a broad mar- Shopify or PrestaShop, whoever registers on Letsell has a ket and in many cases to utilise a range of services, from catalogue available that includes the products of over 100 payment services through to logistics services, promoted different brands that he/she can start selling in his/her shop directly by the marketplaces themselves. without having to have his/her own storage facility or ha- ving to deal with the shipping, which is handled by Letsell logistics thanks to the partnership with DHL. The start-up received funding from Intesa SanPaolo, the first time ever that the bank invested in a non-fintech enterprise, and in Chart source: Casaleggio Associati, 2020. June 2019 it opened up a new round of 1.5 million Euro68. Source: 66: Vendere casa in meno di un mese, il nuovo business è il proptech, Wired, 2018; 67: Orapesce, come una startup può portare innovazione in un mercato poco digitale, EconomyUp, 2020; 68: La vittoria di Davide contro Golia nell’e-commerce, La Repubblica, 2019. 25 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus RECOGNISE THE CUSTOMER AND UNDERSTAND HIS/HER PURCHASING BEHAVIOUR 26% Strategies to increase online sales by adopting multi / omnichannel solutions (Multiple response) ENCOURAGE UP AND CROSS SELLING 18% PROVIDE INFORMATION REGARDING PRODUCT AVAILABILITY 17% ENCOURAGE CLICK & COLLECT 14% ACCEPT IN-STORE RETURNS OF GOODS 10% BOUGHT ONLINE INCLUDE A STORE LOCATOR ON 9% THE WEBSITE / APP Omnichannel feature 75% of online businesses that adopt multi-channel sales strategies have increased their sales, 64% of them have increased their customer loyalty and 62% of them obtained a competitive advantage. Omnichannel customers spend 4% more every time they visit an online store and 10% more online compared to those who do their shopping on only one platform69. Amongst the brands that have done the most in terms of moving towards omnichannel shopping in Italy is Kasanova, which was the first in Europe to create Web Assistant, a service that enables users to purchase products online just as if he/she was visiting a physical store. In fact, the customer is assisted by a shop assistant that can display the goods to the customer thanks to a set of smart-glasses and a video camera70. H&M, instead, just recently made it official that they are revamping their sales outlets, which will be designed not as simple stores, but rather as fully fledged digital logistics service hubs (for product stocks, delivery and returns). In 2019 the company saw a 30% increase in their online sales71. Running alongside the omnichannel trend is the ever present trend towards personalisation. 86% of consumers believe that personalisation does indeed influence their purchasing decisions and 31% of consumers desire a more personalised shopping experience72. ENCOURAGE IN-STORE DIGITAL PAYMENT 9% EQUIP THE SHOPS WITH DIGITAL TOOLS 9% PROVIDE IN-STORE WI-FI AND / OR ENCOURAGE SOCIAL COMMERCE 5% NONE, BECAUSE WE DON’T BELIEVE IN OMNICHANNEL SHOPPING 4% ENCOURAGE SELF-CHECKOUT 3% OTHER 2% Chart source: Casaleggio Associati, 2020. Source: 69: Come i dati e una CX omnicanale stanno cambiando il mondo del retail, Customer Management Insights, 2020; 70: Kasanova: come funziona il web assistant che fa visitare il negozio “da casa”, EconomyUp, 2019; 71: H&M accelera l’integrazione tra offline e online, GDO Week, 2020; 72: Retailers Seek Innovation In Personalization, Retail Touch Points, 2020. 26 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus 92% of consumers purchase goods via different channels and this enables the gathering of information from various points73. The process of personalising the shopping experience begins with the gathering of information, which can be done by means of artificial intelligence and machine learning. An example of one of the more advanced tools in this regard is Criteo, the world’s largest tech company offering full-funnel solutions. Criteo uses artificial intelligence and machine learning in the advertising field and integrates itself into the websites of advertisers and publishers. It exploits information on 1.9 billion e-shoppers each month and helps companies to improve their results as regards conversions, traffic and awareness, in a personal manner. LuisaViaRoma, one of the first fashion brands to go into online sales back in 1999 and now a leader in the online luxury fashion market, uses Criteo for the purposes of retargeting the customer experience. The company thus generates a conversion rate that is 2.6 times higher in the case of users who have seen the ads developed using Criteo, and 6% more sales thanks to the retargeting (of which 10% are cross-device)74. Distribution % of marketing & advertising businesses 7% OTHER 9% E-MAIL 20% SEM 3% PROGRAMMATIC In Italy, 81% of users expect companies to utilise the new technologies to improve their personal shopping experience75 and retailers that have adopted automation systems sell 11% more product than the others do76. 4% AFFILIATION Source: 73: Three Competitive Pressures Driving Digital Commerce Strategy, Adobe, 2019; 74: How LuisaViaRoma stays at the top of the online luxury fashion world, Success Stories, Criteo, 2020; 75: State of the connected customer, Salesforce, 2020; 76: Capgemini - il 60% dei consumatori preferisce l’esperienza di uno smart store a quella dell’acquisto online, DCommerce, 2020. 12% SEO Chart source: Casaleggio Associati, 2020. 5% REMARKETING / RETARGETING 11% SOCIAL MEDIA 13% TV / NEWSPRINT / RADIO 7% SPONSORSHIPS 4% BANNER 5% INDICATORS 27 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus Online brand promotion 2018 We cannot find any system that offers a really good cost vs. return ratio. 14% Dissatisfied 2019 We have found a way to better promote our brand. 31% 18% Satisfied 2020 11% 33% 39% 51% Hard to say 54% 49% We are continuously trying new things. Chart source: Casaleggio Associati, 2020. 28 Introduction 1. The current situation as regards e-commerce 2. E-commerce in Italy 3. E-commerce in the time of 4. Online Marketing the Coronavirus 40% WEBSITE OPTIMISATION 33% ADOPTION/OPTIMISATION OF CRM AND MARKETING AUTOMATION 27% PRODUCT PERSONALISATION AND/OR RETARGETING 21% PRESENCE OF REVIEWS Strategies to increase online sales via website and platforms (Multiple response) 19% DIRECT PRESENCE ON THE MARKETPLACES 19% UPGRADING THE CUSTOMER EXPERIENCE 18% INTERNATIONALISATION 14% ADOPTION / CHANGE OF CMS PRESENCE ON THE 11% DISTRIBUTION PLATFORMS 3% OTHER Chart source: Casaleggio Associati, 2020. 29 5. Selling abroad 6. Selling on Marketplaces 7. Social Media CHAPTER FIVE Selling abroad 8. Organisational structure Companies interviewed Strategies for increasing sales abroad Translating the website into various languages Presence on marketplaces / platforms Presence on the Social Networks withtargeted advertising aimed at a foreign public Links to foreign online stores / events Opening of new markets Foreign market presence and turnover strategies 61% of Italian e-commerce companies also sell their products abroad (+5% compared to last year), whereas 39% of them sell their products only in Italy. As regards the strategies adopted in order to access foreign markets, 50% of them have a multilingual website (+25% compared to last year), whereas 6% of them resort to selling on the marketplaces and another 5% of them by, for example, using AI to automate marketing activities, setting up partnerships and the creating ad-hoc content. 31% 28% The Italian companies interviewed already sell their prod- 25% ucts both in Italy and in other markets: the highest per- centage, namely 21% in France, 19% in Spain and 18% in Germany, followed by the UK and the USA at 14% and finally Switzerland and Northern Europe at 10%. 6% of the companies sell their products in the Balkans as well as in Russia, Japan and Asia (excluding China), 5% in China and the same percentage in Latin America. 9% Only 2% of these companies are active in the Indian and African markets. 8% 30 Chart source: Casaleggio Associati, 2020. 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed CHAPTER SIX Selling on Marketplaces Percentage online sales generated by the marketplaces 36% LESS THAN 10% Half of the Italian companies are present on the marketplaces, even though their proprietary website remains the preferred channel. Around 50% of turnover originates from the proprietary websites, 23% from the marketplaces, a further 8% from the social media and the rest from other channels. Considering the various presences, the most utilised marketplaces are Amazon (38%), eBay (19%), Facebook Marketplace (12%), Alibaba (4%), ePRICE (4%), Zalando (4%) and Tmall (4%). If we take a look at the latest figures relative to the major marketplaces in 2019, as at the end of 2019 Amazon recorded yet another increase in revenues (+21%), which now amount to 87.4 billion Dollars with a net profit of over 3 billion77. In 2019, Amazon Prime reached the threshold of 150 million subscriptions worldwide while, overall, all the services of this kind, including the Music Unlimited music streaming platform and online store generated a 32% increase in turnover, which rose to 5.24 billion78. Source: 77: Bezos ha venduto azioni Amazon per 3,5 miliardi $ per finanziare la sua corsa allo spazio e battere i rivali Musk e Branson, Business Insider, 2020; 78: Amazon, ricavi a oltre 87 miliardi di dollari nel Q4 2019, Bene l’adv a +41%, Engage, 2020. 23% 26-50% 19% 11-25% 13% OVER 75% 9% 51-75% Number of multiple marketplace presences 45% 30% 18% 7% 2/3 MARKETPLACE 1 MARKETPLACE +5 MARKETPLACE 4/5 MARKETPLACE Chart source: Casaleggio Associati, 2020. 36% MENO DEL 10% Fonte grafico: Casaleggio Associati, 2020. 31 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed 2019 was also a record year for Amazon on the so-called Black Friday and Cyber Monday. These two days were the best ever in the American colossus’ history: it’s sufficient to say that on Black Friday alone, 37 orders per second were recorded and for the third-party vendors, the 24 hours of Cyber Monday were the most fruitful ever in the company’s entire history79. In 2019 the company’s logistics network expanded even further, hitting a total of 7 delivery stations throughout Italy, the aim being to fuel the so-called last-mile delivery services provided by local couriers and cooperatives. One-day delivery is already available in Milan, Rome and Turin and this service is expected to expand further afield in 2020. Even AWS (Amazon Web Services) is continuing to exhibit continuous growth and there are plans to open a new Branch in Milan in 202080. 2019 was also the year in which Amazon and ICE (the “Istituto per il Commercio Estero” – or Foreign Trade Institute) entered into an agreement to assist Italian SMEs in their efforts to go international by providing them with a “Made in Italy” dedicated showcase on the platform. One example of an Italian company that has used Amazon to grow and expand its business abroad is Dalle Piane Cashmere, which successfully doubled its turnover and entered the European market between 2015 and 2019 and now has a good chance of expanding into the USA as well. Another case in point is Rarezze, a Sicilian company that produces the typical regional Almond and Pistachio nut treats and sells top-quality handmade products online. Whereas before, the company’s business was limited to Sicily alone, now its products are sold throughout Italy and even abroad via the FBA (Fulfilled by Amazon) service. Looking eastward, 2019 was also a great year for the Chinese colossus Alibaba: the company made its debut on the Hong Kong stock market in November 2019. Its share-price immediately shot up by 7.7% and the company set a new, 10year record on the Chinese city’s trading floor by recording listing revenues of 12.9 billion Dollars81. Just a few days prior to being listed, i.e. on 11 November 2019, Alibaba generated 1 billion Dollars worth of sales per minute, which eventually turned out to be 12 billion in the first hour of the 11th annual Singles Day82. The day closed with 38 billion Dollars in sales83, which is not far short of the value of the total e-commerce business generated in Italy in 2018. Amongst the group’s objectives for the next few months is to expand its presence outside of China as well, in particular via Aliexpress, the B2C platforms that is already present in over 150 Countries84 and on which it is banking in Italy and its SMEs, as are Spain, Russia and Turkey, by offering smaller traders low-cost commission fees85. In Italy, Alibaba is aiming to attract 10-thousand companies onto its platform over the next 5 years. Alibaba also has an agreement in place with ICE, which led to the 2018 launch of the HelloIta project, a Made in Italy showcase on the Chinese colossus’ platform. In 2019, a new campaign called We Are Together was conceived as part of a project aimed at promoting the Italian food culture and the Italian lifestyle in China. It consisted of a series of initiatives, run both online and offline between 25 February and 10 March 2019, including tastings, show cooking events and promotions held at the Alibaba Group’s “Freshippo” chain of supermarkets. Thanks to these activities, the HelloIta campaign click-through rate increased 6-fold compared to what it was in the first few months after the project was launched86. Like Amazon, Alibaba also runs operations via the cloud and, more importantly handles more than 60% of the Chinese market and aims to expand its operations into Europe following the company’s entry into the German market. Tmall, Alibaba’s B2C marketplace, is fast becoming a very attractive sales channel option for Italian companies wanting to sell their products in China. The platform boasts over 1 billion different products and 180-thousand different brands and alone holds approximately a 61% share of the Chinese B2C e-commerce market. There are already more than 300 Italian-company stores on Tmall, amongst which is an interesting case, namely the Marvis toothpaste manufacturer Ludovico Martelli, which began selling its tubes of toothpaste right on this very marketplace and thus becoming a symbol of Made it Italy products in the personal hygiene sector87. In a recent major announcement IKEA revealed that the company has inaugurated its own online store on Tmall: this is the first time that the Swedish manufacturer has officially opened an online store of its own on a third party-run channel88. An interesting case for the Italian market is the website ManoMano, a marketplace in the Home, Garden and Do-ityourself sector that began in France and is active in Italy in both b2b and b2c. To date, ManoMano has over 3.5 million active users worldwide and 10% of its turnover originates from the Italian market. One of the unusual things about this marketplace and the sector, especially given that here in Italy the level of digital penetration for home and do-it-yourself companies is low compared to the Northern European country average of 16%, is that this marketplace also offers various services for vendors. Just recently, in order to enable it to consolidate its presence throughout Europe, the marketplace received additional funding amounting to 125 million Euro, thus raising the total funding received since it began to 311 million Euro89. Another growing enterprise on the Italian market is the startup, Mister Worker, which markets work tools and equipment for professionals and companies in various sectors. Established in Italy in 2012, it has been online since 2013 and sells its products mainly abroad across 150 different Countries. Mister Worker’s customers include some big names such as Ducati, Lufthansa and Siemens, as well as a total of around 50-thousand other companies that also use the platform and its more than 40-thousand pro-ducts90. 50% of the start-up’s sales are made directly online without any assistance, while the other half are made via the respective companies’ Purchasing Departments. Source: 79: Amazon Newsroom, 2019; 80: Amazon, una nuova region per il cloud a Milano: “Attirerà talenti e creerà lavoro”, La Stampa, 2019; 81: Alibaba, Ipo da record a Hong Kong e il titolo vola, Il Sole 24 ore, 2019; 82: Il Singles’ Day con il numero uno di Alibaba in Italia, Forbes, 2019; 83: Alibaba, Ipo da record a Hong Kong e il titolo vola, Il Sole 24 ore, 2019; 84: Alibaba: svolta ‘glocal’ di AliExpress con Italia e Pmi, Ansa, 2019; 85: Alibaba sfida Amazon, in Europa scoppia la guerra dell’e-commerce, Digital360, 2020; 86: Made in Italy, Ice e Alibaba insieme con un nuovo progetto multicanale, Corriere Comunicazioni, 2019; 87: Alibaba alla conquista delle pmi del made in Italy: moda e cosmesi le più amate dai cinesi, Il Sole 24 Ore, 2019; 88: Cina: IKEA apre negozio online su Tmall di Alibaba, Ansa, 2020; 89: Ecommerce, ManoMano: round di finanziamento da 125 mln euro, Adnkronos, 2020; 90: Mister Worker™, l’E-commerce per l’Industria premiato al Netcomm Award 2019, Adnkronos, 2020 32 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed CHAPTER SEVEN Social media 5% SPENDING LESS 9% SPENDING NIL The number of social media users worldwide has increased by 9.2% compared to last year and now stands at 3.8 billion, 3.75 billion of which use mobile devices. The average time spent daily on the social media is slightly up and currently stands at 1 hour and 57 minutes per day (+ 6 minutes since last year), as against the worldwide average of 2 hours and 24 minutes (+ 1,4% on Q3 of 2018)91. 30% of Italian online users search for products directly on the social networks (as against the 43% worldwide)92. YouTube is the social network most used by Italians, with 88% of Internet users stating that they utilise this platform. This is followed by Facebook at 80% and then by Instagram at 64%. Twitter and Linkedin are utilised respectively by 34% and 31% of users, followed by Pinterest by 29%, Snapchat by 16% and the emerging TikTok by 11% of users. Amongst the messaging apps, the most widely used in Italy is WhatsApp, which is utilised by 83% of online users. In second place we find another of Mark Zuckerberg’s applications, namely Facebook Messenger, with 57% of users, while the Chinese app WeChat is utilised by 13% of users93. 32% SPENDING UNCHANGED 53% SPENDING MORE Forecast investment in social media by Italian e-commerce businesses Social commerce In a global scenario in which 27% of people online find new brands via ads on the social media94 and 75% of consumers have purchased a product after seeing it on the social media95, social network companies are investing in new e-commerce solutions. At the global level, Facebook marketplace is accessible to users in over 50 countries. At the end of 2019, Google made it possible for e-commerce traders to post Shopping Ads on YouTube: these ads will be posted together with the videos, based on individual user interests or online purchasing history and will take the user directly to the applicable product detail webpage if they click on an ad96. Instagram continues to follow the “shopable content” trend and, following on from their “tag product” facility in posts, in 2019 they launched their Checkout function. In 2019 TikTok was testing a new function that enables users to include links to other websites right on their profile page97. WhatsApp has just recently offered companies that use the Business version of the app the possibility to create and share a product catalogue on the app itself. There are numerous platforms that are involved in promoting social commerce at various levels. Amongst the platforms that have obtained the most funding via equity crowdfunding in Italy is Sixth Continent, with 3.3 million Euro of funding and over 1,100 investors on Two Hundred. The social e-commerce platform enables users to purchase gift cards and earn points that can be used for new purchases with discounts of up to 50%98. Then there is also Blomming, the Italian start-up bought out by Storeden, which has raised one and a half million in funding. Blomming enables users to purchase items from thousands of stores via a single portal, to set up an e-commerce facility to sell products from their own site on Facebook and Instagram, and to sell products on the Blomming marketplace99. Yet another social commerce platform is Worldz, which has managed to raise over 800-thousand Euro of funding and that enables companies to turn their customers into micro-influencers and increase brand awareness. Customers who share posts mentioning the company are rewarded with discounts that vary depending on their respective popularity on the social networks100. Chart source: Casaleggio Associati, 2020. Source: 91: Digital 2020, We are social e Hootsuite, 2020; 92: GlobalWebIndex’s flagship report on the latest trends in social media, Globalwebindex, 2019; 93: Digital 2020, We are social e Hootsuite, 2020; 94: 140+ Social Media Statistics that Matter to Marketers in 2020, Hootsuite, 2020; 95: Three Competitive Pressures Driving Digital Commerce Strategy, Adobe, 2019; 96: Google spinge sull’e-commerce: il formato Shopping Ads arriva su YouTube, Engage, 2019; 97: Anche TikTok sperimenta l’e-commerce, Pambianconews, 2019; 98: Equity crowdfunding da record: migliori raccolte e piattaforme del 2019, Money.it, 2020; 99: Blomming: nasce la prima piattaforma italiana di social commerce, BitMAT, 2019; 100: Più sei social, meno paghi con la piattaforma Worldz, InnovaMI, 2020. 33 to say S 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed Social Media & ROI 2018 Social media activities have only had a marginal effect on sales. 25% Unsatisfactory 2019 21% We have not yet found a suitable way to assess what effect our social media marketing has had on sales. 51% Hard 2020 24% 49% 49% 27% 30% atisfactory 25% We have identified which social media activities actually increase sales. 34 Chart source: Casaleggio Associati, 2020. 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed Effectiveness of the social media for Italian e-commerce businesses Very effective Fairly effective Strategies aimed at increasing online sales via the social media HIGHLIGHTING PRODUCT FEATURES AND SERVICE 32% QUALITY 53% FACEBOOK 40% INVOLVING USERS IN ISSUES SUCH AS BRAND VALUE AND VIA REAL-TIME 29% MARKETING INSTAGRAM ENGAGING USERS BY MEANS OF INFLUENCER 18% MARKETING YOUTUBE LINKEDIN WHATSAPP PINTEREST TWITTER TIKTOK WECHAT SNAPCHAT OTHER 24% 21% 16% BANKING ON PRICING POLICIES AND DIVERSE 13% MONTHLY SPECIAL OFFERS 4% 3% RELYING ON SOCIAL COMMERCE PLATFORMS OTHER 0 Chart source: Casaleggio Associati, 2020. 10% 9% 9% 7% 7% 1% 35 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed CHAPTER EIGHT Stock management Organisational structure Organisational structure, particularly as regards logistics, payment and security, impacts on the e-shopper’s purchasing experience and therefore also on sales. The companies interviewed for the survey will be adopting different strategies to increase their respective online sales: 24% will be expanding their range of payment options and 19% will be offering free delivery or free returns. 12% will be focusing on expanding the range of click & collect options and 11% will be focusing on adopting more sustainable packaging and practices. 10% of the companies will be spending more on personalising deliveries and 9% of them will be spending more on security and data protection. 13% of the companies currently have no specific strategies in mind to increase online sales. HANDLED BY THE 52% COMPANY 15% OUTSOURCED I RELY ON 14% DROP-SHIPPING 10% 9% NOT APPLICABLE HANDLED BY THE MARKETPLACE 1% OTHER Opinion regarding current delivery service 50% 44% 6% CAN BE IMPROVED SATISFACTORY UNSATISFACTORY 36 Chart source: Casaleggio Associati, 2020. 5. Selling abroad 6. Selling on Marketplaces 7. Social Media 8. Organisational structure Companies interviewed Logistics Digital payments in e-commerce In Italy, B2C trade parcels make up around 20% of the entire goods shipping market, but this figure is forecast to keep rising over the next few years101. Standard deliveries are handled mainly by Amazon and the Italian Postal Service (together they deal with 86% of these deliveries), whereas express deliveries are handled mainly by these two players and the delivery courier company Bartolini (deal with a total of 64% of such deliveries). Time-definite deliveries are handled by a number of couriers and by Milkman, an Italian company that deals exclusively with this kind of delivery102. In response to the need for customisation of the lastmile delivery services, these days there are various other options on offer in addition to time-definite delivery. For example, Amazon, the Italian Postal Service and InPost provide automated lockers that enable users to collect their goods at any time103. Here in Italy there are even companies, such as the start-up company JoyJar, which offers to install such lockers on company premises or in apartment buildings. Yet another solution is where the major players within the goods delivery sector enter into partnerships with other parties, companies or private individuals in the interests of the sharing economy. For example, Carrefour is able to deliver a customer’s shopping within 30 minutes thanks to its collaboration with Glovo104. Instead, Supermercato24 and Pharmatruck deliver their respective shopping orders or pharmacy purchases within 1 hour, thanks to the use of “private shoppers”, in other words a delivery person that is not part of the traditional courier network. Globally, in 2019 the average annual spend per online user amounted to 799 Euro (4% up on the previous year)105. Worldwide, in 2019 e-wallet payment was the most widely used e-commerce payment method (41.8%), followed by credit card payment (24.2%), debit card payment (10.6%) and payment by means of money transfer (9%). At the moment, the payment by instalments option for online purchases only occurs in 1.6% of cases, but this figure is expected to rise to 2,8% by 2023, alongside the use of e-wallets, which are set to exceed 50% (in 2018 this figure was 36%)106. Even the immediate money transfer option, which was first enabled in 2019, will undoubtedly impact on digital payments. One of the factors that have had a major impact on the digital payment market in the past year is the advent of EU Directive Psd2, which actually came into effect in January 2018 but gives the players involved until 31 December 2020 to adjust, thanks to a deadline extension107. Most importantly, this Directive provides for Strong Customer Authentication (SCA) when authorising payments, a type of authentication that is based on two or more elements, including something that only the genuine user would know (such as a password or pin number), something in his/her possession (such as a device or token) and something “physical” (such as a fingerprint)108. Furthermore, it favours open banking: the Directive provides that banks must ensure safe, secure access to accounts and payments to all the market players, more specifically not only to other banks, but also to other parties such as service providers. Thanks to the Pds2 directive, but generally speaking also in response to the demand for increasingly fast, simple and above all secure payment, there is now an increasing trend towards utilising biometrics, which doesn’t stop at just digital fingerprints. In China they are already using face recognition techniques when checking out on Alipay, which has even introduced beauty filter, like the one used for selfies, which displays a photoshopped version of the user’s face on the device109. Another thing that is worth noting is the use of linked objects (Internet of Things) such as smart watches or speakers to make payments. In Italy, for example, it is already possible to pay bills or top up mobile phone credit on TIM via Google Assistant110. Looking beyond specific individual technologies, the general trend in the digital payment market is the development of increasingly flexible, omnichannel, lithe but secure payment procedures aimed at making the payment process almost seamless and the customer experience more positive. Source: 101: Analisi del mercato dei servizi di consegna dei pacchi, Agcom, 2019; 102: Analisi del mercato dei servizi di consegna dei pacchi, Agcom, 2019; 103: Analisi del mercato dei servizi di consegna dei pacchi, Agcom, 2019; 104: Carrefour offers 30-minute delivery, E-commerce news Europe, 2019; 105: Digital Commerce, Statista, 2019; 106: Global Payments Report, Worldpay, 2020; 107: Comunicato Stampa, Banca d’Italia, 2019; 108: Strong Customer Authentication (SCA): cos’è, come funziona, obblighi per ecommerce e negozianti online, Pagamenti Digitali, 2019; 109: Non ti piaci quando paghi con il riconoscimento facciale? Alipay mette il filtro bellezza, Wired, 2019; 110: TIM, Google Assistant consente il pagamento di ricariche e fatture, Tom’s Hardware, 2019. 37 5. Selling abroad 6. Selling on Marketplaces 7. Social Media Payment methods utilised 8. Organisational structure Companies interviewed 28% CREDIT CARD Digital payments in e-commerce in Italy The Italian e-commerce companies state that, once again this year, the most widely used payment option is by credit card (28%), followed by digital wallet (23%) and money transfers (19%). Lower down the list are COD payment (17%), payment via mobile (9%) and others at 6%. Certain payment methods originally devised for physical store purchases are now also going online, such as Satispay, which can now also be used as a payment method on e-commerce websites and is already accepted by, for example, NaturaSì, Superga, Cafènoir and many others. The “Other” payment method category in the survey includes, inter alia, payment by instalments. This option appears to be on the rise, partly thanks Amazon, which allows customers to pay for their purchases in 5 instalments without having to apply for a loan, in other words the amount owed is simply split up into a number of payments. Many other e-commerce websites are beginning to offer their customers the option of payment by instalments, such as Scalapay, which allows users to pay for their purchases in three instalments, or Soisy that enables purchases to be financed by means of personal individual loans to be subsequently paid back in instalments. Even the banks themselves are now allowing their clients to repay their credit card debt in instalments. As regards service providers that handle the processing of payments, to date there 43 such providers in Italy. The most widely used of these is PayPal with a 67% market share, followed by Stripe with 21.50%. In 2019 Stripe became the largest unicorn in the USA, worth some 35 billion Dollars111. Amazon Pay and Braintree hold a market share of around 2% each while further down the list, with even smaller market shares, we see Adyen, GiroPay, Apple Pay and Paymill. Other B2C solutions that also offer instalment payment options include Klarna and Affirm, which hold a market share of 0.26% and 0.09% respectively112. DIGITAL WALLET 23% (PAYPAL, AMAZON PAY, APPLE PAY, GOOGLE PAY, ETC.) 19% TRANSFER PAYMENT ON 17% DELIVERY 7% MOBILE / SMS (SATISPAY...) 6% OTHER Source: 111: Stripe scalza Amazon e WeWork e diventa l’Unicorno più grande degli Usa, Forbes, 2019; 112: Payment Processing, Datanyze, 2020. Chart source: Casaleggio Associati, 2020. 38 5. Selling abroad 6. Selling on Marketplaces 7. Social Media Companies interviewed 8. Organisational structure Companies interviewed We thank all the Companies that actively participated in the realization of this study, in particular those listed below: Alibaba, Amazon, Benasciutti Casa, Carrefour Italia, Dalle Piane Cashmere, eFarma, FDreams, Feedaty, ManoMano, Moschino, Mister Worker, Rarezze, Storeden, Supermercato24, Walliance, Worldz, Yocabè, Zalando. Other Companies to thank: Aeffe, Allforfood, Aosom, Ausilium, Barò Cosmetics, BitQ, Bricobravo, Bricoman, Borsalino, Busforfun, Canon Italia, Coin, Conrad Electronic, Eataly, Eden Viaggi, Europ Assistance, Fendi, Fluentify, Freddy, Gianvito Rossi, GS, Gruppo Buffetti, Gruppo Feltrinelli, Gruppo Uvet, Harmont&Blaine, Henkel, JustEat, Kaleido, La Passione Cycling Couture, Lavazza, Legami, Liabel, Lidl, L’Occitane en Provence, L’Oréal, Lufthansa, Luxottica, Manetti & Roberts, Maserati, Maxi Sport, Miroglio, Nashi Argan, Nestlé, NH Hotel Group, Nintendo, Norauto Italia, O bag, Pengo, Peroni, Pirelli, Prenatal, Profumerie Sabbioni, Saldi Privati, Samsung, Seven, Sixthcontinent, Sony, Stroili Gioielli, Supermercato24, QVC Italia, Tabulu, Thun, Tulero, Velasca, Valextra, Ventis, Woolrich. 39 Digital Thinking Digital Patch React at speed Quick solutions to digitize your company Learn more: casaleggio.it/digital-patch 40 Full-Funnel Marketing Solutions at Every Stage of the Consumer Journey Get Noticed Get Traffic Get Sales Generate brand awareness and interest in your products. AWA R E N E S S Get people to start considering your products or services. C O N S I D E R AT I O N Encourage interested people to make a purchase. CONVERSION We are experts in full-funnel marketing, working with 20,200 advertisers, including 1000+ brands across a range of businesses. Retail Travel Classifieds Auto We do this by analyzing and mobilizing data from 2 billion Criteo IDs consisting of shoppers who transact across web, app and store channels on more than 10 billion products. To learn more, contact marketingIT@criteo.com casaleggio.it Partner: Sponsor: Casaleggio Associati Digital Thinking Via Uberto Visconti di Modrone, 30, 20122 Milan Contacts: T: +39 02 89 01 14 66 E: info@casaleggio.it
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