Forrester Forecasts Significant Growth for European E-Commerce, Projecting Sales to Surpass €565 Billion by 2029
Forrester Research has released a new forecast, revealing that e-commerce sales across the five major European economies—France, Germany, Italy, Spain, and the UK—are poised for substantial growth over the next five years. From €389 billion in 2024, the total value of online sales across these nations is expected to increase to €565 billion by 2029, marking a compound annual growth rate (CAGR) of 7.8%. By 2029, nearly 21% of all retail sales in these markets will be made online, up from 16% in 2024. This surge is driven by several key factors, including a stronger overall economy, growing adoption of omnichannel retail strategies, greater price transparency, and the continued expansion of cross-border online marketplaces.
Retail Landscape Shift: E-Commerce Gaining Market Share
The forecast, detailed in Forrester’s Europe-5 Online Retail Forecast, 2024 To 2029, paints a clear picture of the shifting dynamics of European retail. While the growth of e-commerce is expected to accelerate, traditional offline retail is predicted to experience a significant slowdown in its expansion. In the years immediately following the pandemic, consumers exhibited a marked preference for in-store shopping, driving higher growth for offline retail. However, by 2029, offline retail sales are forecasted to grow at a CAGR of just 1.7%, a sharp decline from 8.9% in 2022 and 4.1% in 2023.
The shift toward online retail is a reflection of evolving consumer habits and the increasing importance of digital channels in everyday shopping experiences. According to Forrester, these trends are likely to continue to reshape the retail sector, presenting opportunities for businesses to meet rising demand through more streamlined and flexible online offerings.
Total Retail Sales in Europe-5: A Breakdown
Germany is set to lead the Europe-5 in total retail sales, with the country’s retail market forecasted to reach €693 billion by 2029. The UK follows closely, with total retail sales projected to reach £552 billion (€649 billion) by the same year. France will also see significant retail sales growth, with a projected total of €616 billion by 2029.
These figures indicate that while Germany, the UK, and France will dominate overall retail sales in the region, the composition of those sales will increasingly lean towards online channels, particularly as consumers seek more convenient, cost-effective, and personalized shopping experiences.
E-Commerce Sales: The Growth Surge
The report highlights the dramatic rise in e-commerce sales across the five European markets. The UK is expected to remain the leader in online retail sales, with projections showing that e-commerce sales in the UK will reach £176 billion (€207 billion) by 2029, up from £130 billion (€152 billion) in 2024. Similarly, Germany’s online retail market is forecasted to grow to €146 billion by 2029, a significant increase from €97 billion in 2024. France will also experience robust growth, with online sales reaching €106 billion by 2029, up from €73 billion in 2024.
The trend toward increased online shopping is expected to continue across all five markets. By 2029, e-commerce will account for a significant portion of total retail sales across Europe-5. The UK is projected to lead this charge, with online sales making up 32% of total retail sales by 2029, up from 27% in 2024. Germany will see a notable rise in e-commerce penetration, with online sales projected to account for 21% of total retail sales by 2029, compared to just 16% in 2024. France is also expected to see growth in this area, with online sales accounting for 17% of retail sales by 2029, up from 14% in 2024.
Key E-Commerce Trends Driving Growth
Several factors are contributing to the rapid growth of e-commerce across the Europe-5 region. Non-essential retail categories, such as fashion and consumer electronics, are anticipated to experience a resurgence in online sales, especially as inflationary pressures begin to ease and the broader economic environment improves. Price-conscious consumers are expected to regain some of their purchasing power, further fueling demand for online shopping in these categories.
Another important factor driving e-commerce growth is the increasing popularity of cross-border e-commerce platforms. Companies like AliExpress, SHEIN, and Temu are expanding their reach in European markets, helping to further digitize the retail space and creating new opportunities for shoppers to purchase products from international sellers. The rise of these global online marketplaces is particularly significant, as it positions the Europe-5 region as a major hub for international e-commerce activity.
In addition to cross-border platforms, the growing shift toward omnichannel retail strategies is also playing a critical role in the evolution of online shopping. Retailers are increasingly integrating their online and offline channels, offering customers a seamless shopping experience that combines the convenience of online browsing with the immediacy of in-store pick-up and returns. This approach is expected to become increasingly important as consumer expectations for convenience and personalized service continue to rise.
The Role of Digital Platforms in Shaping the Future of Retail
Forrester’s principal forecast analyst, Jitender Miglani, emphasizes the importance of digital platforms in the future of European retail. “The growth of online sales is reshaping the retail landscape, giving businesses opportunities to expand their customer base by offering more convenience and delivering tailored shopping experiences,” said Miglani. “European retailers should consider investing in advanced digital platforms to adopt omnichannel strategies to meet growing demand online. Getting customer experience right in both online and offline realms will dictate market dominance in the next decade.”
As competition intensifies in the e-commerce space, companies will need to invest in innovative technologies that allow them to meet the evolving demands of today’s digital-first consumers. Those that can provide an exceptional customer experience, whether online or in-store, will be better positioned to thrive in the rapidly changing retail environment.
A Promising Future for E-Commerce in Europe
The European e-commerce landscape is set for substantial growth, driven by key trends such as the increasing adoption of omnichannel strategies, the rise of cross-border platforms, and the growing demand for convenience and personalized shopping experiences. With online sales expected to surpass €565 billion by 2029, businesses that prioritize digital transformation and customer experience will be well-positioned to succeed in the increasingly competitive online retail space.
For European retailers, the next five years represent a critical opportunity to adapt to the evolving demands of consumers and capture a larger share of the growing e-commerce market. By investing in advanced digital platforms and delivering seamless shopping experiences, businesses can stay ahead of the curve and remain competitive in the fast-moving world of online retail.
To learn more about Forrester’s Europe-5 Online Retail Forecast, 2024 To 2029, visit Forrester’s official website. For detailed insights into the forecast, you can access the full report (client access required).
