Swiss online retail is booming

Digital commerce Swiss online retail is booming

Published on 27.01.2021 by Andreas Wüthrich, Head of Digital Commerce Consulting, Post CH Ltd

There hasn’t been a year that has shaken up the industry to the extent that 2020 did. Store closures, lockdowns, and changing consumer behaviour have had an impact on high-street retail, whereas for online retailers in Switzerland, revenue has been through the roof.

Every year, Credit Suisse publishes its “Retail Outlook” study. The best way to describe the course of business in the Swiss retail sector is a “roller coaster ride”. The authors came to the conclusion that the footfall in the city centers during the spring lockdown dropped by between 60 to 80 per cent.

The increased number of people working from home could also result in a long-term decline of between five and 30 percent.

This created ongoing demand for creative solutions. Retailers needed to work out contactless collection options as soon as possible, or to try to consult with customers by video. Businesses that already had a strong online presence were well-equipped to do this, and their importance is not likely to wane, because online retail has exceeded all expectations in Switzerland.

Three-figure growth at Farmy

Farmy.ch, the online shop, had its most successful year yet. Farmy almost tripled its revenue in 2020 with its offer of regional food products, taking in 26 million francs compared to 9.5 million the year before. The company was able to directly benefit from increased demand in Switzerland. The volumes they processed clearly showed this – at the Zurich facility, it tripled, and in Lausanne it quadrupled.

Of course, the lockdown wasn’t the only challenge for consumers. Many were also worried about contracting the coronavirus the next time they went to the supermarket. In order to meet this increased demand, Farmy significantly increased its workforce from 133 to 220 employees.

Coop’s two-figure online growth

In the pandemic year of 2020, Coop achieved revenue of 30.2 billion francs. That is slightly less than the previous year (-0.2 percent) when adjusted for currency, despite the food services having to close and the wholesale segment suffering from low demand. Online retail was essential to gain this result, because online retail revenue grew a massive 35.2 percent. Coop.ch, the online supermarket, saw impressive growth of 42.6 percent.

Online sales explode at Migros

Migros also did well during the very challenging year that was 2020. The company managed to grow four percent, with revenue of 29.8 billion francs. Online retail was the biggest driver for this, too.

Across all areas of the Migros Group, online revenue grew by 31 percent to almost 3 billion francs. Digitec Galaxus also had an astonishing result with growth of over 50 percent to 1.7 billion francs, and Migros Online supermarket (formerly LeShop) wasn’t far behind with 40 percent.

What about Zalando?

The fashion platform’s figures are surprising. Credit Suisse concluded that the clothing retailer didn’t benefit from the online boom, instead it experienced a fall in revenue of 17 percent. The business itself does not release official numbers, so they have to be indirectly interpolated.

Thomas Lang, an expert in the field, disagreed with this result on Twitter, believing that the fashion retailer experienced 15 to 20 percent growth, so these figures are still up for discussion.

Regardless of how high growth was across all branches of online retail, 2020 showed a clear shift towards digital retail. This means that retail businesses need to have an online presence to ensure future viability, and a new service from Swiss Post offers a particularly easy way to do it.

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Andreas Wüthrich, Head of Digital Commerce Consulting, Post CH Ltd

Andreas Wüthrich has been Head of Digital Commerce Consulting at Swiss Post’s Digital Commerce Competence Center since August 2018. For the previous 14 years, he was in charge of strategic development of digital projects, implementation and organizational structure at Dosenbach-Ochsner AG.

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