• by Will Ashton , October 24, 2024

The conditions of fall 2024 represent a historically favorable time for U.S. brands to finally conquer Europe’s ecommerce market. Yet, despite its size and affluence, many brands remain hesitant to venture into the continent, perhaps spooked by the experience of the likes of American Apparel, J.Crew, and Banana Republic. The reality is, Europe has proved a graveyard for many ambitions.

So why should brands think differently now?

The sheer scale of the opportunity is the first reason. The European ecommerce market contains over 326 million affluent consumers, more than the 273 million in the U.S., according to Statista (all stats following also from Statista).  Buoyed by an economic upturn across Europe, ecommerce revenue is set to reach $632.7 billion in 2024.

Northern Europe, known for its tech and fashion trends, now has the world's highest internet use per person. Moreover, the European market offers considerably lower advertising costs. This gap has widened as economic growth and inflation in the U.S. have outpaced Europe, making it an increasingly cost-effective option for businesses.

According to Nest data based on 40+ global ecommerce brands, in 2024, American CPM was 165% higher than European CPM, while Google CPC was 36% higher in the U.S. than in Europe. Additionally, traffic costs are far less volatile and less prone to sharp increases during competitive periods.

Of course cultural differences and language barriers pose challenges. A critical reason for U.S. dreams dying in Europe is a failure to develop a truly localized strategy. Research is therefore crucial to understand market demand and competitor strategies, and adjust pricing to reflect local purchasing power.

To succeed in Europe, U.S. brands must focus on long-term brand building alongside immediate sales. This full-funnel approach has often been overlooked, which is a big misstep. Businesses need to remember they are starting fresh in multiple countries and so should create awareness-building content to introduce their brands to new audiences.

Interestingly, European brands are far more developed with a full-funnel approach. This is down to the sheer size of the U.S. market, and the fact it takes brands a lot longer to exhaust bottom-of-the-funnel demand, before they reach diminishing returns.

Once the strategy is established, brands need to then focus on adapting brand messaging, creative assets, and website content to resonate with each target country's specific preferences and humor. Key to this is embracing experimentation and the rigorous testing to find what works best for each European market.

Another necessity: not trying to tackle the whole of Europe in one go. The smoothest, most effective entry point for European expansion and ad localization is the U.K. Along with sharing the English language and multiple cultural touchpoints, the U.K. is the continent’s largest, most advanced ecommerce market. By starting in the U.K., brands can most easily reappropriate existing content, rebrand websites, and localize some of their creative production like user-generated content.

With peak season looming and competition intensifying, U.S. brands looking to expand would be wise to look East. Europe, once a graveyard for ambitions, is now a golden opportunity for those with the right approach.