By Janina Sidhu | Consultant

With online revenue growing rapidly year-on-year, and to coincide with Oktoberfest celebrations, consultant Janina Sidhu sets out the key issues for retailers and brands entering the German ecommerce market.

In 2018, ecommerce revenue is expected to rise to US$69.05million (an 8% increase on 2017), ranking second only to the UK as the biggest online shopping marketing in Europe. With this opportunity in mind, it is essential that retailers and brands consider the cultural nuances and shopping behaviours that are unique to the German market.

German ecommerce market

Define your market entry strategy

German customers purchase online more frequently than any other shoppers in Europe. They buy based on trust, quality and most importantly price, with 43% of customers making a purchase due to price rather than any affinity to a brand. Because of this, marketplaces like Amazon and Otto.de are thriving and represent a logical first step towards market entry for brands. 

In fashion terms, Zalando.de is the leading marketplace with an 18.3% growth in revenue in 2018 across the local DACH region. Launching first on Zalando would represent an opportunity for overseas brands to gauge the appeal of their products with the fashion-conscious German consumer.

The typical German millennial consumer is both aware of and more heavily influenced by international trends and has helped inspire the growing demand for cross-border trade. Because of this, many retailers may choose to prioritise and accelerate the development of fully localised direct-to-consumer sites.

Understanding fulfilment expectations

As these cross-border transactions increase, German customers have become savvy to the risks involved and carefully assess delivery time, delivery cost and the returns process before completing an order. And, as Germany has the highest returns rate in Europe, retailers and brands entering the market must mitigate for the logistical cost implications.

Consumers have high standards when it comes to fulfilment, expecting free returns and free delivery. This is simply not commercially viable for many overseas retailers and we have seen businesses instead operate a €3.99 flat-rate standard delivery with a timeframe of 2-3 business days.

The ‘try before you buy’ payment process is commonplace, and a large number of customers still opt to pay by invoice or bank transfer on receipt of goods. You can read more about this payment method in our blog.

Translation and transcreation

Making sure your website is translated for the German market is essential and not doing so correctly will frustrate the customer and complicate their journey. We recommend that retailers and brands bring in the expertise of a native German speaker to ‘transcreate’ the website and marketing collateral correctly, ensuring the language and tone are appropriate.

In German, many words are comprised of a conjunction of two or three words and marketing copywriters often use a hyphen to separate the longer words across two lines. Native German speakers will understand where the hyphen can be placed, but many non-native creatives will incorrectly split the word without recognising the grammatical error caused, compromising the message being delivered.

At Practicology, our outsourced ‘Ecommerce as a service’ team consists of ecommerce experts who are also European native speakers. We work with our clients as a key part of their team, taking charge of international performance and allowing them to focus on their core domestic market. If you’d like to find out more about the service we offer to retailers and brands, please contact us today.
 

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