By Beata Roos | Principal Consultant

With the ecommerce market continuing to boom, our international trading team offer their insights into how to make a success of trading in Germany.

For any brand looking to grow their ecommerce presence in Europe, Germany is often top of the list. As the biggest EU market with 9% annual ecommerce growth, the prospect of trading in Germany is very appealing to brands operating online. Still, some of the nuances of German shopping behaviour may come as a surprise. Lack of local expertise leads to many brands struggling to crack the market and sustainable long-term growth is a challenge. 

Trading in Germany - German population vs online shoppers chart.jpeg

Based on our experience of trading in Germany we have uncovered key insights for brands looking to enter the German ecommerce market and trade effectively: 

1. What makes German customers convert?

German shoppers expect reassurance and demand free returns. 

Brands need to consider ways in which they can instil trust not only in their products but also in their online customer proposition.

2.    When do Germans shop?

In addition to the usual key trading dates there are specific occasions which drive further sales.

  • One example is ‘Nicholas Tag’ (St. Nicolas day) in December when children traditionally receive small gifts.
  • Summer holiday dates in Germany differ by state which makes it even more important to engage in brand messaging throughout the whole Summer season. 
  • Winter sales which traditionally happened in late January have slowly shifted to mid-December responding to customer demand.

3.    How to find the target customer in Germany?

Understanding the demographics and shopping behaviour in the market is essential to trading success. For example, more than half of all female shoppers buy clothing online, whereas the majority of men purchase consumer electronics via online stores. Similarly, average basket size for the same product category can vary as much as 30-40% between different German states. 

Evaluating where the brand’s potential customers reside and using geo-targeting can make digital marketing spend more efficient and effective. 

Trading in Germany - Products bought mostly online graph.jpeg

4.    Alternative routes to market 

More than half of online purchases in Germany happen on marketplaces. Amazon, with a local turnover of €8.8bn, is the largest followed by Otto with its reported turnover of €2.9bn in 2017.

Trading in Germany - Top 10 online stores in Germany graph.jpeg

Not only is Otto a successful online marketplace, but it also has hundreds of kiosks across the country and offers customers the convenience of paying in monthly instalments. OTTO kiosks provide customers with a face-to-face experience with a trained associate. They serve as information centres as well as pick-up and delivery points for orders, affording an extra level of customer service that German consumers demand. Brands with products that would benefit from face-to-face customer service or alternative payment methods could consider Otto as a route to market.

Zalando is the biggest fashion-focused marketplace in Germany. Its approach to working with brands is different as it shares customer purchasing data and helps brands with marketing strategy development, online content, logistics and inventory management. Zalando has enabled smaller businesses to use the marketplace as an avenue to showcase their brand to a larger audience and gain new customers. Brands that previously felt threatened by marketplaces have welcomed this path.

If your business is currently trading in Europe and are disappointed with ecommerce sales, or if you need help planning a German market entry strategy, please get in touch with our team of local European trading experts. Contact us at hello@practicology.com.
 

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