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Online retail country focus: Germany

Exploiting the opportunities eCommerce presents in Germany requires an understanding of the wants and needs of the shopper. Using the findings of Planet Retail's shopper research for Germany, the roles that mobile, social media, in-store technology, payment and fulfilment play in the shopper journey and the influence each has on purchasing decisions are revealed.

The obligatory growth rate bit

It would be remiss of me not to detail the size of the prize. Planet Retail expects Germany's eCommerce market will reach €73.4 billion by 2019, a growth rate of 84% from today, far outstripping the 8% growth in store-based sales over the period. Online currently accounts for 7.8% of retail sales, but by 2019 this will have reached 14.8%.

Catering for the always-on shopper

Planet Retail found that while 58% of German shoppers connect to the internet via their mobiles, only 39% use this access for shopping. This is relatively small compared to the UK, where 62% do so. Looking at online spend in Germany, 76% is via a computer, with just 9.7% of transactions via mobiles - though this is up from 5.8% in 2012.

Though German shoppers have yet to fully embrace mCommerce, the demands of the constantly-connected consumer need to be catered for. Providing an adaptive website to ensure an optimised experience regardless of device is only part of the equation. With consumers seemingly unwilling to transact via mobile, the priority should be catering to their desired smartphone usage when shopping.

With Planet Retail finding that 49% of German shoppers want to use their mobiles to quickly and easily compare prices, retailers need to focus on price transparency, building solutions to facilitate this. With our research also revealing 38% of shoppers keen to gather loyalty points or bank savings on their mobiles as they shop, and 32% wanting to receive real-time offers while out shopping, the mobile channel becomes not just about delivering the best deals, but a perfect way for German retailers to nurture and reward loyalty. The mobile phone is becoming the ultimate shopping companion in Germany and retailers need to accommodate and respond to this.

Technology to enhance the in-store experience

Retailers in Germany might do well to consider focusing on solutions centred on technology their customers already own, rather than flooding outlets with new touch points. While 12% of those surveyed in Germany had used an in-store kiosk to view the retailer's website for more information, just 9% had placed an order through one. This compares to 26% that had logged on to in-store Wi-Fi on their mobile. It surely makes sense for retailers to direct tech spend to those areas their shoppers are minded to use, rather than gimmicky innovations with which customers may or may not engage.

Whatever solution is chosen, it must not simply be for technology’s sake, but should enhance the experience. Otto Group’s Sportscheck format is a good example. By installing internet terminals and equipping staff with iPads to improve service levels, they’re perfectly positioned to increase in-store conversion rates, linking the physical to the digital in a suitably seamless manner.

Getting the influencers to influence

With 54% of consumers in Germany using social media on a daily basis, and 46% saying they take information on social media into account when making purchasing decisions, leveraging social networks to influence these decisions and to encourage brand advocates should be another must-do. This comes with a caveat, though. While 68% said they were more influenced by peer reviews and recommendations than by social media, 23% stated that social networks were good sources for obtaining such opinions. So those retailers in Germany that encourage and reward consumer-generated content are likely to achieve greater success in monetising social media.

Facilitating alternative payment

How consumers in Germany pay for online purchases is a key point of difference, with use of invoicing very popular. Of those buying online, 66% say they’ve used bank transfer to pay for their purchase. A mere 9% pay by debit cards, compared to 58% doing so in the UK.

Payment options are very influential when it comes to choosing a retailer in Germany, with 48% agreeing that being offered alternative payment methods, such as cash on delivery, would influence retailer choice. One payment solution stirring things up is Yapital, backed by Germany's Otto Group. While initially only accepted by Otto-owned stores like Baur, the likes of German supermarket chain Rewe and online marketplace Rakuten now use the system.

Getting purchases to shoppers as quickly and cheaply as possible

At present 87% of respondents have used home delivery in Germany, while 17% have used a collection locker, 13% a collection point and only 5% have used click & collect. Fulfilment is the single most influential factor in German retailer choice, with 42% saying that being offered more flexible delivery times and options would influence them in choosing a retailer.

It is not just receiving items, however – 46% said choice of retailer was influenced by the ability to return unwanted items to their nearest outlets. Providing choice, while shortening the distance and time between product and consumer, should be an imperative when it comes to fulfilment.

Concluding thoughts

To delight German shoppers the focus should be on ensuring seamless digital-physical links; catering to the constantly-connected consumer through mobile solutions, innovative in-store technology; providing flexibility, choice, speed and value for money on fulfilment, and leveraging social media to deliver more personalised shopping experiences.

Malcolm Pinkerton is research director for eCommerce at Planet Retail. He will focusing on the online retail situation in different countries, in his regular Essential Retail column over the coming months.

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