What we can learn from Germany’s approach to ecommerce innovation
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What we can learn from Germany’s approach to ecommerce innovation

By Jessica Paige 26 Jul 2021

Cross-platform marketing company Iterable director of marketing, EMEA Elle Nadal tells Retail Insight Network how the onset of the pandemic matured new digital expectations in Germany, and why brands that adapted to ecommerce thrived during lock-down.

What we can learn from Germany’s approach to ecommerce innovation
German shoppers clearly expect retailers to bridge the gap between in-store and online experiences, which requires a focus on optimising cross-channel. © Malin Annika Miechowski/RUHR24; Collage: RUHR24

The pandemic has heavily impacted German retailers, as it has other merchants across Europe. Despite this, the German retail industry has enjoyed resounding success in ecommerce amid nation-wide lock downs and slowing luxury demand.

Retailers that have thrived were able to deliver exceptional omnichannel experiences that met German customers’ needs for convenience and flexibility while tapping into a rise in ecommerce, particularly in mobile and social shopping.

The country went into its second lockdown in the middle of December, at the height of gift-buying season.

With brick-and-mortar retailers dubbed “non-essential” closed, digital channels were essential for brand survival and success, and 49% of Germans bought gifts online in Christmas 2020, accelerating the already growing popularity of ecommerce before the pandemic.

Cross-platform marketing company Iterable director of marketing, EMEA Elle Nadal tells Retail Insight Network how the onset of the pandemic matured new digital expectations in Germany, and why brands that adapted to ecommerce thrived during lock-down.

Tapping into mobile and social

One only has to look at the phenomenal rise of Vinted, the used fashion app, to realise how important mobile commerce is to German shoppers.

The app – known as KleiderKreisel in Germany – achieved more than double the downloads of two of its most prominent competitors, Amazon and eBay, in 2020.

As a whole, Germans typically turn to mobile channels for small, recurring purchases and when buying gifts.

Research from Statista found that, during the Christmas season 2020, nearly two-thirds (64%) of purchases were made via either a mobile or tablet device – above the European average of 61%.

The rise in prominence of mobile has been accompanied by a parallel surge in social commerce. In fact, nearly a quarter of German 18 to 34-year-olds made purchases on social media in 2020.

This segment will only grow as social commerce becomes more mainstream and the purchasing power of younger consumers increase, and innovative retailers are taking this opportunity to build social communities around their products.

Omnichannel and fulfilment

German customers are famously focused on efficiency and efficacy when shopping; they want to make the right purchase in the way that is most convenient.

To cater to the preferences of this demographic, retailers should focus on building personalised services around shopper requirements, so that shoppers can be served seamlessly whether they are in-store or online.

While online and mobile shopping are major trends in Germany, attitudes to ecommerce are much more nuanced, varying across regions. Only three of Germany’s 16 ‘Länder’ – Bavaria, North Rhine-Westphalia and Baden-Württemberg – account for more than half of all online shoppers.

These prosperous regions attract young people from all over Germany and beyond, skewing habits towards ecommerce to an extent not always matched by regions which are more sparsely populated or have an older demographic.

Nearly two in three (65%) German shoppers research major purchases on the internet, whether they are made in-store or online. Additionally, one in two German customers are guided by online reviews in their purchase-making decisions.

Interestingly, when browsing online customers are rarely won over by price alone. The top reason that German consumers shop online is direct delivery (66%), followed closely by being able to place an order at any time of the day (62%).

Convenience clearly outranks price for German shoppers.

Convenience

Convenience can, of course, mean different things to different customers, depending on how they like to shop.

For the German market, it unequivocally means a seamless omnichannel experience. Four in ten shoppers prioritise purchases by whether the retailer allows online orders to be exchanged or returned in-store and a third look for in-store collection of goods ordered online.

Similarly, nearly one in five (19%) prioritises the ability to return in-store purchases through the post.

While disparities certainly exist between shopping preferences, the key for German retailers is to develop a memorable experience catered to all shoppers, whatever their predilection.

This is not limited to ordering, fulfilment and returns. Home cooking service KptnCook, for example, bridges the gap by offering recipe suggestions online with a personalised shopping list that combines ingredients from a variety of meals so they can be bought online or in-store in one basket.

German shoppers clearly expect retailers to bridge the gap between in-store and online experiences, which requires a focus on optimising cross-channel.

Privacy and data

Ecommerce success in Germany relies on compliance with highly advanced sets of data regulations, coupled with a mature understanding of how this informs customer behaviour.

Germany was one of the first countries in the EU to bring in the General Data Protection Regulation (GDPR) in 2018, introducing a host of new obligations on retailers when handling customer data.

Since then, we have seen that customers are very willing to report retailers they see as breaching their rights. In one case in 2019, leading German property firm Deutsche Wohnen was fined €14.5m for storing tenant data unnecessarily.

In fact, the German grocery chain, Rewe, has gone as far as introducing an AI manifesto that lets customers know when they are dealing with a chatbot, rather than a person.

It also makes software engineers take responsibility for ensuring the technology they are building is inclusive and purged of unconscious bias.

Action points

Retailers in Germany looking to prosper in 2021 and beyond will need to tap into the new reality of shopper behaviour after an unprecedented period of heightened ecommerce activity.

Flexible payments options are a must-have, as is a seamless personalised omnichannel experience. German customers expect to have full control over how a product is researched, ordered, delivered and then paid for or returned.

Barriers between understanding their needs and delivering an exceptional service across digital channels and in-store locations will be unsustainable.

These omnichannel experiences will empower retailers in Germany to tap into the ongoing surge in ecommerce and win new customers and drive-up conversions, particularly through mobile and social commerce – shaping up to be new areas of growth.

Retailers who innovate in these new areas while always putting shoppers in the driving seat will thrive.

Offering personalisation and full flexibility to ensure consumers get the right product on their terms is the way to unlock future growth in German retail.