German ecommerce: Money in the bank and retail on the mind
By Georges Berzgal, VP & Managing Director, Global Ecommerce, EMEA, Pitney Bowes
Are you a British retailer looking to expand into the German ecommerce market? Here is our expert advice to maximise the chances of success.
As Europe’s economic powerhouse, Germany is a highly affluent country with a successful online retail marketplace. It boasts the sixth largest ecommerce market in the world, ranking third in Europe behind the U.K. and France. The internet usage penetration rate in Germany is very high at 62.9 million people, representing 89% of the population. Ecommerce sales in the country are due to rise by nearly $7 billion (approximately £5.29 billion) year-on-year by the end of 2017, to exceed $65 billion (approximately £49.12 billion). Around 49.5 million Germans are expected to make at least one digital purchase in 2017, representing 81.5% of internet users and 68.6% of the population. Retail ecommerce sales growth are forecasted to once again outpace total retail sales this year, growing by 2.3%. With the added convenience and discounts available with online shopping, this trend is only going one way.
With 29 million active social media users, social platforms are a great way of targeting different demographics in Germany with relevant retail products. Germans use Facebook much more than any other social media channel, with 38% of the total population choosing this platform over Google+ (9%), and only 7% on Instagram and Twitter respectively. Retailers should be mindful of the value of social media for paid advertising, as this is a great way to reach certain demographics with product offerings that they will be more likely to engage with.
In terms of preferred payment methods, Pitney Bowes’ 2017 ecommerce research shows that for cross border online shopping, Germans shoppers are the biggest users of eWallets out of all 12 countries surveyed. In order of preference, they use credit card 26%, eWallet 61%, debit card 10% and mobile payment 2%. While many German consumers do pay by credit card, retailers should not fit their payment models entirely around this. Some consumers prefer to avoid entering credit agreements, and so it’s important to have a selection of options on your website to ensure consumers can pay in their preferred method. Home delivery is the most popular delivery method for German consumers, chosen by 87% of the population. However, ‘click & collect’ and delivery to pick-up points are becoming increasingly popular alternatives.
German consumers can be known for returning their online purchases more than others, if they deem them to be unsatisfactory, or in certain cases where they order multiple sizes of the same item to keep the best fit. They have the highest returns rate in Europe – half of the total 46% of Europeans who returned items last year were from Germany. Online retailers in the region should therefore have a cost-effective returns policy in place, otherwise consumers will likely be put off by being unable to potentially return or exchange their items if needed. German consumers keenly pay attention to online reviews, especially relating to shipping services, so failure to provide on these measures will likely affect traders negatively.
Furthermore, 83% of online shoppers would opt for one retailer over another offering the same product, if they provided a positive delivery experience, while 55% believe that standard delivery (3-5 days) should be complementary from retailers. To achieve this, retailers need to have a logistics partner that can facilitate cost-effective deliveries and returns so that they aren’t losing out on frequent and expensive shipping procedures.
When going cross-border for online goods, the U.K. ranks as one of the most popular vendor countries for German shoppers. German consumers often look to the U.K. for “better product availability”, big discounts and products received in better condition, even though shipped from abroad. A potential deterrent is that, domestically, German’s are well catered for with retail goods. However, the demand for uniquely British goods that simply cannot be purchased domestically in Germany remains high. Their very ‘Britishness’ is part of the allure and will keep customers flocking online to buy them.
Pitney Bowes offers products and services that allow British retailers to make international trading as simple and cost-effective as if selling domestically. Britain finds itself in the fortunate position of producing high quality, often premium retail products that consumers around the world want to get their hands on. We remove the boundaries for British companies so that their customers in Germany, Europe or anywhere in the world, get the products they love quickly and affordably, and can even return them if needs be.
Learn about Complete™ Cross-Border from Pitney Bowes, the scalable end-to-end global ecommerce solution that can handle all facets of enterprise retail cross-border expansion.
Read more about the global ecommerce landscape from both the retailer and consumer perspective by downloading the Pitney Bowes Global Ecommerce Report, the first report to comprehensively analyse these two perspectives.