GREATEST E-COMMERCE CUSTOMER
POTENTIAL WITHIN EUROPE
With more than 51 million (94 percent of internet users
aged 14+) digital consumers in 2014, Germany enjoys
the greatest e-commerce customer potential within
Europe – making it the clear continental leader. Beyond Europe, only China, Japan and the USA record
higher digital consumer numbers. The A.T. Kearney’s
Global Retail E-Commerce Index 2015 identified Germany as Europe’s second largest online market, behind the UK – but with almost triple the UK’s current
growth potential. European online retail sales will
reach EUR 234 billion by 2018; with a compound annual growth rate (CAGR) of 12 percent for the period
2013 to 2018. Just under half of all online retail sales
across the EU-7 will be from online purchases made
using a smartphone or tablet by 2018.
SIGNIFICANT MARKET VOLUME INCREASE
Together, German B2C multichannel online and mail
order business generated total turnover of more than
EUR 49 billion in 2014. Accounting for more than EUR 41
billion of this sum, e-commerce generated more than
85 percent of total industry turnover. Germany’s e-commerce sector represented nine percent of the nation’s
total retail industry (EUR 457 billion) in 2014 with the tendency positive. The German E-Commerce and Distance
Selling Trade Association (bevh) has forecast that the
e-commerce volume will grow by 12 percent in 2015 to
reach revenue of almost EUR 47 billion. According to the
Association of the German Internet Industry (eco), more
than half (53 percent) of German GDP generated in 2017
will be e-commerce related (compared to 37 percent in
2012). These numbers highlight the significant potential
within the German B2C e-commerce market.
GERMAN ONLINE RETAILERS GOING INTERNATIONAL
Amazon is the leading online retailer in terms of number of online shoppers and e-commerce turnover in
Germany. All-rounders – such as Otto, Tchibo and Conrad Electronics – have dominated the top 10 online shop
rankings in Germany for years. However, companies
that focus on one specific product category – such as
Zalando, Cyberport, H&M, and Notebooksbilliger.de –
are gaining more revenue and taking their places.
Many German online retailers are already engaged in
international business. Of the surveyed members of
the bevh, almost 90 percent conduct online business
beyond national borders. Twenty-eight German e-commerce companies are represented in the list of the Top
100 European E-Commerce Companies in 2014. Nearly
half of those companies who do not currently generate
business abroad are working on their international expansion.
The overall trend set to dominate industry development
in the next year can be best described as a move towards personalization: the defining of a unique, emotional, yet flexible shopping experience. With the continuing development of technical solutions allowing for
ever more interactive shopping models, e-commerce
seems predestined to fulfill such expectations. Personalized marketing and customized approaches based on
individual consumer requirements will gain in importance. E-retailers will make more and more use of the
substantial consumer information streams available to
them (“Big Data”) to form set digital identities for their
respective target groups.
TARGETING DIFFERENT SHOPPING BEHAVIORS:
“Female Commerce” or “She-Commerce” refers to
the lucrative women’s market for e-commerce products and services. With the relative buying power of
women higher than ever before, e-commerce companies who focus on individual female demands, shopping behaviors and decision-making processes will
be more successful than those retailers who adopt a
“one-approach-fits-all” solution. Subjective factors including anecdotal experience and emotional responses
to products are as much an important source of information for women as hard product facts. Social media
platforms (including YouTube, blogs, Instagram, and
Twitter) therefore have a significant impact on female
purchasing decisions. The more specific, individualized
information an online retailer can provide to its female
target group, e.g. through brand ambassadors, the
higher the purchase likelihood.
SERVICE APPS – TIME SAVING AND CONVENIENCE
GoButler, Shopwings, Hello Fresh, Delivery Hero,
John’s Bell, ZipJet, Helpling, James,bitte – these are
all successful start-ups mirroring a trend that can best
be described as time-saving and convenience services.
Time is a very valuable commodity. Those start-ups
offering day-to-day services, e.g. cleaning, pick-up and
deliveries, flight and travel bookings, restaurant reservations, event planning etc. have experienced huge demand and substantial growth in 2014. Other apps focus
on convenience in terms of the online shopping experience, e.g. price comparison, mobile shopping lists including notification of price changes per selected item,
FUTURE TREND OUTLOOK
Augmented reality, edutainment and serious games will
become more important. Virtual fitting of clothes and
accessories, virtual home furnishings visualizers, and
video glasses will become widely implemented by 2016.
Researchers forecast that the average workload per
person will have doubled by 2030, taking into account
the demographic changes in Germany which will see
one-in-three Germans being 65 years of age or older.
DIGITAL POINT-OF-SALE STRATEGIES
Consumers are increasingly demanding multichannel
transactions including browsing, buying, and returns as
well as pre- and post-sale services. They want to decide
where, when and how to shop. In order to be successful
in the retail industry, it becomes increasingly important to combine different sales and marketing channels
to optimize overall digital presence. Enabling seamless cross-touchpoint experiences, customer journey
mapping will be important to target the increasingly
multi-touchpoint shopping behavior of customers.
Many German retailers have not yet seen the need for this
and have failed to adapt their presences accordingly.
However, pure online players are increasingly turning
to stationary shopping solutions next to their online
presence. Rather than creating a competitive situation,
both channels are taking advantage of the other for mutual benefit.
“Click and Collect” is one way to combine the worlds of
offline and online shopping. Typically used for smaller
items in the past, this model has recently made the
leap into the home furnishings market (e.g. IKEA’s pre-
packed for in-store collection service for online orders).
Collective Click and Collect stations are becoming
more and more popular, e.g. shopping centers offering click and collect stations in their parking garages.
Customer service and convenience plays a major role:
fitting rooms, return service, free parking etc. These
models are still at a very early stage in Germany.