Mobile-optimized sites, effective delivery and varied payment choices are three crucial ingredients of German eCommerce. We examine how to break down your barriers to success so that you can make the most of Germany’s online opportunities.
November 9, 1989. Mauerfall – the fall of the Berlin Wall. It ended a decades-long division between East and West and heralded the end of the Cold War. Few dates have so dramatically altered the shape of global geo-politics.
28 years later, the scars of history are slowly healing in German society. This is particularly evident online, where, according to Deutsche Card Services, there is now virtually no difference in purchasing power between East and West.
Indeed, German eCommerce as a whole is growing quickly, driven by a desire for low prices and convenience. It’s predicted that by 2018, 49 million Germans will buy products online, bringing in $82 billion of revenue (source: PFS Web).
But for many companies making their way online in Germany, it can feel as though there is a new, digital wall separating them from success. With its complex delivery and payment systems, the market can seem impenetrable.
But people used to say that about the Berlin Wall, too.
We believe that no wall is unscalable. And by following our tips to success below, you’ll be able to overcome the obstacles to online German success in no time.
1. BE MOBILE READY
mCommerce has long been less lucrative in Germany than elsewhere – only 60% of German mobile users this year will make a purchase using their phone, compared to 80.4% and 76.4% in the US and UK respectively (source: eMarketer).
However, mCommerce is growing rapidly; it represents 15% of Germany’s online sales and has experienced 26% growth from last year (source: Ecommerce News). This means that any online strategy should optimize content for mobiles or risk seriously losing out.
But it’s not enough just to localize content into German; the content format itself needs to be adapted. Mobile data plans are expensive in Germany, which means customers have become very choosy about what they spend their data on. Avoid sharing too many videos, photos or other media content, as these will likely be ignored.
Instead, focus on providing easy access to product descriptions, customer reviews, returns information and pricing details. 26% of German customers compare prices using their phone, so make sure that any special offers or prices are clearly identified early on. It may even be worthwhile to offer a price comparison between your product and your competitors’ to encourage customers to stay on your site and buy your product.
Search engines remain the primary means of research for consumers, so it’s important to have an SEO-ready site optimized for mobile. Having said that, 71% of consumers would choose to buy a product through online marketplaces rather than directly through a retailer’s website (source: PFS Web), while the three largest online stores – Amazon, Otto and Zalando – make as much revenue as the 97 next biggest stores put together (source: Ecommerce News). This means that any successful online strategy should establish a presence on these sites.
2. DELIVER THE GOODS
Delivery is a big deal in Germany. 83% of German eCommerce shoppers said they would buy from one retailer over another offering the same product because they liked the delivery experience (source: Lengow). You may have the perfect website, but if you haven’t sorted out your delivery logistics, you’ll be dead in the water.
Therefore, it’s important to offer a variety of delivery options. Over half of German online shoppers believe standard delivery should be free, but 25% also want fast delivery. Click and collect services and pre-booked delivery times are also growing in popularity. For every delivery option, nearly all shoppers believe that it should be possible for them to track their order, and almost half believe they should be able to choose a delivery date.
Germany has the highest returns rate in Europe. Depending on the sector, return rates can exceed 40-50%. This attitude has been fostered by German businesses with well-developed infrastructures to give them a competitive edge. Zalando, for example, offers 100 day free returns, which customers now expect from other vendors – 72% of online shoppers will shop more with a retailer if they offer a no-fuss returns policy (source: Comscore).
This pressure extends to overseas companies. A major reason Germans avoid buying products from abroad is because they believe returning goods will be difficult or costly. Therefore, if you’re working from abroad, you need to have a setup, which not only allows you to offer cheap, fast delivery methods, but also provides the same level of service for returns.
It’s possible to manage your customers so that they return goods less frequently. Prioritizing faster deliveries over click and collect services, for example, will reduce the probability of a product being returned, as customers have less opportunity to change their mind.
Furthermore, automate your CRM to deliver regular email delivery updates. These should also highlight points of contact and set expectations for the process and speed of delivery. We also recommend having a link to your company terms and conditions in the static header or footer of the email.
3. OFFER PAYMENT FLEXIBILITY
52% of Germans would abandon their shopping basket if their preferred payment method was not available (source: Optimizely). Because of Germans’ historic reluctance to share their private details online, they are less likely to use credit cards to pay for goods on the internet, so you’ll need to provide alternatives.
Invoice is the number one payment method in Germany because it gives customers the freedom to try something on or test it out (much like you’d be able to do in a shop) before committing to paying for it. This also makes it easier for customers to pay in installments – you just need to pay the minimum amount on the invoice and then the rest in installments.
Other options are also available, such as PayPal or other online wallets, while alternative payment methods like Paydirekt are growing in popularity because of the added security they provide. Cross-border commerce has been slowed by fears about the security of personal data. So if you’re operating across the border, it’s important that you can offer payment methods that Germans trust, or else they’ll just find an equivalent, cheaper and more convenient product on the domestic market.
Loyalty schemes have never gained much traction in Germany. Instead, to generate brand loyalty, you’ll need to be transparent, flexible and effective: give shoppers all the information they need at the onset; offer them the flexibility to choose which options work for them; and then provide a high-quality, cheap and hassle-free customer experience.
Much like stand-up comedy, German eCommerce is all about delivery.