European eCommerce can be complex, especially for online retailers in North America venturing into Europe for the first time. Things such as currencies and language, which are essentially universal in North America, can vary greatly even throughout leading European countries.
Among the countries leading the economic and eCommerce charge in Europe is Germany. Here are 5 things to know about eCommerce in Germany and the impact they have on the digital retail industry in Europe…
1) Germany trails only the UK in online sales in Europe: According to eMarketer, Germany currently accounts for approximately 18% of all online sales in Europe, ahead of France (14%) and trailing only the United Kingdom (31%). While Germany is projected to keep its place as the second most influential country for online sales in Europe in the coming years, it has been projected to only account for 16% of sales by 2017 (down 2%). This decrease is due to online retail is becoming more prevalent in Southern Europe, in particular Spain and Italy.
2) Germany had the fifth most online sales of any country in the world last year: With $50 billion (€37 billion) in online sales last year, Germany trailed only the United States, China, Japan, and the United Kingdom in online sales worldwide. Forecasts for online sales in Germany also look strong, with sales projected to increase to $70 billion (€52 billion) by 2017. That’s a 40% increase in projected online sales – more than Japan (13%), Australia (30%), and South Korea (31%).
3) Germany has a larger digital buyer population than many leading eCommerce nations: China may lead the world in online retail sales, but one thing the country struggles with is capitalizing on its large population – only 19% of the country makes purchases via digital channels. Germany, with a population of over 80 million people, has the highest percentage of its people (61%) engaging in digital transactions of any country with a population greater than 75 million people (slightly more than the United States at 60%). This means digital messaging in Germany is reaching the majority of the population, an important metric for the future of digital advertising in the country.
4) Germany isn’t as big on social media as other countries – Despite having a population with a high level of tech sophistication, only 56% of German internet users engage in social networks, much lower than the 67% who engage in the United States and United Kingdom. With only 37% of German internet users on Facebook, localized social networks such as StudiVZ and Wer-kennt-wen are still preferred by some German internet users. The scattered landscape of German social media can sometimes force brands to rethink how social media fits into their digital retail strategy when they go online in Germany.
5) E-mail marketing professionals and preparation are important in Germany – For many North American retailers looking to launch online retail sites in Europe, e-mail marketing initiatives are often a key driver of consistent online sales for their existing domestic business. In Germany, especially compared to the United States and Canada, the ability of online retailers to reach the inbox of German consumers can be an issue as approximately one in five e-mails is blocked or flagged as spam. It can be important for online retailers making their debut in Germany to understand how e-mail marketing works, specifically to avoid making critical mistakes that can take months to rectify, either by forming an interactive marketing partnership and/or hiring key staff members.
In conclusion, eCommerce in Germany is somewhat unique compared to other leading countries in the online retail space. While Germany is one of the top eCommerce countries from a revenue perspective and has a large percentage of their population engaging in digital commerce, its population does not spend as much time online per day as other leading eCommerce countries. The “task-driven” nature of Germans online can be beneficial for retailers who take the time to establish a strong presence in the country, but may not be ideal for online retailers who rely more on “spur of the moment” purchases to meet online revenue goals.