How to plan all important key factors from the beginning and how their operative implementation works.
This article is based on a presentation I had the pleasure to give for the Economic Development Agency of Estonia in November 2020. It is intended in particular for medium-sized companies from EU countries that want to do direct-to-consumer online business in Germany.
German Characteristics and their Impact on Online Business
For medium-sized or smaller companies it is quite possible to do international online business with reasonable effort. Especially within the EU. Therefore I will list some characteristics of the German mentality that you should definitely pay attention to. I will show you what solutions there are for this in the following.
1. Germans Have low Affinity for New Technologies
Lets have a look at the Inclusive Internet Index 2020, which is reported by the The Economist Group. You can see that Germany is less advanced in terms of Internet use and digitization compared to other high developed countries of the EU.
But: Germany is Top in Logistics
On the other hand logisitics is well developed, as Germany is number one in the Logistics Performance Index, wich is published every year by the World Bank.
2. For German consumers, Security is very Important
This maybe relates to the point above but has some more impact. For example, Germany has a very strict interpretation of the GDPR rules. As far as the topic of e-commerce is concerned, try to create trust! For example certificates and trust badges in your online store are important. At least more than in other countries.
Online Stores and Certificates
According to a survey conducted by the Splendid Research GmbH, 51% of the asked online buyers fully and 34% partially agreed to the following statement: “An onlineshop with certificate is safer than one without“.(2020)
Credit cards are not not very popular as a payment method of German online shoppers. Germans are reluctant to use credit cards when buying online. See the use of payment methods in Germany (2020):
Creating trust with reviews: 36% of participants rely most on online customer reviews when buying a product. (survey 2019).
Germans trust German Onlinestores
Trust in German online stores is significantly higher than in international online stores.
If not from Germany then at least from the EU
As a recent study by the German E-Commerce and Distance Selling Trade Association (Bundesverband E-Commerce und Versandhandel Deutschland e.V. / bevh) shows, 56.5 percent of the surveyed online shoppers prefer to buy from online stores run by providers based in the EU (survey together with the opinion research company Civey, 12/2020).
3. Germans love to Return Goods
Although the right of revocation is regulated uniformly in the EU, Germans cause more returns than online buyers from most other countries. Please notice that this behavior is very different depending on the product category. The absulute number of returned packages is estimated around 280 Million in 2020.
4. Germans Expect German Language
Last but not least, German Consumers expect German language at all contact points. This is a bit simplified, but unlike to other countries, we are not used to for example watch synchronized movies. It’s just that we trust you more if all communication is in German.
Furthermore, it is not necessarily a legal requirement to display article descriptions and legal terms in German. At least the German courts are increasingly of the opinion that legal texts like terms and conditions, cancellation policy, imprint etc. must be offered in German if stores sell to German customers.
Depending on which online sales channels you use, you should consider the specifics of the German online market. A key element here is to create trust. Offer your online presence in German. Make sure that the entire customer journey and all customer contact points are in German.
- Always take the customers perspective! (behavior, language, peculiarities)
- Create trust!
- Offer your products in German (and your communication too)
- Have a transparent communication (through all channels)
- Respect the GDPR!
In my next blog post, I will show you how to implement the special requirements within the different sales channels.
If you have any questions regarding the online market entry in Germany, please do not hesitate to contact me.