An Analysis of the German Market
17 October 2019
Author: Jasmine Waters
As the anticipation of post-Brexit life build, many British brands are still looking to expand on an international, European scale. A popular choice of place to achieve this goal for many continues to be Germany, with its retail sector continuing to maintain many similarities to that of the UK. With its consumers remaining sophisticated, innovative and extremely demanding, how can brands looking to succeed in the German market most effectively do so?
Why expand to Germany?
At the Anton Dell Fashion, Gift & Homeware Consultancy, we know how competitive the German market can be. We often advise our brands to consider alternative market options as guaranteed market success is often realistically difficult to fulfil. Bearing this in mind, Germany is currently the UK’s second biggest trading partner, behind the USA. The market itself is growing quickly, with retail revenue expected to be up by 8% year on year by 2019, and will grow 6.8% annually. Competitive tax regulations and a highly qualified workforce have ensured that the German consumer base has remained extremely affluent, albeit ones that lean towards familiarity and ‘trustworthy’ sources.
What else should brands consider?
If we take a look at their consumer behaviour, we can see they often opt for high-quality products, and search for these through ‘multi-brand’ retail platforms. Many of these home-grown digital locations have proved to be a great starting point for international brands, being able to gain consumer trust and loyalty through the familiarity of the site itself. The same can be said for emulating browsing and ordering model shoppers that consumers are already familiar with, also being a successful method to follow. Much like the UK, there is a blurring of lines between online and physical retailing and a rapidly growing, sophisticated e-commerce network. This combined with the demanding consumer base themselves means many need a curated retail space for variety in their preference of online shopping experiences. Established brands have cited that some consumers find the breadth and depth of this approach attractive, whilst some who might not know exactly what they are after can find a huge source of inspiration.
Another aspect for brands to consider is what payment methods to make available. Many German consumers are fans of the “buy now, pay later” strategy, alongside e-wallets. There tends to be a more concerned approach towards giving out personal information, specifically to third party websites and unknown websites to the consumer.
Any international brand must address the domestic points of familiarity and trust in order to gain any form of success. Although we would recommend brands to keep alternative European market options in mind, Germany does remain to be a relatively stable market, despite the uncertainty of Brexit. The sophistication of both their market and their consumer base means expectations may be high, but both domestic and foreign brands that are rooted there are optimistic for further growth.
Image source: https://www.dickieslife.com/uk_en/seek-berlin-2018