Multi-channel experience: how far have German retailers come?
With a multi-channel strategy becoming increasingly important for German retailers, businesses need marketing professionals that can integrate physical and digital campaigns to reach core groups of consumers.
Purchasing online is booming in Germany. According to research from Schickler, e-commerce as a whole has been steadily increasing – expanding by 10% last year to reach a total turnover of €105 billion.
The Masterindex from MasterCard looked at the e-commerce market in Europe and revealed that 30% of Germans shop online at least once a week, behind only Ireland (32%) and the United Kingdom (41%).
In addition, even with a plethora of payment options available to them, a study by EHI concluded that 30% of German shoppers still prefer payment on account – the payment method with the highest revenue in Germany.
What has become increasingly clear is that businesses need to pay close attention to the channels they use to reach their customers. The German high street is a diverse environment, with discount chains dominant. E-commerce has been relatively slow to become commonplace in Germany but is now gaining pace.
For example, Media-Saturn, owned by Metro Group, only launched its e-commerce-enabled site in 2012. The collapse of the ProMarkt electronics chain occurred in part because of its slow move into e-commerce. However, online pure-play brands such as Home24 and Zalando are illustrating the importance of online commerce to the rest of the German retail industry.
A clear trend of mobile shopping is also emerging across Germany. Research from eMarketer suggests that 60% of consumers with smartphones are expected to use it for at least one purchase this year – up 15% on 2016, but still some way behind the UK at 76% and the USA at 80%.
Clearly, businesses need marketing professionals who understand the omni-channel and can leverage the lucrative opportunities available.
Across the globe
In other regions, e-commerce and the development of omni-channel retailing has had mixed success. In the UAE, for example, e-commerce is valued at $15 billion, but some notable business failures and a less-than-efficient delivery system (due to complex addressing issues) have dampened the development of e-commerce.
In Australia, shoppers are also increasingly digitising how they interact with brands and retailers. Initially, digital pure-play business had taken general control of the online shopping environment. Today retailers using the omni-channel approach are becoming the norm.
Mecca Maxima, for instance, has created a unique in-store experience that links to the wider digital retail space and social media habits of their customers – featuring ‘Selfie Studios’, high-resolution displays and how-to touchscreens. This example is useful, as other businesses should ensure their marketing teams understand the continued value of offline communication – and how the digital space can enhance that relationship.
M-commerce looks set to eclipse the massive success of e-commerce. In France, 20% of all online purchases are made using a smartphone. Retailers in France are, unsurprisingly, making mobile a priority. The omni-channel is vital in the country with research by Criteo indicating that almost half of French shoppers use more than two devices to connect with a retailer before making their purchase. The line between physical and digital marketing has disappeared – multi-channel marketing is an absolute priority for all businesses.
One company that is illustrating how to develop a multi-channel strategy is The Otto Group. With a presence in over 30 countries, its focus in Germany has been to build an omni-channel approach to retailing to reach every potential customer.
Recently it began using AI on its website to better match customer searches to their needs. Marc Opelt, OTTO Management Board, Sales and Spokesman, said: “Nobody wants to buy a washing machine and read about 1,700 reviews. User feedback is an important source of information for other customers and a key factor in the buying process. It is therefore all the more important for customers to access the information they need easily.”
The company understands that m-commerce is a vital channel to integrate into its services. Its customers want to interact with its brands and make purchases using a variety of channels, which still includes physical stores. According to Ipsos, half of Germans use in-app coupons when shopping in physical stores. Marketers need to understand this dynamic when integrating push notification marketing messages to highly defined groups of consumers.
Many businesses across Germany are moving to a multi-channel approach as the demands from customers change. German consumers are embracing e-commerce and now m-commerce in increasing numbers, but still feel frustration that the businesses they buy from are not as integrated as many in Europe and the US.
The German omni-channel will also embrace new technologies and over half (52%) of Germans are interested in making purchases using virtual reality. Diana Livadic, Manager at Ipsos Connect, sums it up: “The considerable interest in virtual reality presents a multitude of opportunities for retailers to offer their customers new shopping experiences. Despite this, only a fraction of those surveyed have yet had the opportunity to try out the new technology. Here it is up to the retail industry to take advantage of this great curiosity on the part of consumers and to gain from it.”
As new technologies such as VR become more commonplace, marketers will have to integrate these new channels into their messages. Omni-channel retailing is here, and with it omni-channel marketing. Messages need to transcend their traditional single channel, and speak to consumers across environments – both physical and digital – to offer a seamless transition as customers move from touchpoint-to-touchpoint.
Julia Munder, Marketing Manager at online luxury leather goods retailer Maxwell Scott, advises: “From our experience and data, we can see that German customers research a lot on mobile and tablets but don't always feel confident in making the purchase on a mobile device.
“We see lots of people coming back via desktop devices to finish the shopping process and buy. This certainly has to do with the careful and hesitant nature of German shoppers – it's all about trust and confidence in the process and company.”
The future belongs to businesses that understand the different touchpoints its customers are using. From traditional in-store purchases to purchasing behaviour driven by m-commerce, all German businesses need to move their marketing activity to encompass multiple channels – reflecting the fact that their customers have a presence across the physical and digital retail landscapes.
The commercial winners today and in the future will be businesses that understand online and offline marketing to be not different activities, but rather other facets of their relationship with customers, will be. It is critical to all businesses within the German retail space that they recruit effectively to ensure they have marketers with the skills to understand today’s retail space – and how to craft engaging multi-channel marketing messages.