There’s no doubt e-commerce has bloomed over the past decade. In fact, revenue generated by online shopping is expected to reach €509.9 billion in Europe this year, according to Ecommerce news.
While the UK and United States still top the online commerce leaderboard, there’s another market which is increasingly staking its claim as a leader in online spend - Germany. According to the same source, by 2020 e-commerce in Germany is tipped to be worth some €73.3 billion.
To find out what’s been behind this surge, and what developments we can expect to see in 2017, PerformanceIN caught up with Martin Rieß, country manager for the DACH region at zanox - Europe’s largest performance marketing network.
Martin, could you explain what has led to e-commerce growing so rapidly in Germany?
Martin Rieß: Germany is the strongest and most solid economy in Europe. Germans used to be sceptical about e-commerce compared to other countries such as the UK, which resulted in slower growth for e-commerce revenue.
Now doubts about security issues, such as data privacy, are gone and e-commerce in Germany is unstoppable. This was clearly shown by our Black Friday performance where we saw a year-on-year sales revenue growth of 16% in comparison to 2015.
Germany now has steady growth, over 80 million inhabitants and a high internet penetration, so I think that we will continue to see strong growth in the future.
How does e-commerce adoption look compared to other countries?
MR: Compared to other countries, Germany still has great potential for growth, but there’s no doubt it is starting from a lower level than some of the more mature e-commerce markets of Northwestern Europe.
If you compare the revenues per inhabitant in the UK, for example, you can see that there is still significant room for development – and we will catch up with online marketing growth predicted to be as much as 50% higher than that of the UK.
The strength of e-commerce in Britain is remarkable, but as companies expand beyond their natural borders (German e-commerce giant Zalando* is a good case in point), they will increasingly understand the variances across the continent, build their knowledge and help drive innovation and adoption in the local market.
Do you agree customer orientation is key to success in e-commerce?
MR: Customer orientation is absolutely key to success in e-commerce – it will be the goal to further improve this in the future. Amazon leads in this aspect and that is also the reason why it is the most dominant player in the German market. Shorter shipping time - the company now offers delivery within an hour – are the additional factors contributing to their success.
E-commerce needs to ensure that it focuses more on a 1:1 communication with the customer and satisfies individual needs.
And finally, what other predictions for the future of e-commerce can you share with us?
MR: There are still some elements of e-commerce that need time to catch up with the latest developments. For a long time, people didn’t believe that one could sell furniture over the internet – same goes for financial services. Now these spaces have made their way into e-commerce, where we see 118 transactions per hour on our network for financial services, and I think that other industries that used to only sell products and services in their brick-and-mortar shops will follow.
Consumers are increasingly content to shop on mobile devices; in fact, more than 40% of German consumers have done so, and therefore piecing together the interactions and understanding the single customer view has never been more important.
Also recognising the role that different devices play at the varying stages in the path to purchase will be critical for optimising marketing efforts. Online businesses are becoming more and more complex with new devices and new publisher verticals.
To perfectly track the customer journey you need the right expertise and technology – that’s what we are here for. We’re looking forward to the new developments and challenges in German e-commerce.
*German online fashion platform Zalando was launched in Germany in 2008 and has since expanded to operate in 15 European markets.