Is the German market right for your business?

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Author: Bianca Mercer, Senior Consultant, Practicology

 

Practicology’s Senior International Consultant Bianca Mercer talks about the specifics and peculiarities of trading in Germany.

The German market clearly has huge potential for any online business. As a digital economy, Germany is second only to the UK in Europe, with an online retail spend of £44.3bn in 2015.

 

Here is my list – as a German living in the UK – of some of these specifics and peculiarities you should know about before you decide if Germany is right for your business:

 

“We don’t speak much English!”

 

Of course Germans can speak English. Almost all of us can squeeze out a few comprehensible sentences should the need arise. However, we Germans are quite a shy bunch and would rather you make an ass out of yourself annihilating the German language than the other way around. Why is that you may ask? Honestly, most of us find it incredibly painful to risk imperfection. To make matters worse, we are surrounded on the north by Scandinavians who speak better English than most native speakers.

 

Although 64% of Germans are English speaking, first and preferred language will always be German. 18% of German customers would not buy from a foreign site due to language problems and 17% because they find it difficult to navigate foreign websites. Therefore, if you are serious about trading in Germany, think about translating – or even better transcreate – your online store and offer German-speaking customer services.

 

German Consumer excuses for not buying from foreign retailers

 

“Don’t know enough to feel comfortable to buy!”

 

We German shoppers crave stability. So if you want to win our trust and make us feel comfortable to shop online, make security your priority - especially if you are an unknown brand in the market. German domestic trust schemes and accompanying marks from TÜV or Trusted Shops hold a lot of sway with us.

 

Also, we are much more aware of our rights, understand the requirements for an online retailer, and expect to be able to find information easily. Irrespective of device, key information such as customer support, impression, T&Cs and FAQs should be easy to access.

 

Automated emails and delivery notes should also highlight points of contact and educate us on what can be expected with regard to delivery speed etc. We do actually like to read a website’s terms and conditions, so have a link in the static header or footer for easy access.

 

German retailer checkout

 

“We are not like you British, we don’t use credit cards!”

 

Only 25% of Germans use credit cards, compared to 78% in the UK and 77% of the population in France. Therefore, alternative payment methods account for two-thirds of all transactions as follows:

 

  • Sofort Überweisung
  • PayPal
  • Nachnahme
  • Vorkasse

 

For some historical reasons we loathe debt. Interestingly enough, anthropologists have long noted that the German word for debt—Schulden—comes from the word for guilt, Schuld.

 

Levels of consumer debt in Germany are remarkably low, and our aversion to debt is also part of the reason why the country has some of the lowest homeownership rates in the developed world.

 

So, if you want to sell to us Germans don’t just rely on credit cards.

 

“We like to use our living room as changing room!”

 

The leading reason that we Germans loathe debt is the fact that invoicing works in Germany. And because it works, we have learned (don’t forget: Germany has a strong history of catalogue shopping) to shop with the intention to return, turning our living rooms into changing rooms.

 

In combination with invoicing, return rates can reach 50% plus, making it hard for many foreign retailers to stay profitable specifically when dispatching from abroad. Think about an impact study before implementing invoicing.

 

“We like to spend more on cars than couture!”

 

When it comes to fashion, we Germans are conservative with the tendency for understatement and simplicity. Germany’s biggest clothing brands are positioned at the middle of the market, delivering practical basics and styles that serve the tastes of the country’s ageing population. In general terms, more subtle and less ‘fashion’ labels have a higher chance of success in the German market.

 

“A lot of us don’t hear the biological clock!”

 

Germany has one of the lowest birthrates in the European Union and the German culture is simply not well situated for child-bearing. Here are the reasons why:

  • We Germans postpone marriage until we are in our thirties and very often ignore the biological clock until it is too late
  • We Germans are a nation of renters. Only 41% of Germans own homes and home ownership is often delayed well past child-bearing years. While renting, we count our pennies and save until we can afford that eventual home purchase. Again, this does nothing to encourage couples to enter parenthood
  • We Germans are also a nation of perfectionists, and perfectionists live in a world of high uncertainty avoidance. This means that many of us choose to avoid the high level of uncertainty and downright chaos that arrives with children
  • Germany is also an upper-class, economically-oriented nation and the usual trend for such cultures is to naturally gravitate towards lower fertility rates

 

Therefore, don’t expect us all to be parents or homeowners and make sure that there is room for our professional titles in the address field. If I had a doctor title (and a lot of us have), I would like to see my title on the box when it hits my door mat.

 

To find out more about entering the German online market - download our free Germany Cross-Border Passport.

 

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