These two markets seem to be the most challenging worldwide. Therefore, if you have been successful in the States and in Britain, you are likely to have a proficient team with an almost perfect product. Then, market expansion is the next step to boost sales. With the blossom of e-commerce, it’s also getting way easier to target consumers on the other side of the globe.
In our Market Insights series, we will examine and analyze some potential markets for retail businesses, especially Shopify merchants in the US/UK, to expand to. Today, we keep the focus on online shopping in Germany - the�No.3�country for e-commerce revenue in Europe - and German consumer behaviors. We will also present the pros and cons of expansion into Germany and suggest some next steps. Let's jump right in!
To see if Germany is a potential market for your business, you need to look at the market size and the future scenario.
Prior to the COVID-19 outbreak, Germany was in the�5th�position for e-commerce in the world with a total revenue of�€72.6 billion. The hit of the global pandemic with “stay-at-home" orders has pushed online shopping in Germany even further. In 2020, e-commerce in Germany was worth�€83.3 billion, surpassing the average growth rate of�11.3%�in the past 3 years by 3%. The significant YOY increase is predicted to be prolonged and amplified to more than�€141 billion�in 2024. �Those impressive statistics in recent years make Germany a strong and major player in the European eCommerce industry alongside the UK and France. E-commerce growth in Germany has more potential than in France with the backup of a sufficient logistics system, which will be discussed later.
Although German consumers prefer brick-and-mortar stores to online marketplaces, online shopping gradually becomes their habit as a result of COVID-19. Nearly�80%�of internet users purchase things online and up to�30%�of them do it on a weekly basis.
Although vaccination programs are on the right track, and Germany and Europe are preparing for a new normal post-pandemic, shopping habits established during the lockdown will not be washed away. The digital stickiness of German consumers is prominent. Research by McKinsey shows that up to�91%�of respondents continue to purchase online post-COVID-19.
With such promising numbers in e-commerce sales and online shopping customers, Germany should be on the priority list to consider for market expansion.
Remarkable e-commerce trends help you understand the orientation of the market, so you can decide if it aligns with your business goals.
There is nothing new about the domination of smartphones and tablets in global online shopping. Likewise, mobile sales in Germany are growing more quickly than overall digital sales. Mobile apps and mobile payments were the�top categories�for German retailers' investment in 2019. They also brought the highest ROI of 12% and 13% respectively. As�86%�of German citizens stated they are most likely to shop online from the couch, mobile commerce will continue to contribute a significant part to the overall e-commerce revenue.
Although many customers are against online advertising, it seems to be effective to the German.�One-third�of e-shoppers here have purchased directly through an advertising post at least once while�26.7%�have at least made a click on it.
Key opinion leaders (KOL) and micro-influencers are also popular in Germany. Around�20%�of online consumers here buy the advertised product directly from an influencer's product post that they visit. Another�20%, despite not making the instant purchase, later buy the featured item either online or offline.
Global consumers are more and more aware of the anthropogenic climate change caused by their consumption. That's why a minimal lifestyle that encourages “reduce, reuse, and recycle” is trending. German consumers are not excluded from that trend. More about online shopping in Germany.�
To improve your site performance as well as to not waste shoppers’ time with your e-store, using filters is the most basic way to provide this on any site. In today’s article, we will talk about faceted search - a method that creates a user-friendly interface for any product discovery. �
Faceted search or facet navigation provides customers a smart and logical interface so they can understand what is available. In other words, this structure helps consumers refine search results to get their desired products easily by selecting the facet options. �However, people sometimes interchange the two terms ‘faceted search’ and ‘filters’. Similarly, both of them analyze a large set of content and help exclude any items that do not match the criteria. The important difference here is that faceted search provides multiple filters at the same time, and each filter represents one aspect of the content.�
Filters are a good starting point to get around your store, but facets will enable shoppers to get closer to their preferred choices. Let's see how faceted navigation improves your website.
A study indicated that�27%�of shopping session failures are results of not being able to find the right products on the site, which means business owners lose one-third of potential sales. Take a look at the key advantages that this method could help your site with.�
With faceted search, customers do not have to scroll through catalog pages and look at never-ending product lists just to find a desirable one. Hence, your site navigation becomes considerably more convenient.�
Related:�6 Ways to Build Best Web Navigation and Site Search 2021
Faceted navigation offers shoppers a chance to play with filters smartly. It uses the metadata of your products - for example, product type, SKU, title, and tags, so customers can easily find what they need with a few clicks. Let's say you would love to buy some men's shoes. You stumble upon ShopSM and type in the keyword ‘shoes’ in the search box. Over 2,600 results for shoes show up - which is overwhelming. Luckily, you spot that you can drill down your results with the various facets on the left. Instead of browsing through thousands of shoes, you now easily find out your favorite ones based on vendors, colors, and prices.� �
The goal of faceted navigation is to improve the shopping experience by allowing shoppers to locate their preferred products within milliseconds. Consumers can know exactly where they end up with their selected filter options. Therefore, e-merchants can maximize the chances of conversions and speed up customers' buying decisions. Here are 4 key tactics for you to make the most of faceted search.�
Most facets are placed as filters, and some of them are more widely used than others. According to�Baymard, the top 5 essential filter types that should be available on most eCommerce stores are:
80%�of online customers try to filter product lists by price. They usually have an idea of a suitable budget for their purchases. Whether customers apply a Price filter first or after tailoring the product list with other filters, most will only want to consider affordable items. �
Many shoppers are brand conscious, and they tend to seek out well-known names when drowning in products that they have never experienced, especially in the cosmetics and apparel industry. For single-brand sites, on the other hand, a brand filter might be irrelevant. In this case, you should consider adding a sub-brand filter that allows shoppers to filter by product types or any distinctive product features. �
In a recent study,�45%�of participants said that users' reviews and ratings are one of the primary reasons for online shopping. Surprisingly,�53%�of online stores do not let customers filter product lists by ratings.�
In fact, many consumers do not feel comfortable making assessments by themselves, so they rely on ratings as a surrogate for excellent quality or value for money. As a result, when they are unsure which products are appropriate, they want to use other customers’ ratings to filter out bad products. �
Size is an important attribute for many industries as customers can quickly exclude unsuitable items to focus on variants that match their demands. For some product types, size filters might be replaced by filters for different dimensions, such as width and height. These filters would be especially common where the products have to fit into a specific space, such as kitchen appliances. �
Needless to say, color seems to be the most popular product variation. Countless customers, of course, have strong preferences for certain colors, and would never consider goods in other shades.�
Without a color filter, getting a product in the colors that a customer is interested in purchasing would be impossible, and the lists would be cluttered with items in unwanted shades. �
Allowing customers to select several filter option values at once is a smart idea as they can save tons of time re-loading the browser and website. For instance, someone might be searching for clothing in various colors but only want to see items in a specific size. This functionality helps online shoppers generate a tailored catalog based on their unique criteria. Therefore, they can browse the most relevant clothes available and choose from a few final options (rather than thousands), which significantly improves the consumer experience. �
Did you know that�46%�of eCommerce stores do not offer thematic filters?
These are filters that bring together a variety of products that would be unrelated. ‘Seasonal specials’, "best value," and "casual style" are just a few examples of filters that might contain products from all categories with a variety of unique qualities. For more useful tips, check out our article about faceted search.�
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